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Tuesday, 19 March 2013, 19:00 HKT/SGT

Source: Kingsoft Corporation Limited
Kingsoft 2012 Annual and Q4 Results Achieved Rapid Growth
A Record Year for All Business Lines

HONG KONG, Mar 19, 2013 - (ACN Newswire) - Kingsoft Corporation Limited ("Kingsoft" or the "Company;" SEHK:3888), a leading Chinese software and Internet services company, announced its audited 2012 annual results, and its unaudited 2012 fourth quarter results.

In the fourth quarter of 2012, the revenue of Kingsoft increased quarter-over-quarter by 18% and year-over-year by 52% to RMB430.7 million. Gross profit increased quarter-over-quarter by 18% and year-over-year by 58% to RMB378.8 million.

In the year under review, total revenue surged by 38% year-over-year to RMB1,411.2 million. Gross profit rose strongly by 40% year-over-year to RMB1,224.2 million. Profit attributable to owners of the parent increased by 33% to RMB432.6 million. Revenue from entertainment and application software business segments reached RMB851.4 million and RMB544.1 million respectively, which represented approximately 60% and 39% of the Company's total revenue in 2012. Cash and cash equivalents increased from approximately RMB1.95 billion in 2011 to approximately RMB2.42 billion in 2012, reflecting the strong cash position of the Company. Basic earnings per share for the year were RMB37.85 cents (2011: RMB28.86 cents). The Board of Directors has recommended a final dividend of HKD0.11 per share for year 2012 (2011: HKD0.10 per share).

Mr Jun Lei, Chairman of Kingsoft, said, "The year 2012 was a critical and historical year for Kingsoft marked by encouraging performance and breakthrough. The MBO of Kingsoft WPS Office completed in July marked the completion of restructuring our three major subsidiaries. Among the three major existing business lines, advertising revenue from Kingsoft Internet Security continued setting historical highs; JX Online III gained greater popularity, doubling its revenue; and WPS Office also seized the market opportunities brought about by the government's call to improve the IPR environment. Meanwhile, the active user base of Kingsoft Kuaipan, the first initiative of our strategic cloud business, has expanded further topping the list of similar services. We are pleased to announce that Kingsoft's strategy, namely Three Plus One, has taken shape comprising three major existing business lines and one strategic new business line."

Business Review

Entertainment Software Business
The revenue from the entertainment software business for the year of 2012 increased by 23% year-over-year to RMB851.4 million, and revenue for the fourth quarter of 2012 rose 14% quarter-over-quarter and 27% year-over-year to RMB240.6 million. During 2012, the year's largest expansion pack "Nirvana of the Light" for JX Online III, and expansion pack "New JX Online World" for JX Online World were successfully released in November and October respectively, and enjoyed great popularity. Monthly average paying accounts ("APA") of JX Online III has jumped to a new record of more than 0.9 million in December, soaring 104% year-over-year stimulated by continuous optimisation and innovation through expansion packs. The outstanding performance of its current games has demonstrated the Company's capabilities of anticipating gamers' needs and optimising their experiences.

During the year under review, the company launched three main game titles thereby enriching the game portfolio, among which Ma La Jiang Hu, the Company's first Q version of 3D role-playing game, has shown very promising potential since its release in December. Legend of Moon and Legend of Holy World, the other two new titles, also contributed to the solid growth of the fourth quarter and the whole year's revenue.

In the fourth quarter of 2012, daily average peak concurrent users for the Company's online games for increased 4% quarter-over-quarter and decreased 4% year-over-year to 0.63 million. Monthly APA for the Company's online games increased 8% quarter-over-quarter and 24% year-over-year to 1.65 million. The monthly average revenue per paying user for the Company's online games increased 4% quarter-over-quarter and 2% year-over-year to RMB48, primarily attributable to the continuous growth of JX Online III gamers.

