HONG KONG, Nov 24, 2011 - (ACN Newswire) - Kingsoft Corporation Limited ("Kingsoft" or the "Company"; SEHK:3888), a leading entertainment software, Internet security and application software developer, distributor and service provider in the PRC, announced its unaudited results for the three months ended 30 September 2011.
During the period under review, Kingsoft recorded an increase in both revenue and profit compared with the corresponding period last year. Revenue increased by 6% year-over-year to RMB242.7 million and gross profit increased by 4% year-over-year to RMB205.9 million. Profit attributable to owners of the parent decreased by 12% year-over-year to RMB74.9 million. Selling and distribution expenses decreased by 3% year-over-year to RMB33.6 million during the period under review. As at 30 September 2011, cash and cash equivalent amounted to RMB1.84 billion. Revenue from the entertainment software business and the application software business represented 68% and 32% respectively of total revenue in the third quarter.
Dr. Hongjiang Zhang, Chief Executive Officer of Kingsoft, commented, "The past quarter was a challenging one for Kingsoft as we chose to extend the testing cycle of our new games and devote more resources to fine tune our major new game 'Legend of Moon', with the target to achieving long-term sustainable growth of new games. The slowdown of new product releases, the adverse impact of summer vacation in China and sizable R&D investments in mobile application only have a short term effect on our revenue and profits during the period."
FINANCIAL HIGHLIGHTS
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RMB'000 For the 3 months ended Sept 30 Change
(unaudited) 2011 2010 (%)
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Revenue 242,707 229,237 6
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-Entertainment software 165,224 155,203 6
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-Applications software 77,483 74,034 5
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Gross profit 205,937 197,075 4
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Profit Attributable to
Owners of the Parent 74,894 84,990 -12
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Basic Earnings/Share (RMB cents) 6.63 7.76 -15
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OPERATIONAL HIGHLIGHTS
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Sept 30 June 30 Sept 30
2011 2011 2010
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Online Games
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-Daily Av. Peak Concurrent Users 608,607 653,085 773,349
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-Monthly Average Paying Users 1,186,481 1,250,771 1,325,056
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-Monthly Average Revenue per
Paying User(RMB) 46 46 39
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BUSINESS REVIEW
Entertainment Software Business
Revenue from the entertainment software business in the third quarter increased 6% year-over-year to RMB165.2 million. In the third quarter, the company's existing games continued to show relatively stable performance. The release of the expansion pack "New JX Online III" of the 3D MMO JX Online III in May has has been successful and raised the game's user base significantly. To enhance the existing games portfolio, the company has released expansion packs "The Grand Master" of JX Online III and "LMFJ" of JX World Online in November 2011. Limited open beta testing for the new game title "Legend of Moon" was started in September, 2011 and has gained positive feedback from users. To expand the testing, three groups of new servers were added in November. We believe the official launch of the game will drive the revenue growth of the company.
Application Software Business
Revenue from the application software business for the third quarter of 2011 increased 5% year-over-year to RMB77.48 million. Benefiting from the improved copyright protection in China and the Government's support towards domestically produced software, Kingsoft WPS Office continued to receive strong sales orders both from enterprise customers and Government agencies. The mobile versions of Kingsoft WPS Office in Chinese, Japanese and English were issued in September and have received positive feedback from users. With its outstanding quality, WPS Office has accumulated close to ten thousand corporate clients and over 50 million individual users within a short period of a few years. The number of active users of Kingsoft Internet Security has increased significantly since the launch of Kingsoft Antivirus 2012 - the Cheetah Version based on our proprietary 30-core cloud-based engine. The launch of the "Guarantee Indemnity" plan in August provided additional assurance for online e-commerce users.
Mr. Jun Lei, Chairman of Kingsoft, commented, "In consideration of the adverse impact of summer vacation, we are satisfied with the performance of our existing games. The fast growing Kingsoft Internet Security has positioned us as number two in China's consumer PC and internet security market. The performance of Kingsoft WPS has demonstrated the great opportunity of application software market in China and overseas. Taking account of long term interests of shareholders, we shall further focus on our products and make sure major new products are thoroughly tested before they are brought to end users."
Looking forward, Mr. Jun Lei concluded, "We are very glad to be able to invite Dr. Hongjiang Zhang and Mr. Shun Tak Wong to join Kingsoft as the Chief Executive Officer and Chief Financial Officer respectively. The new management team shall focus on the long-term strategies in the coming months aiming for innovation and a leap forward in the scale of its business. I believe that we will lead Kingsoft to another new height in the broadened market prospect and bring good returns to our shareholders in the long run."
Contact:
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
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