Tag: Kingsoft

Kingsoft Announces 2020 Annual and Fourth Quarter Results

Focus on Online Collaborative and Cloud Office Strategy
Solid Growth of Core Premium Games

 Kingsoft Corporation Limited (“Kingsoft” or the “Company”; HKEx stock code: 03888), a leading Chinese software and Internet service company, has announced its 2020 annual results and fourth quarter results for the period ended 31 December 2020.

For the year of 2020, the revenue of Kingsoft increased 28% year-on-year to RMB5,594.2 million. Revenue from the online games and others and office software and services represented 60% and 40%, respectively, of the Company’s total revenue for the year of 2020. Gross profit for the year of 2020 increased 31% year-on-year to RMB4,677.0 million, while operating profit increased 83% year-on-year to RMB1,855.1 million.

For the fourth quarter of 2020, the Company’s revenue increased 8% year-on-year and 15% quarter-on-quarter to RMB1,605.5 million. Revenue from the online games and others and office software and services represented 53% and 47%, respectively, of the Company’s total revenue for the fourth quarter of 2020. Gross profit for the fourth quarter of 2020 increased 8% year-on-year and 16% quarter-on-quarter to RMB1,346.9 million, while operating profit increased 9% year-on-year and 55% quarter-on-quarter to RMB559.8 million.

Mr. Jun LEI, Chairman of Kingsoft, commented, “In a landmark year, we took advantage of the industry trend to expand our core businesses. Kingsoft Office Group seized the opportunity presented by the digital transformation efforts across industries to introduce online collaborative office tools and brought high-quality products and services to a larger group of users. Meanwhile, we made continuous efforts to strengthen the research and development capabilities of premium games, maintaining longevity and vitality of core games and achieved steady growth. We believe that our efforts will lay a solid foundation for the future expansion of the office service market and our presence in the gaming market.”

Mr. Tao ZOU, Chief Executive Officer of Kingsoft, added, “We achieved a solid growth in 2020, with our revenue up 28% year-on-year to RMB5,594.2 million. The momentum continued in both office software and services’ businesses as well as online games and others, with revenue of the segments surging by 43% and 19% year-on-year respectively. In tandem with our strong revenue growth, our operating profit increased 83% year-on-year to RMB1,855.1 million during the year.”

BUSINESS REVIEW
Office Software and Services
For the year of 2020, office software and services business achieved outstanding performance, with revenue increasing significantly by 43% year-on-year to RMB2,257.2 million. Revenue for the fourth quarter of 2020 increased 38% year-on-year and 29% quarter-on-quarter to RMB756.5 million. In 2020, Kingsoft Office Group provided more high-quality cloud-based collaboration and office application services for enterprises and individual users. For government and enterprise businesses, Kingsoft Office Group is committed to accelerate the development within the industry and has assisted in the formulation of certain office application and services standards. In addition, Kingsoft Office Group have completed product adaptation with its developer partners and consolidated co-operation with other core hardware and software suppliers, which further optimized the office ecosystem development.

Riding the wave of remote working, online collaboration has become the new core product strategy for Kingsoft Office Group, and a series of online collaboration products have been launched in 2020. In addition, Kingsoft Office Group has launched WPS+ cloud services for micro, small and medium enterprises. As a beneficiary of rising demand due to increased remote working amid the pandemic, the market penetration and customer loyalty of WPS+ cloud services have significantly improved.

Kingsoft Office Group’s personal subscription business achieved outstanding performance during the year, driven by the rapid growth in the number of WPS members. Kingsoft Office Group focused on expanding content and resources to promote the organic growth of WPS members, and key operational indicators of personal cloud services grew rapidly. Kingsoft Office Group also expanded its sales and marketing channel to enhance the penetration of the paying subscribers.

In addition, WPS Office will feature as one of the second-level examination subjects in the National Computer Rank Examination, demonstrating significant progress in terms of the awareness of its office software solutions in China.

Forging ahead, Kingsoft Office Group will continue to adhere to technological empowerment and user-oriented principles, aiming to drive office innovations for individual and enterprise users globally.

Online Games and Others
Revenue from the online games business and others for the year of 2020 increased 19% year-on-year to RMB3,337.1 million. Revenue for the fourth quarter of 2020 increased 5% quarter-on-quarter to RMB849.0 million. The steady year-on-year growth was mainly attributable to the online games business’s focus in product development and the stable growth of core premium games. JX Online III PC game and other PC games of the JX series have achieved double-digit growth during the year. In the fourth quarter, the anniversary expansion pack Feng Tian Zheng Dao was launched for the JX Online III PC game. The online games business also recorded stable performance in its mobile games. The mobile game Double Life World was launched in South Korea in 2020, and it had won Google Play’s Best Innovative Games of 2020 award in South Korea.

