According to the report, in the first half of this year, Jinshan office realized 916 million yuan of operating revenue, an increase of 33.64% over the same period of last year, and a net profit of 357 million yuan, up 143.3% year on year. < / P > < p > the company explained in the semi annual report that the sharp increase in operating revenue during the reporting period was mainly due to the growth of office service subscription business income. In the first half of this year, the office service subscription business was 533 million, an increase of 70.89% over the same period of last year. Among them, individual customer subscription is the key driving force for growth, and WPS cloud office services also went up against the trend during the epidemic period. < / P > < p > for the future development and investment feasibility of Kingsoft office, Minsheng Securities believes that Jinshan office is a leading manufacturer of domestic office software, with significant advantages in terms of number of users and technical level, and this advantage is scarce in the field of information and innovation. Therefore, a certain valuation premium can be given to the company. It is estimated that the PE of the company in 2020-2022 will be 217x / 155x / 113x. < p > < p > SHEN wanhongyuan also raised the profit forecast due to the second quarter performance of Jinshan office, and maintained the “overweight” rating of the company, taking into account the company’s competitive environment and track enough good, cloud business model constantly mature, excellent growth and other factors. < p > < p > prior to this, the performance of Jinshan office has exceeded the expectation continuously. In the first quarter of this year, Jinshan office achieved a revenue of 372 million yuan, a year-on-year increase of 30.9%, and a year-on-year increase in net profit of more than 130%. However, contrary to the positive attitude of the seller’s institution, the capital market reaction of Jinshan office is extremely dull. From August 19 to 20, the first two trading days after the disclosure of the semi annual report, the share price of Jinshan office has fallen by 7.17%. Jinshan office has more than 30 years of technology accumulation and R & D experience in the field of office software, and the key technologies of its core products are independent research and development. At present, it has domestic leading office technologies such as multi platform operating system adaptation technology, unified cross process object model for multi platform third-party applications, WPS new kernel engine technology, etc. Data shows that as of June 30, 2020, the company has applied for 602 invention patents and 222 authorized patents. In addition, the company continues to increase R & D investment. In the first half of this year, the R & D investment accounted for 33.47% of the operating revenue, and all of them were expensed. The number of R & D personnel accounted for 65.2% of the total number of the company. < / P > < p > the company’s R & D technology advantages enable the products, and quickly seize the market share under the company’s differentiated competition strategy. In the early years, WPS office personal edition gained a large number of users through the “free + advertising” mode. In 2011, when the mobile terminal development of overseas manufacturers such as Microsoft Office lagged behind, Jinshan office launched mobile end office products and quickly occupied the domestic and foreign markets. In 2015, “WPS + one stop cloud office” was released. At the same time, the company began to transform from “product oriented” to “service-oriented”, the revenue of office service subscription business increased rapidly, and actively consolidated the domestic market with the advantages of localization of products and services. As of the first half of this year, the number of monthly active users of mobile version has reached 275 million, and the overseas business coverage has also increased from Southeast Asia and Europe to Russia, North America, South America and Africa. With its product and technical advantages, Jinshan office has accumulated a large number of b-end customer resources such as State Party and government organs, large domestic enterprises and institutions. According to the company’s official website, the business of Jinshan office covers more than 30 provincial, municipal and autonomous region governments and more than 400 municipal and county-level governments, with a government procurement rate of 90%. According to Shenwan Hongyuan, 57.5% of the 120 Chinese enterprises in the “world’s top 500” enterprises provide office services. < / P > < p > in addition, according to the calculation of Shenwan Hongyuan Research Institute, Jinshan office verifies its global competitiveness through software going out to sea and business model SaaS upgrading, and actively promotes the general trend of basic software localization, which will bring broader market space for the company. It is expected that the company’s C-end will accelerate penetration and conversion of payment rate, with forward market space of more than 10 billion yuan, and the potential revenue scale of B end will reach 30 billion yuan. < p > < p > since this year, the cumulative increase of Jinshan office’s stock price has reached 126.60%, and the company’s current price earnings ratio (TTM) is also as high as 279.88. In contrast, the price earnings ratio (TTM) of its comparable company UFIDA network is 165.34, and that of technology giant Tencent holdings is only 42.40. Its major shareholder, Jinshan Software Hong Kong stock, is listed, and its market value only accounts for about 1 / 4 of Jinshan office. According to the data, the total market value of Kingsoft office is more than 170 billion yuan, ranking first in the industry. The total market value of Kingsoft is only 57.3 billion yuan. In the first half of this year, the business income of 3600, which is also a software service industry, reached 2.25 billion yuan, more than twice that of Jinshan office, and its market value is also lower than that of Jinshan office. < / P > < p > the high P / E ratio and valuation reflect the high expectation of the future growth of Jinshan office. However, at present, the profitability and growth of Jinshan office seems to be difficult to achieve this expectation. Financial data show that the growth rate of basic earnings per share of Jinshan office in recent three years is 66.67%, 43.33% and 26.74%, showing a downward trend. However, the year-on-year growth rate of more than 90% in the first half of this year is mainly affected by home office during the epidemic period. If we want to maintain a high growth rate in the future, it is still difficult to underestimate. In addition, some people in the industry also pointed out that the product expansion led by new technologies such as artificial intelligence does not only exist in Jinshan office, but also exists in a large number of large software companies. Therefore, the argument that securities companies give Jinshan office premium based on this is untenable.