Kingsoft Corporation Limited (HKG:3888)
China, as the nation with the most internet users in the world (currently there are 298 million internet users in China compared to 220 million in USA), still have plenty of opportunity for growth as the market penetration of internet usage stand at only 22% in comparison to its mass 1.32 billion population. As the China nationals' income level rises, more people are expected to persuade online entertainment and application usage. These combine to create a very favourable business condition for Kingsoft operation.
Kingsoft specialises in online games and application software development. In FY2008, the company employed over 1300 people in their R&D team. The company generated about 67% of its revenue from online gaming and 32% from sales of application softwares.
Kevin said that the significant increase of the company revenue in 2008 was largely due to their online games popularity built over the years. Currently, the company has 8 online games. One of the most popular online games is called the JX series, a multi players RPG base on a story plot in ancient China. The launch of JX World in 2008 was proven to be a successful hit and saw the number of subscribers nearly double after its release. Like most RPG game, customers are highly loyal to their game and tend to refer their friends to join. The company is expected to roll out the JX-3 series together with approximately 5 to 6 new online games over 2009 in which Kevin pointed out will bring the number of subscribers and revenue to a new level in 2009. On average, there are 800 thousands daily peak concurrent players on their JX platform in the last quarter 2008.
As technology advances and internet speed increases, the company is in a position to offer the market an even more dynamic internet gaming experience. For instance, they have recently launched a 3D shooting game MAT to cater for a different market in the gaming industry.
The second stream of income comes from their application software development and sales. In FY 2008 the company has formed strategic partnership with Microsoft MSN in developing internet base antivirus software for the mass MSN users base in China. Other than Internet Security, the company translation software is also ranked no 1 in term of popularity in China. In FY 2008, the company has also developed an online translation software with Google in providing translation service to Google users. The company also operate its own language learning website www.iciba.com, according to Alexa, it is currently ranked as the no 1 website in term of daily traffic in this segment in China.
The China government also encourage local software development. The company has co-authorised the file format standard used among various Chinese government departments. The company expects sales of their application software -WPS Office will increase as more government departments will adopt this format standard gradually.
The China market is strong and growing, it is evidenced that internet usage rise by 37% per year and GDP also grows at a rate of 9% per year on average. Kingsoft is well into a position to cater for more growth and development in FY 2009 and beyond.
About Mr Kevin Donghui Wang
Donghui WANG (Kevin), aged 37, is currently the Kingsoft chief financial officer. Mr. Wang received a bachelor's degree in engineering from Tianjin Polytechnic University in 1992 and a MBA degree from Victoria University of Technology, Australia in 1997. Mr. Wang worked at Ernst & Young Beijing from 1997 to 1999 as a senior accountant. From 1999 to 2005, Mr. Wang served as a consultant in the PricewaterhouseCoopers Sydney office and a senior manager in their Beijing office. Mr. Wang joined the company at the beginning of 2005 as a vice president and was appointed as the company chief financial officer in December 2005. Mr. Wang became Senior Vice President of the company in December, 2007. And he has been an executive director of Kingsoft since May, 2008.
About Kingsoft Corporation Limited
Following the commercial launch of its first office applications software WPS 1.0 in 1989, Kingsoft Corporation Limited has now become a leading entertainment and applications software developer, distributor and service provider in China, based on market share. The Company leverages its comprehensive software development platform to offer a wide range of innovative entertainment and applications software.
Kingsoft has several well-known products such as WPS Office, Kingsoft PowerWord, Kingsoft Internet Security, and online games such as the JX Series and The First Myth. In addition, the Company sells various products such as Kingsoft Internet Security and Kingsoft PowerWord to retail consumers, corporate organizations and government agencies in China using online and offline distribution channels.
With its headquarters in Beijing, Kingsoft has multiple research and development centers based in Zhuhai, Beijing, Chengdu, Dalian and Shenzhen. The Company's vision is to create world-class software products that run on every computer. The Company's strategy is to enhance its position as a leading entertainment and application software developer, operator and distributor in China and to expand its presence in certain oversea markets.
Kingsoft Corporation Limited