Investment Points

Event: On November 11, the company's official public number released the "WPS double 11 Value Purchase" activity. Users can receive a free time for purchasing members, or exchange points for member time. After becoming a member, they can directly experience the intelligent office function of WPS AI.

members have priority in experiencing AI functions. WPS AI promotion and further users can directly receive the benefits of WPS AI experience after purchasing members. the WPS AI experience content launched this time includes: experiencing text AIGC, table writing formula, one-click PPT generation on the Windows side, or experiencing intelligent document AIGC, intelligent table writing formula and AI template through Jinshan document.

the WPS AI experience is directly open to members this time. Its significance lies in: 1) improving the user payment rate and guiding ordinary users to convert to super member and super member Pro. 2) Expand the testing scope of WPS AI and accelerate product iteration. Previously, users tested WPS AI by applying. Users had to wait in line. Now the test scope is extended to members to attract more users to participate in the test. 3) Cultivate user habits and prepare for the subsequent formal price increase of WPSAI.

Buy the time length of member gift, lock the long-term members in advance

In addition to free experience of WPS AI, the "WPS double 11 Value Purchase" activity also benefits users by way of giving time length, specifically: 1) Buy 2 years of svip gift time length, buy 1 year of svip gift time length, buy 1 year Super Membership Pro and give away 6 months. 2) The user can redeem the Super Membership service with the existing membership points.

in the short term, long-term members can be locked in advance by giving away time, increasing the proportion of long-term members and optimizing the structure of paid users. In the long run, the duration of the gift and the exchange of points are both short-term profit-making marketing methods, allowing users to purchase services at a lower price. After the cancellation of the limited-time discount in the future, ARPU has room for improvement.

MS 365 is Copilot officially for commercial use. overseas leaders lead AI office commercialization Microsoft 365 Copilot to officially provide commercial services to enterprise customers from November 1. according to the pricing of us $30/month per user, overseas leaders take the lead in charging intelligent office products, leading the process of AI office commercialization.

As a leading domestic office software manufacturer, the company actively optimize and upgrade AI products to prepare for product commercialization. WPS AI from the AIGC, Copilot, Insight three levels, to promote AI in the office scene landing, application scenarios more specific. Targeted to solve the problem of slow product operation speed and high cost, the company also announced a self-research model and training and push integrated deployment plan, can help solve the constraints of product commercialization process product experience, promotion costs and other issues. The opening of the WPS AI experience to members this time means that commercialization is further advanced.

earnings forecast and valuation

looking forward to the future, the company is expected to benefit from the accelerated promotion of trust, membership system reform and WPS365 brand upgrade effect gradually realized, AI products after commercialization to open up product volume and price space. The company's business growth momentum is sufficient. It is estimated that the company's operating income from 2023 to 2025 will be 48.52, 64.50 and 8.499 billion yuan, the net profit attributable to the parent company will be 14.77, 20.38 and 2.753 billion yuan, and EPS will be 3.20, 4.41 and 5.96 yuan, maintaining the "buy" rating.

risk tips

the promotion of new member system is less than expected, AI product research and development and landing are less than expected, IT expenditure of downstream customers is less than expected, and market competition intensifies risks