HONG KONG, Aug 25, 2010 - (ACN Newswire) - Kingsoft Corporation Limited ("Kingsoft" or the "Company"; SEHK stock code: 03888), a leading application and entertainment software developer, distributor and service provider in China, announced its unaudited interim results for the six months ended June 30, 2010.
During the period under review, Kingsoft recorded continuous growth in both revenue and gross profit compared with the corresponding period last year. Revenue and gross profit both increased by 3% year-over-year to RMB 492.0 million and RMB 429.8 million, respectively.
BUSINESS REVIEW
Revenue from the entertainment and application software business represented 65% and 34% respectively of the total revenue in the first half of 2010.
Entertainment Software Business
Revenue from the entertainment software business held flat year-over-year to RMB 320.7 million. Daily average peak concurrent users decreased 14% year-over-year to 0.82 million in the second quarter of 2010. Monthly average paying users declined 3% year-over-year to 1.28 million in the second quarter of 2010. The decrease in gamer traffic and paying player base was mainly caused by the underperformance of the Company's online games in the overseas markets, particularly in Vietnam. The monthly average revenue per paying user ("monthly ARPU") for the Company's online games increased 5% year-over-year to RMB 41 in the second quarter of 2010.
The Company has been diligently fulfilling its plan to launch new titles in 2010. The testing for new games has proceeded in line with the Company's product development schedule. In June, "Cang Jian Shan Zhuang", the new expansion pack for JX Online III has been launched. The Legend of Moon, the Company's 2.5D online game, has completed two rounds of closed beta testing. The First Myth III is currently in the final round of closed beta testing and is well received by players.
Kingsoft has always valued the cultivation of new generations of users. Since 2010, Kingsoft has implemented various strategies to diversify its user base. Earlier in May, Kingsoft announced an investment in the TV program named after its online game, "JX - Cang Jian Shan Zhuang", with famous artists of EEG, Mr. Nicholas Tse and Ms. Charlene Choi, as the lead actor and actress. In July, Kingsoft collaborated with 7K7K, a leisure online game platform, to jointly operate CQ, which allows Kingsoft to explore market of the post-90s. Besides, Kingsoft's first web-game Shen Dao Xing 8 Ke, which is tailor-made for the post-90s, has commenced closed beta testing.
Application Software Business
Revenue from the application software business increased 11% year-over-year to RMB 168.1 million. The increase was primarily attributable to the rapid sales growth of Kingsoft WPS Office both in Chinese and Japanese market.
Daily average paying users for online services of Kingsoft Internet Security decreased 7% year-over-year to 7.65 million, largely due to the decline in the number of paying users acquired from the original equipment manufacturers. Monthly ARPU for online service of Kingsoft Internet Security business increased 5% year-over-year to RMB 2.2, reflecting the growing proportion of SMS and bank card subscribers with higher monthly ARPU.
The Company has marched a big step forward in expanding its application software business. WPS Office Japanese Version has recorded strong growth in sales volume, currently ranks the second in market share, after Microsoft in Japan. In addition, Kingsoft Office 2010 Traditional Chinese Edition has been recently launched in Taiwan. The rapid growth of Kingsoft's application software business in Japan has continuously contributed to the increase of Kingsoft's revenue, which shows the market leadership of Kingsoft Office software in Japan and underscores the potential of overseas market.
On the other hand, WPS Office has been collectively procured in June by tens of state-owned enterprises (SOEs) including China Southern Power Grid, Angang Steel Group, Baogang Steel Group, China Southern Airlines, etc. The collective purchase shows SOEs' high acceptance of our product and the Kingsoft brand. Enterprise sales also contributed greatly to the increase of the Company's revenue in application software business. To further expand the user group and explore new business opportunities, the Company has started an alpha test on the Internet office automation product of WPS Office - Kuai Pan.