The online games business continued to enhance the influence of JX IP and made strong efforts to expand its presence in the cultural and creative industries. JX Online III – The Adventure of Shen Jianxin in Chang’an, an animation series based on the JX Online III PC game was released on Bilibili in October 2020 and was much welcomed by gamers. The online games business also started to work on multiple film and television production projects based on the JX IP in 2020.

Looking forward to 2021, the online games business will continue to place emphasis on the JX series to drive sustained growth. At the same time, it will continue to invest in research & development of new game genres and operation, aiming to enhance its competitiveness within the overall gaming industry.

Mr. Jun LEI concluded, “Amidst a turbulent economic environment and global COVID-19 pandemic in 2020, we still managed to achieve a solid performance. Looking ahead, we will continue to focus on our office software and service business, and continue to deepen our online collaborative and cloud office strategy, aiming to improve the industry’s ecological development and our core competitive advantages. Regarding our online games business, we will continue to maintain the solid development of our core games while bringing new game genres to further strengthen our development in the online games business. We remain confident of a robust operational outlook and sustained growth for 2021.”

About Kingsoft Corporation Limited
Kingsoft is a leading software and Internet services company based in China listed on the stock exchange of Hong Kong. It has two subsidiaries including Seasun and Kingsoft Office. Following the implementation of its “mobile internet transformation” strategy, Kingsoft has completed the comprehensive transformation of its overall business and management models and formed a strategic platform with interactive entertainment and office software as the pillars and cloud services and AI as the new directions. The Company has more than 5,000 staff around the world and enjoys a large market share in China. For more information, please visit http://www.kingsoft.com.

Kingsoft Investor Relations:
Francie Lu Tel: (86) 10 6292 7777 Email: ir@kingsoft.com

For further queries, please contact Hill+Knowlton Strategies Asia:
Sophie Du Tel: (852) 2894 6264 Email: kingsoft@hkstrategies.com

Kingsoft Announces 2019 Annual and Fourth Quarter Results

Office Software and Services Business Achieves Breakthroughs;
Cloud Services Further Expand Leveraging New Technologies

Kingsoft Corporation Limited (“Kingsoft” or the “Company”; HKEx stock code: 03888), a leading Chinese software and Internet service company, has announced its 2019 unaudited annual results and fourth quarter results for the period ended 31 December 2019.

For the year of 2019, the revenue of Kingsoft increased 39% year-on-year to RMB8,218.3 million. Revenue from the online games, cloud services and office software and services and others represented 33%, 47% and 20%, respectively, of the Company’s total revenue for the year of 2019.

For the fourth quarter of 2019, the Company’s revenue increased 48% year-on-year and 28% quarter-on-quarter to RMB2,594.7 million. Revenue from the online games, cloud services and office software and services and others represented 35%, 43% and 22%, respectively, of the Company’s total revenue for the fourth quarter of 2019. Gross profit for the fourth quarter of 2019 increased 70% year-on-year and increased 56% quarter-on-quarter to RMB1,282.0 million. Operating profit before share-based compensation costs for the fourth quarter of 2019 was RMB235.0 million, compared to loss of RMB105.4 million in the corresponding period last year.

Mr. Jun LEI, Chairman of Kingsoft, commented, “Our businesses sustained positive momentum during the quarter. Our online games business delivered stable growth in both PC and mobile segments, while office software and services and cloud services continued to achieve robust revenue growth with accelerated deployment across industries. Meanwhile, we have completed the listing of our office software and services business, Beijing Kingsoft Office Software Inc. (“Beijing Office Software”), on 18 November 2019 on the science and technology innovation board of the Shanghai Stock Exchange (“SSE STAR Market”). Overall, we made solid progress in 2019, and we are confident in a robust operating outlook and sustained growth for 2020.”

Mr. Tao ZOU, Chief Executive Officer of Kingsoft, added, “Our revenue for the fourth quarter was RMB2,594.7 million, up 48% year-on-year and 28% quarter-on-quarter. Revenue of 2019 was RMB8,218.3 million, increasing 39% year-on-year. Our revenue maintained a stable growth against the backdrop of a dynamic environment thanks to our solid market competitiveness and execution capabilities. Meanwhile, annual revenue of cloud services and office software and services and others maintained a strong and rapid growth, with a year-on-year growth of 73% and 43%, respectively.”

