investment points:

event: on the 2023 jinshan office technology open day, the company officially announced that WPS AI, an intelligent office assistant based on a large language model, has been connected to all products of jinshan office, inviting users to experience all-component AI functions. At the same time, for the first time to show the latest progress of Jinshan office self-research model, the model is based on the open source base, through training tuning, to help WPS AI become the first AI office application in China.

the use of large model reconstruction of office software, Microsoft 365 Copilot in the country the most direct benchmarking. The company is positioned as a large language model application, anchoring the three strategic directions of AIGC (content creation), Copilot (intelligent assistant) and Insight (knowledge insight). WPS AI, as a ChatGPT-like application of collaborative office track, has been connected to WPS text, presentation, form, PDF, Jinshan document and other product lines to solve users' daily office problems in content generation, content understanding, instruction operation, etc. According to Microsoft's official website, Microsoft 365 Copilot will be fully launched to enterprise customers on November 1. WPS AI, as its domestic benchmarking product, will directly benefit from subsequent price increases and user habit cultivation.

for the first time to demonstrate the progress of self-developed models and build an enterprise knowledge base based on WPS AI capabilities. In order to meet the needs of more user niche scenarios, the company on the basis of open source base, through training tuning self-research model. In terms of enterprise knowledge base, the traditional knowledge base has certain limitations, the company's goal is to help RAG (retrieval enhanced generation) technology, is expected to break through the enterprise digital asset false proposition, to help build enterprise digital asset closed loop.

release WPS 365 family bucket brand, public cloud SaaS business is progressing smoothly. The company has released WPS 365 for organization-level customers, providing content creation, office collaboration, open ecology and digital asset management capabilities, including WPS Office, document center, Jinshan collaboration, Jinshan conference, mail, calendar and other general office applications. Through collaboration and intercommunication among multiple applications, the company can fully meet the needs of enterprises in digital transformation and create an efficient and integrated collaborative office platform for customers. According to the company's semi-annual report, in the first half of the year, the number of SaaS paying enterprises in the public cloud sector increased 54% year-on-year, the renewal rate of paying enterprises exceeded 70%, and the amount renewal rate exceeded 100, driving the related revenue in the public cloud sector to increase 100 year-on-year.

maintain a "buy" rating. Maintain the 2023-2025 home-to-home net profit forecast of 15.79/22.95/3.286 billion yuan, corresponding to PE of 110/75/53 times, respectively. As the domestic digital office leader, while enjoying the AIGC change dividend, with the continuous optimization of AI functions, the company is expected to achieve C- side, B- side subscription business revenue acceleration through price increases, maintain a buy rating.

Risk Warning: The application effect of AIGC products is not as expected; The challenges of industry giants and new entrants; The pace of the subsequent release of the trust business may fluctuate. The company announced on July 19 that the company and its subsidiaries were involved in litigation, please pay attention to investors.