Kingsoft Internet Security and Kingsoft WPS Office
Revenue from the application software business for the year of 2012 surged by 67% year-over-year to RMB544.1 million, while revenue from the applications software business for the fourth quarter of 2012 increased by 25% quarter-over-quarter and 109% year-over-year to RMB189.5 million. During the year under review, Kingsoft Internet Security has completed its transformation into an Internet company and scaled new heights in its profitability. Advertising revenue has experienced a soaring triple-digit year-over-year growth, supported by the expanded user base of 150 million and improved profitability. Since the official launch of Cheetah Internet browser in June, its user base has enjoyed tremendous growth due to its stylish design and outstanding user experiences. The creative marketing efforts for Cheetah, such as train ticket purchase applications, have also accelerated the growth of its installed base and its popularity in the market. In addition, benefiting from the rapid growth of the mobile internet and smartphones, the monthly active user base of Kingsoft Mobile Security has rapidly increased to 40.7 million.

Benefitting from the government's continued push for IRP protection and the Company's product innovation, revenue from Kingsoft WPS Office continued its strong growth momentum in 2012 and achieved a new record with sales in Mainland China and Japan exceeding RMB195.8 million. The monthly active users of WPS Personal Edition rose to more than 43.3 million, attracted by the improved user experiences. The number of global monthly active users of WPS Mobile Office exceeded 11.2 million from more than 226 countries and regions, and its application took the top spot in Google Play in the business APPs category across 25 major countries and regions.

As Kingsoft's new strategic business, Kingsoft Cloud was established in early 2012 to capture the opportunities in cloud storage and cloud computing services. The company forged strategic collaboration with Xiaomi, Skyworth TV and AIGO in 2012, in order to take advantage of the strong growth of mobile internet user bases and smart devices in China. As at the end of 2012, total registered users for Kingsoft Cloud expanded further and topped the list of similar services.


Entering 2013, Kingsoft will continue its commitment to enriching the game portfolio and improving gamer experience. JX Online III, as a leading domestic 3D MMO game, will continue its growth momentum, while Ma La Jiang Hu, as a Q version of 3D role playing game, will also be another growth catalyst of the Company's online games in 2013. Two more MMO games, Jiutian Myth and Doomsday Dragon, as well as the web game T3 and mobile game Pet Castle, will be released soon. These focused investments will help the Company capture the growth opportunities of web and mobile game markets in the coming years.

Through product innovation, improving the user experience, and strengthening collaboration with strategic partners, the Company intends to further grow the user base of Kingsoft Internet Security and the Cheetah browser, and expects the revenue from advertising to sustain strong growth momentum. Kingsoft Internet Security would invest heavily in the mobile business and has launched a series of mobile services, targeting at transforming itself into a mobile internet company. Besides, the Company is actively developing other value-added services. Revenue from web games operation is currently in its earliest stage and is expected to be the next growth catalyst in 2013.

WPS Office will focus on expanding enterprise business and new revenue sources. Meanwhile, with its new functions, improved user experiences and expansion into new mobile platforms, WPS Office will further leverage its worldwide mobile user base. In February 2013, WPS Mobile Office for IOS was launched and received positive feedback.

In the future, Kingsoft will continue its investment in the strategic new business line of Kingsoft Cloud, with a strategy to expand the business coverage from personal data storage to enterprise data storage and cloud storage platform services. The Company expects the growth of Kingsoft Cloud's user base to accelerate in 2013, through product innovation as well as the strategic collaboration with Xiaomi and smart TV producers.

Dr HongJiang Zhang, Chief Executive Officer of Kingsoft, concluded, "Looking forward, while maintaining the competitive strengths of the existing business lines, we will continue to invest heavily in the mobile internet business and cloud business, to maintain a fast growth of the Company's top line. We are confident that Kingsoft will bring fruitful results to its investors by focusing on product and service innovation, delivering an exceptional user experience and seizing available market opportunities."

Kingsoft Corporation Limited
Ms. Michelle Feng Harnett 
Tel: +86 10 82325515
Email: ir@kingsoft.com

Topic: Earnings
Source: Kingsoft Corporation Limited

Sectors: Daily Finance, IT Individual, eSports, Gaming
From the Asia Corporate News Network

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