Kingsoft Corporation Limited (HKG:3888)
Hong Kong, Aug 25, 2009 AEST (ABN Newswire) - Kingsoft Corporation Limited ("Kingsoft" or the "Company"; HKG:3888), China's leading entertainment and applications software developer, distributor and service provider based on market share, announced its interim results for the six months ended June 30, 2009.
During the period under review, the core business of Kingsoft continued to growth. Revenue increased by 37% year-over-year to RMB476.2 million and profit for the period increased by 88% year-over-year to RMB198.3 million. Gross profit margin increased by two percentage points year-over-year to 88%.
BUSINESS REVIEW
Revenue from entertainment software business and applications software business represented 67% and 32% respectively of total revenue in the first quarter.
Entertainment Software Business
Revenue from the entertainment software business increased by 41% year-over-year to RMB321.1 million. Daily average peak concurrent users increased by 13% year-over-year to 0.95 million in the second quarter of 2009. Monthly average paying users increased by 27% year-over-year to 1.32 million in the second quarter of 2009. The monthly average revenue per paying user ("monthly ARPU") for the Company's MMORPGs increased by 15% year-over-year to RMB39 in the second quarter of 2009.
Kingsoft is committed to expanding its game offerings. The Company launched MAT, its 3D FPS game, in China in March 2009. JX III, the Company's first 3D game, since its close beta testing commenced at the end of 2008, it has been well received by market and has been tested by over 0.8 million gamers in general.
In August 2009, another two new games, the Legend of CQ and the Legend of JX II, started open beta testing.
To expand Kingsoft's game content franchise, Kingsoft formed a strategic alliance with Shanda, a leading online game operator in China, in January 2009. The Company opened its online games, JX Online World and The Legend of JX II, to users of Shanda.
Applications Software Business
Revenue from applications software business increased by 30% year-over-year to RMB150.9 million. The growth was due to the increased SMS and bank card subscribers for online service of Kingsoft Internet Security, and Kingsoft Japan recorded rapid growing revenue from Kingsoft WPS Office and the free-advertisement version of Kingsoft Internet Security.
Monthly ARPU for online services of Kingsoft Internet Security business increased by RMB0.5 year-over-year to RMB2.1 in the second quarter of 2009, due primarily to the increased portion of SMS and bank card subscribers with higher monthly ARPU.
The Company's applications software was well-received among Japanese users. In July 2009, Kingsoft WPS Office was awarded as "Rakuten Most Valuable Professional Office Software in 2009 1H" by Rakuten, the largest e-commerce platform in Japan. To further expand Japan market, Kingsoft PowerWord Japanese Version was launched in March 2009.
In China market, Kingsoft WPS office continued to maintain its leading position. It has been widely adopted by various Chinese government departments, state-owned enterprises and renowned corporations, including China Securities Regulatory Commission, Yunnan-Copper (Group) Limited Company and Bank of Dalian. Since March 2009, Kingsoft WPS Office has been available at Google Pack for Google users to download at free.
Kingsoft Internet Security is another key product of Kingsoft. The Company has introduced a host of measures to expand its customer base and strengthen its functions. Since June 2009, Kingsoft has joined Microsoft Virus Information Alliance, becoming the first Chinese anti-virus software provider in the alliance. The participation will enhance the virus killing capability of Kingsoft Internet Security.
In May 2009, Kingsoft collaborated with PICC Property and Casualty Company Limited to offer Kingsoft Internet Security - Computer Insurance Version, which was one of the first products in China with both computer security and computer insurance functions.
Furthermore, the Company reached a strategic collaboration with 360 Security Center, the largest Internet security website in China in terms of usage, to offer "Kingsoft Internet Security 360 Special Edition" to the users of 360 Security Center.
Financial Highlights------------------------------------------------------RMB'000 For the 6 months ended June 30 Change (Unaudited) (%) 2009 2008------------------------------------------------------Revenue 476,209 346,806 +37Entertainment software 321,055 228,111 +41Applications software 150,899 116,274 +30Others 4,255 2,421 +76------------------------------------------------------Gross profit 417,079 297,667 +40------------------------------------------------------Profit for the period 198,295 105,090 +88------------------------------------------------------Basic EPS (RMB cent) 18.62 10.13 +78------------------------------------------------------Operational Highlights------------------------------------------------------ June 30, March 31, June 30, 2009 2009 2008------------------------------------------------------Online Games------------------------------------------------------Daily Average Peak Concurrent Users 953,817 951,685 846,180------------------------------------------------------Monthly Average Paying users 1,317,755 1,489,797 1,036,692------------------------------------------------------Monthly Average Revenue per Paying User (RMB) 39 36 34------------------------------------------------------Online Services of Internet securities------------------------------------------------------Daily Average Paying Users 8,211,110 8,450,146 8,696,519------------------------------------------------------Monthly Average Revenue per Paying Users (RMB) 2.1 1.9 1.6------------------------------------------------------
OUTLOOK
JX III, the Company's first 3D online game, will start open beta testing on August 28, 2009. We are confident that the game will leverage the growth of 3D game market and expand JX franchise further.
On applications software front, it is in a transit to becoming a software-as-a-service platform. In addition to the growth of online subscription revenue, we expect to see increasing revenue of value added services and advertisement to maintain our long-term sustainable growth.
Contact
Kingsoft Corporation Limited
Michelle Feng Harnett
Tel: (86) 10 82325515
Email:ir@kingsoft.com
Hill and Knowlton (Asia) Limited
Chelsea Ng
Tel: (852) 2894 6240
Email:chelsea.ng@hillandknowlton.com.hk
Tiff Ko
Tel: (852) 2894 6208
Email:tiff.ko@hillandknowlton.com.hk
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