欢迎访问网贷财经！ 电话 4008937218

　　机构：交银国际

　　4Q17 revenue beat by 2%; OPM down 3PPts QoQ on higher cost related to cloud business. Total revenue was RMB1.38bn, up 6%/7% QoQ/YoY and 2% higher than our estimate. Adjusted net profit was RMB329m, implying a net margin of 24%, flat QoQ/ down 4ppts YoY. Adjusted OPM was 14%, vs. our estimate of 15%. 

　　Game revenue was RMB751m, down 8%YoY/ up 1% QoQ. The YoY decline resulted from the mature life cycle of JX I mobile game, as expected. JX III revenue jumped by 32% in 2017, and the launch of revamped version attracted attention with quality upgrade and new game features. New games to be launched in 2018: YSYY , JX Online II and JX Online III mobile games. With the launch of new games, we expect higher growth in game revenue in 2018 than 2017 .

　　 Cloud revenue increased by 57%/81% YoY in 4Q17/2017. Kingsoft Cloud was ranked as Top 3 IAAS public cloud service provider in China, according to International Data Corporation’s data published in Nov 2017. Leveraging its leading position in gaming and video cloud, Kingsoft Cloud is expanding customer usage and product selection, including CDN, hybrid cloud and network security. We expect the rapid growth of cloud business to continue in 2018, with a narrowed loss margin. 

　　Expect higher growth rate of WPS in 2018. WPS revenue increased by 15%/4% QoQ/YoY in 4Q17, driven by WPS online marketing services and growth in valueadded services in WPS office personal edition . WPS revenue increased by 32% YoY in 2017, and the growth is expected to accelerate driven by higher demand from advertisers, according to management.  

　　Valuation. We lift 2018/19E revenue by 2%/3% on growing WPS and better-thanexpected game revenue according to management guidance, and adjust bottom line forecasts accordingly. Based on 10-year DCF for 2018-27E, we lift TP from HK$33.00 to HK$35.00, implying 30x/23x 2018/19E P/E. Maintain Buy. Potential catalysts: successful launch of JX III mobile game; A-share listing of WPS. Risks: laterthan-expected mobile games launch; lower-than-expected performance of new games on competition. 

靠谱众投 kp899.com：您放心的投资理财平台，即将起航!