BUSINESS REVIEW

Office Software and Services and Others

For the year of 2019, the revenue from office software and services and others increased 43% year-on-year to RMB1,622.3 million. Revenue in the fourth quarter increased 52% year-on-year and 48% quarter-on-quarter to RMB565.7 million. The increase was primarily due to strong revenue growth from WPS Office subscription and licensing services, driven by the expansion of user base, and the increase in consumption frequency and paid conversion rate. Riding on the growth of the office software market, promotion of licensed software in China, enhancement of brand recognition and technology, revenue from WPS increased rapidly year-on-year.

For the fourth quarter of 2019, the office software services sector made its debut in the capital market, gaining momentum for further development. On 18 November 2019, Beijing Office Software was listed on the SSE STAR Market, raising RMB4.459 billion for four key aspects: development and upgrade of WPS Office software, construction of an AI infrastructure R&D center for office software, Internet cloud services for office products, and internationalization of office software. During the period, Kingsoft continued to make encouraging progress in working with key government clients and entered into agreements with leading clients in the fields including energy and finance for comprehensive cooperation in office software. In October 2019, WPS Office’s overseas monthly active users exceeded 100 million as the Company actively seized the opportunities from the Belt and Road Initiative. With the proactive promotion of its cloud office strategy, WPS Office subscription services achieved significant growth during the quarter. At the beginning of 2020, the demand for cloud office and remote office work by various enterprises has significantly increased, driving the rapid development of online collaboration products like Kingsoft Docs. As of 2 March, the number of MAU of Kingsoft Docs has exceeded 239 million. This trend also further fostered user habits and boosted market demand, expanding the potential growth in WPS Office’s personal and enterprises subscription services in the future.

Cloud Services

For the year of 2019, the revenue of cloud services increased 73% year-on-year to RMB3,847.2 million. Revenue in the fourth quarter amounted to RMB1,113.3 million. Leveraging the Company’s competitive advantages in internet and video sectors, as well as the accelerated implementation of Kingsoft Cloud across various industry sectors, revenue from cloud services business maintained its rapid growth during the fourth quarter.

Kingsoft Cloud strengthened its industry leading position in the internet and video sectors, continued to focus on technology innovation and further promoted the integration and implementation of cutting-edge technologies such as edge computing, smart high definition and artificial intelligence (“AI”) etc. As a leading cloud service provider, Kingsoft Cloud made strong inroads in terms of government and enterprise services, financial services and artificial intelligence of things (“AIoT”). Key highlights include:

  • Beijing government’s cloud project was recognized as one of the “Outstanding Innovation Case Studies” in “2019 Innovation Case Studies of Government Digital Applications”.
  • Kingsoft Cloud was awarded the “Outstanding Contribution Award for Fintech Product Innovation” etc.

Kingsoft Cloud quickly responded to the COVID-19 outbreak and launched eight anti-epidemic products and solutions, covering epidemic prevention and control, collaborative office, remote education and telemedicine etc. The Emergency Materials Management System has provided services to more than 10,000 institutions in multiple municipalities and autonomous regions across China upon its launch, receiving unanimous praise from the customers.

Meanwhile, the Company is considering a possible spin-off and separate listing of Kingsoft Cloud Holdings Limited. On 20 December 2019 (New York time), Kingsoft Cloud Holdings Limited submitted on a confidential basis to SEC a draft registration statement for a possible IPO. Going forward, Kingsoft Cloud remains committed to strengthening the strategic cooperation with Xiaomi’s AIoT, increasing the in-depth service of oversea business, leading the integration of cloud computing, big data, AI and other cutting-edge technologies with various industry scenarios, striving for cost optimization, and empowering enterprise clients in their digital transformations.

Online Games

Revenue from the online games business for the year of 2019 increased 8% year-on-year to RMB2,748.7 million. Revenue in the fourth quarter increased 39% year-on-year and 38% quarter-on-quarter to RMB915.8 million. Both PC and mobile games recorded stable performance during the year, and revenues improved year-on-year.

Kingsoft has launched a new expansion pack for its flagship JX Online III PC game in the fourth quarter, resulting in a 24% jump in average daily active users (compared to 30 days prior to the launch) and a record-high monthly gross billing in December. The Company’s classic PC game JX World achieved year-on-year growth in both number of gamers and revenue. The continued growth of the JX series demonstrated the Company’s resilience and strong capabilities in developing and operating long-term games and IP values. For mobile games, Kingsoft’s JX Online I continued to perform well during the year with a stable concurrent income. In addition, the Company has launched a new mobile game Double Life World in Japan in September, followed by China in November, earning high praise at home and abroad. The newly launched mobile game was ranked as the number one in the iOS top free charts on its debut, and subsequently climbed to top five in the top grossing charts. The successful launch of Double Life World has further strengthened the Company’s diversified product strategy. Kingsoft will seize market opportunities and achieve breakthroughs in product diversification. In view of the dynamic market and regulatory environment in China, Kingsoft will continue to expand overseas presence to further drive the growth of games business.

