Kingsoft Office Data Asset Valuation Study

Figure 1.

Figure 2.

2024-2028 Kingsoft office free cash flow forecast value (Hundred million Yuan)

Item / year	2024	2025	2026	2027	2028
Operating income	55.19	64.91	75.56	87.25	100.05
Operating cost	8.55	10.37	12.41	14.7	17.26
Taxes and additional	0.43	0.48	0.53	0.59	0.65
Sales cost	11.67	13.72	15.96	18.42	21.11
Management fee	5.48	6.47	7.56	8.76	10.07
Financial cost	-1.08	-1.46	-1.89	-2.36	-2.9
R&d cost	18.3	21.58	25.19	29.16	33.53
Gross profit	15.41	17.12	18.92	20.83	22.85
Minus: income tax	0.86	0.97	1.08	1.2	1.33
Net profit	14.55	16.14	17.81	19.59	21.46
Add: depreciation and amortization	1	1.13	1.28	1.44	1.62
Minus: capital expenditure	2.28	2.71	3.16	3.65	4.17
Reduction: net operating capital net increase	-0.79	-2.12	-3.44	-4.75	-6.04
Free cash flow	14.05	16.69	19.38	22.13	24.95

Results of chip test differential test

Raw sequence standard deviation	S1	1.23
Standard deviation of the absolute error sequence	S2	0.33
Variance ratio	C	0.45
Small error probability	P	1.00

Other data forecasts for 2019-2024-jinshan (Hundred million Yuan)

Item / year	2024	2025	2026	2027	2028
Operating income	55.19	64.91	75.56	87.25	100.05
Current assets	111.19	120.28	130.11	140.75	152.25
Fixed assets	0.79	0.81	0.82	0.84	0.86
Intangible assets	1.08	1.15	1.22	1.3	1.37
Depreciation	0.42	0.47	0.52	0.57	0.62
Amortization	0.57	0.67	0.77	0.88	1.00

Kingsoft office data asset value

	2024	2025	2026	2027	2028
Free cash flow	14.05	16.69	19.38	22.13	24.95
Current asset contribution	3.67	3.99	4.32	4.67	5.05
Fixed asset contribution	0.45	0.5	0.55	0.6	0.66
Intangible contribution	0.62	0.71	0.82	0.93	1.05
Excess income of data assets	9.32	11.48	13.69	15.93	18.19
Discount rate	6.618%
Discount factor	0.94	0.88	0.83	0.75	0.73
Present value	8.74	10.1	11.3	12.33	13.2
Kingsoft office data asset value	55.66
The proportion of data assets in the total assets	39.81%

Main financial data of Kingsoft Office’s solvency in 2019-2023

Year	2019	2020	2021	2022	2023
Current ratio	9.19	5.63	3.83	2.97	2.21
Quick ratio	9.16	5.61	3.81	2.95	2.18
Equity ratio	13.12%	24.03%	34.11%	38.25%	40.06%
Asset-liability ratio	11.33%	19.04%	25.37%	27.03%	28.30%

Kingsoft office fixed assets contribution value forecast

Item / year	2024	2025	2026	2027	2028
Initial intangible assets	0.87	1.08	1.15	1.22	1.3
Final intangible assets	1.08	1.15	1.22	1.3	1.37
Annual mean	0.98	1.11	1.19	1.26	1.33
Amortization	0.57	0.67	0.77	0.88	1
Returns	4.205%
Returns on intangible assets	0.04	0.05	0.05	0.05	0.06
Contribution value	0.62	0.71	0.82	0.93	1.05

Main financial data of profitability of Kingsoft Office in 2019-2023

Year	2019	2020	2021	2022	2023
Net profit (100 million yuan)	4.007	8.775	10.411	11.181	13.185
Total revenue (million yuan)	15.808	22.609	32.798	38.852	45.559
Basic earnings per share (yuan)	1.092	1.901	2.253	2.418	2.860
Net assets per share (yuan)	13.159	14.866	16.751	18.918	21.552
Gross profit margin (%)	85.582	87.701	86.909	85.000	85.300
Return on equity (%)	22.597	13.635	14.343	13.641	14.179

Main financial data of Kingsoft office operation capacity in 2019-2023

Year	2019	2020	2021	2022	2023
Business cycle (day)	67.04	60.94	45.97	43.21	40.65
Inventory turnover (times)	187.23	200.39	235.59	251.66	286.32
Inventory turnover days (days)	1.84	1.86	1.55	1.38	1.15
Accounts receivable turnover days (days)	65.18	59.17	44.44	38.62	33.91

Free cash flow of Kingsoft Office enterprises in 2019-2023 (Hundred million Yuan)

Item / year	2019	2020	2021	2022	2023
Operating income	15.8	22.61	32.8	38.85	45.56
Operating cost	2.28	2.78	4.29	5.83	6.7
Taxes and additional	0.16	0.23	0.35	0.35	0.37
Sales cost	3.45	4.83	6.95	8.18	9.67
Management fee	1.36	2.13	3.26	3.92	4.44
Financial cost	-0.03	-0.09	-0.17	-0.13	-0.95
R&d cost	5.99	7.11	10.82	13.31	14.72
Gross profit	4.06	9.36	11.19	11.98	13.9
Minus: income tax	0.06	0.49	0.5	0.67	0.75
Net profit	4.01	8.87	10.69	11.31	13.14
Add: depreciation and amortization	0.32	0.47	0.68	0.83	0.8
Minus: capital expenditure	0.63	0.55	1.49	1.76	1.66
Reduction: net operating capital net increase	48.88	6.97	-2.24	5.99	-0.32
Free cash flow	-45.18	1.82	12.12	4.4	12.61

Kingsoft office equity and bond financing ratio

	Mean	2024	2025	2026	2027	2028
Total liabilities	24.51	7.75	16.21	26.45	32.59	39.54
Gross equity	79.12	60.69	68.91	77.8	87.98	100.2
Total assets	103.63	68.44	85.12	104.26	120.58	139.74
Liability ratio (%)	24.53	7.74	16.22	26.41	32.55	39.53
Proportion of ownership interest (%)	79.11	60.61	68.88	77.82	87.95	100.21

Kingsoft office current assets contribution value forecast

Item / year	2024	2025	2026	2027	2028
Initial current assets	101.47	111.19	120.28	130.11	140.75
Final current assets	111.19	120.28	130.11	140.75	152.25
Annual mean	106.33	115.74	125.2	135.43	146.5
Returns	3.448%
Contribution value	3.67	3.99	4.32	4.67	5.05