OUTLOOK
To remain competitive and achieve higher game success rate, Kingsoft has been undertaking measures to improve studio and game operation efficiency, along with stringent company-wide cost cutting. In the second half year of 2010, the Company plans to launch the First Myth III, DUGUJIUJIAN and the Legend of Moon, a new sequel of JX franchise.
On application software front, Kingsoft Defender, the Company's new free-based Internet security suite, has recorded rapid growth since launched on March 6, 2010. Riding on Kingsoft's leading technology and reputation in professional Internet security software, Kingsoft Defender will help the Company to capture a larger customer base and to facilitate healthy competition in free anti-virus software market. In addition, the Company is preparing to introduce a number of value-added-services to the new version of Kingsoft Internet Security to further enhance user experience.
Mr. Pak Kwan Kau, Chairman and CEO of Kingsoft, said, "In view of weak online game growth in the industry, we are vigilant in monitoring industry trend and strive to achieve game operation efficiency. Meanwhile, we are actively pursuing collaboration with industry players to enlarge our customer base and to add new dimensions to the Kingsoft brand. In the application software business, with better protection of copyright in China, we are confident about the prospects of WPS Office. The Company will continue to enrich its product portfolio, strengthen its leading position, and bring rewarding returns to shareholders."
CONFERENCE CALL
Kingsoft will announce its 2010 Second Quarter and Interim Results and host a conference call and live webcast at 7:00pm Hong Kong Time (7:00AM East State Time) on 25 August 2010 (Wed). Details are as below:
Speakers: Mr. Pak Kwan KAU, Chairman & Chief Executive Officer
Mr. Kevin WANG, Executive Director & Chief Financial Officer
You may access the teleconference with the following dial in infor-
mation or webcast link:
Webcast (Live & Replay)
http://ir.kingsoft.com/phoenix.zhtml?c=189890&p=irol-IRHome
;
Dial in details: Participant Passcode 49697138
For Hong Kong HK Dial In # +852.3002.1672
For the US US Toll Free Dial In # +1.866.700.7173
US (Int.) Toll Dial In # +1.617.213.8838
For China China Toll Free Dial In
# 10.800.130.0399 (South China Telecom)
# 10.800.152.1490 (North China Telecom)
# 10.800.852.1490 (South China Netcom)
A replay of the conference call can be accessed by dialing US Toll Free Dial In # +1-888-286-8010, US (Int.) Toll Dial In # +1-617-801-6888, passcode is 93196313. The replay will be available from 25 August 2010 10:00 AM EST (25 August 2010 10:00PM HKT), and will be available until 1 September 2010.
FINANCIAL HIGHLIGHTS
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(RMB'000) For the six months ended June 30 Change(%)
2010 2009
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Revenue 492,012 476,209 3
- Entertainment software 320,666 321,055 0
- Application software 168,137 150,899 11
- Others 3,209 4,255 -25
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Gross profit 429,811 417,079 3
Profit for the period 158,018 198,295 -20
Basic EPS (RMB cent) 14.47 18.62 -22
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OPERATIONAL HIGHLIGHTS
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For the three months ended
June 30, 2010 March 31, 2010 June 30, 2009
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Online Games
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Daily Average Peak
Concurrent Users ("DAPCU") 819,325 915,212 953,817
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Monthly Average
Paying Users 1,276,351 1,457,101 1,317,755
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Monthly Average Revenue
per Paying User (RMB) 41 36 39
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Online Services of Internet Securities
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Daily Average
Paying Users 7,648,623 8,416,136 8,211,110
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Monthly Average Revenue
per Paying User (RMB) 2.2 2.0 2.1
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Contact:
Kingsoft Corporation Limited
Ms. Michelle Feng Harnett
Tel: +86 10 82325515
Email: ir@kingsoft.com
Ms. Claire Lee
Tel: +86 10 82334488 - 5850
Email: limiao@kingsoft.com
Topic: Earnings
Source: Kingsoft Corporation Limited
Sectors: Daily Finance, IT Individual, eSports, Gaming
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