Mr. Jun LEI concluded, “Amidst a turbulent economic environment, we managed to achieve a satisfactory performance in 2019. Our operating loss margin has been narrowed during the year, mainly due to the significant improvement of the operation efficiency of our cloud business. Meanwhile, Beijing Office Software was successfully listed on the SSE STAR Market. Although our investments in the cloud business led to an operating loss in 2019, we recommended the payment of a final dividend of HK$0.1 per share with an aim to reciprocate our shareholders’ long-term support. Subsequent to the relief of the global COVID-19 pandemic and conclusion of the IPO of Kingsoft Cloud Holdings Limited, we will further review our dividend policy as and when appropriate. Going forward, Kingsoft Cloud will be committed to strengthening its market position, by leveraging leading technologies and promoting innovation across various industries. We will work with strategic partners to further expand our ecosystem, and to make our cloud computing offerings more accessible globally. In terms of office software and services, WPS will focus on its multi-pronged strategies of “Cloud, Multi-screen, Content and AI” to solve our users’ diverse needs and to maintain our competitive advantages. As we continue to seize opportunities arising from enterprises’ digital transformation, Kingsoft will maintain its competitive edge in the industry. Looking ahead, we see a clear momentum of growth across all our business segments driven by increasing customer demand. We are confident to meet our performance targets in the coming year and create long-term value for our shareholders.”

About Kingsoft Corporation Limited

Kingsoft is a leading software and Internet services company based in China listed on the stock exchange of Hong Kong. It has three subsidiaries including Seasun, Kingsoft Cloud and Kingsoft Office. Following the implementation of its “mobile internet transformation” strategy, Kingsoft has completed the comprehensive transformation of its overall business and management models and formed a strategic platform with interactive entertainment and office software as the pillars and cloud computing as the new growth driver and source. The Company has over 7,000 staff around the world. It enjoys a large market share in various countries and regions both home and abroad. For more information, please visit http://www.kingsoft.com.

Kingsoft Investor Relations:
Francie Lu Tel: (86) 10 6292 7777 Email: ir@kingsoft.com
For further queries, please contact
Hill+Knowlton Strategies Asia:
Sophie Du Tel: (852) 2894 6264 Email: kingsoft@hkstrategies.com

Kingsoft Announces 2019 Third Quarter Results

Kingsoft Corporation Limited (“Kingsoft” or the “Company”; HKEX stock code: 03888), a leading Chinese software and internet service company, has announced its unaudited quarterly results for the three months ended 30 September 2019 (“period under review”).

During the period under review, the revenue of Kingsoft increased 32% year-on-year and 8% quarter-on-quarter to RMB2,022.9 million. Revenue from online games, cloud services, and office software and services and others represented 33%, 48% and 19% respectively of total revenue. Gross profit for the third quarter increased 15% quarter-on-quarter to RMB822.9 million.

Mr. Jun LEI, Chairman of Kingsoft, commented, “Our various businesses continued to show good momentum in the third quarter of 2019. Our flagship JX Online III PC game and JX Online I mobile game maintained their popularity among users and achieved satisfactory revenue growth quarter-on-quarter. Our cloud services business achieved rapid growth, and we officially released a new range of finance cloud solutions to expand our customer portfolio for this segment. Meanwhile, revenue from the WPS value-added services maintained strong growth, and the listing of Beijing Office Software on the science and technology innovation board on the Shanghai Stock Exchange is expected to take place on 18 November 2019.”

Mr. Tao ZOU, Chief Executive Officer of Kingsoft, added, “Our revenue was RMB2,022.9 million, up 32% year-on-year and 8% quarter-on-quarter. Revenue of cloud services continued to grow rapidly year-on-year, driven by our competitive advantage in mobile videos and the internet market, as well as breakthroughs in the enterprise and government markets.”

BUSINESS REVIEW
Online Games
Revenue from the online games business for the third quarter of 2019 increased 16% quarter-on-quarter to RMB663.5 million. The quarter-on-quarter increase was mainly due to revenue growth of our flagship game JX Online III PC game with continuous improvements in user experience through constant content updates, and revenue contribution from JX Online III mobile game launched in June 2019.

