Haitong International released a research report stating that it covered Jinshan Software (03888) for the first time and gave it an “superior to the market” rating. The revenue is expected to be 10.192 billion, 12.271 billion and 14.829 billion yuan respectively from 2024 to 2026, with year-on-year growth rates of 19.4%, 20.4% and 20.8%; net profit to mother is 0.873 billion yuan, 1.645 billion yuan, and 2.335 billion yuan, respectively. 80.5%, 88.5% and 41.9%; earnings per share were $0.65, 1.23 and 1.75, respectively, with a target price of HK$46.85.

According to the report, Jinshan Software is a leading software and internet service company in China. After implementing the “mobile Internet transformation” strategy, the company formed a strategic platform based on interactive entertainment and office software, with cloud services and AI as the new direction. The company's core business is divided into two major divisions: office software and services, and online games. The corresponding holding subsidiaries are Jinshan Office, Nishisanju, and Jinshan World Tour. Jinshan Office maintains steady operation, adheres to the “multi-screen, cloud, content, collaboration and AI” strategy, focuses on R&D in the field of AI and collaboration, empowers individual and institutional customers with technological innovation, brings users a one-stop AI office experience, and promotes the implementation of new quality productivity in the office field. The online game business continues to iterate the classic Sword Man series and actively expand new categories.

Furthermore, the bank believes that Jinshan Software is deeply cooperating with Lei Jun companies and is expected to continue to unleash synergy effects in the future. On November 19 of last year, KOSC, a non-wholly-owned subsidiary of the company, signed an advertising service agreement with Xiaomi Singapore. KOSC will provide overseas advertising services for Xiaomi Singapore and its customers through an app. All advertising traffic of the KOSC overseas app will be provided to Xiaomi Singapore, and Xiaomi Singapore will pre-install the WPS Office Android app for free on its overseas mobile devices (including all series of phones and tablets). According to this, KOSC's advertising revenue in 2024 was 2.97 million US dollars, the minimum advertising revenue in 2025 was 4 million US dollars, and the recommended maximum annual revenue share revenue in 2025 is 8 million US dollars (if the total annual advertising revenue exceeds 1.0 million US dollars, KOSC share accounts for 40%).

The bank expects that as Jinshan Software's contribution to AI commercialization accelerates and benefits from the continued release of demand from Xinchuang, office business revenue will experience a faster growth rate. It is estimated that the revenue growth rates of the company's office business from 2024 to 2026 will be 12.09%, 20.28%, and 22.93%, respectively. In terms of gaming business, the company built the classic Sword Man series and continued to innovate and expand. “Sword Net 3” in June of last year

“Unbounded”'s performance exceeded expectations, and the game business achieved high revenue growth. In addition, the new games “Unrestricted” and “Swordsman Affair Zero” are expected to be launched this year, contributing to the continued growth of the game business.

The bank expects the revenue growth rate of the company's game business from 2024 to 2026 to be 28.02%, 20.59% and 18.8%, respectively. In terms of gross margin, the bank expects the company's comprehensive gross margin to remain stable, with gross margins of 82.44%, 82.85% and 83.31% respectively from 2024 to 2026.