On 28 August, Kingsoft celebrated the 10th anniversary of the JX Online III PC game in Xi’an, and shared with its gamers the development outlook on technological innovation, user operation and content creation. Regarding mobile games, Kingsoft continued to pursue a diversified product strategy, and a new mobile game Double Life World was launched in Japan on 20 September. The domestic version of the game will be released in the near future. In the fourth quarter, the Company plans to launch a new expansion pack for the JX Online III PC game to provide players with new game content and better experience.

Cloud Services
Driven by its competitive advantage in mobile videos and the internet market, as well as breakthroughs in the enterprise market, revenue from the cloud services for the third quarter of 2019 maintained rapid growth, increasing 62% year-on-year and 6% quarter-on-quarter to RMB976.3 million.

Leveraging the Company’s leading infrastructure and technology, Kingsoft video cloud successfully supported the live broadcast of Autohome’s “818 Global Car Night Gala” and the “National Day Parade on the PRC’s 70th Anniversary Celebrations”. During the Asia Pacific CDN Summit 2019, Kingsoft Cloud won the “CDN Leader Award for Top 10 Outstanding Operating Enterprises”. In terms of game cloud, together with China Telecom and Intel, Kingsoft Cloud jointly released cloud gaming solutions to achieve fast cloud streaming from the player-end. In terms of the finance cloud development, Kingsoft Cloud has achieved a financial ecosystem from the most basic cloud infrastructure construction, by launching full-stack smart finance cloud solutions and KBaaS commercial blockchain platform. “Jinggang Cloud”, an industrial cloud platform jointly built by Kingsoft Cloud’s government cloud and Ansteel, was recognized as one of the “Top 10 Case Studies in Cloud Migration” in 2019. The Company secured a strategic cooperation with the Xiqing district of Tianjin to jointly develop the “Xiqing Cloud”, and with the government of Chibi city and Shuangliu district of Chengdu to build a big data industry ecosystem. Looking to the future, Kingsoft is committed to empowering enterprise clients in digital transformations across a variety of industries, by leading the integration and innovation of cloud computing, big data, AI and other cutting-edge technologies.

Office Software and Services and Others
Revenue from the office software and services and others for the third quarter of 2019 increased 50% year-on-year to RMB383.1 million. The year-on-year increase was mainly due to stable growth from value-added services of WPS Office personal edition, driven by enhanced user engagement and increased paid users with more practical functions and high quality resources provided.

Office software and services business continued to show sustained growth. By providing complete coverage of office use case scenarios, the performance of the personal value-added services of WPS Office remained robust. In addition, the Company launched a new version of WPS Office for Linux which utilizes its technological capabilities, including knowledge base, AI and data mining. By introducing AI technology into office products, WPS further enhanced user experience and service capabilities on the Linux system. This in turn strengthened Kingsoft’s ability to drive its government enterprise business. In terms of overseas expansion, Kingsoft released the WPS Office 2020 suite in New Delhi, India on 28 August. As Kingsoft Office’s flagship office software suite, WPS Office 2020 features a comprehensive suite of functions and services, including pre-built templates and PDF editing, etc. as well as macOS support. Looking ahead, Kingsoft is committed to providing a variety of cutting-edge office products and services, creating the best office user experience for global customers through technology empowerment.

Mr. Jun LEI concluded, “On the whole, we are pleased to achieve a satisfactory performance in the third quarter amid a challenging environment. As we continue to see the convergence of innovation and digital transformation, Kingsoft will maintain its competitive edge in the industry. Looking ahead, we expect our business performance to remain robust, driven by sustainable growth of our cloud services business and office software business. We are cautiously confident to meet our 2019 target and endeavor to generate long-term value for our shareholders.”

About Kingsoft Corporation Limited
Kingsoft is a leading software and Internet services company based in China listed on the stock exchange of Hong Kong. It has three subsidiaries including Seasun, Kingsoft Cloud and Kingsoft Office. Following the implementation of its “mobile internet transformation” strategy, Kingsoft has completed the comprehensive transformation of its overall business and management models and formed a strategic platform with interactive entertainment and office software as the pillars and cloud computing as the new growth driver and source. The Company has over 7,000 staff around the world. It enjoys a large market share in various countries and regions both home and abroad. For more information, please visit http://www.kingsoft.com.

Kingsoft Investor Relations:
Francie Lu Tel: (86) 10 6292 7777 Email: ir@kingsoft.com

For further queries, please contact Hill+Knowlton Strategies Asia:
Sophie Du Tel: (852) 2894 6264 Email: kingsoft@hkstrategies.com