Summary of Kingsoft's Conference Call Company Overview - **Company**: Kingsoft Corporation - **Date of Call**: March 25, 2026 Key Points Industry and Strategic Adjustments - Kingsoft's gaming division, Xishanju, is pivoting towards an AI-based creation platform to disrupt traditional content models, emphasizing creative value and internal project commercialization [3][4] - The company plans to increase investment in foundational gaming projects while scaling back non-strategic initiatives to reallocate resources towards long-term strategic value [4] AI Implementation and Growth - The full-scale implementation of AI is seen as a transformative change, expected to unlock significantly higher production efficiency [4] - Kingsoft's AI product center is transitioning from broad exploration in 2025 to focused execution in 2026, concentrating on 1-2 specific domains [3][7] Gaming Performance - The game "Goose Goose Duck" has achieved over 30 million new users since its launch on January 7, 2026, with 3 million daily active users [5] - The strategy prioritizes user growth and overseas expansion over immediate monetization, with plans for version updates to further increase DAU [5][6] AI in Office Software - Kingsoft Office is transitioning from "Office AI" to "AI Office," with a focus on native AI experiences, evidenced by a 307% year-on-year growth in WPS AI members in 2025 [8][9] - The integration of Xiaomi's MiLM-2.0 model is a core component of Kingsoft's strategy, enhancing the competitive advantage in the AI ecosystem [8][9] Financial Outlook and Expense Management - The expense strategy for 2026 aims to balance AI-native R&D and WPS 365 enterprise expansion while managing marketing expenses dynamically based on game launch schedules and ROI [10] Additional Insights - The company views the recent challenges in 2025 as an opportunity for transformative change in content creation [4] - Future monetization plans for "Goose Goose Duck" will focus on building a stable user base before exploring commercialization [5][6]

Core Insights - Kingsoft Software's 2025 annual report shows a total revenue of 9.683 billion RMB, a 6% decline year-on-year, while net profit attributable to shareholders increased by 29% to 2.004 billion RMB, largely due to gains from the sale of an associate company [1][2] Revenue Breakdown - The revenue from office software and services reached 5.928 billion RMB, a 15.78% increase year-on-year, accounting for approximately 61% of total revenue [3] - Revenue from online games and other segments fell by 27.77% to 3.754 billion RMB, making up about 39% of total revenue [3] Game Business Performance - The game business experienced a significant decline, with the fourth quarter alone recording a revenue drop of 33% year-on-year to 868 million RMB [3] - The decline in game revenue is attributed to decreased earnings from existing games and a high base from the previous year [3] Key Game Titles and Developments - The "Jian Xia Qian Ren" series, a flagship IP for the company, has shown declining performance as it enters its 16th year [3] - The sci-fi mech game "Jie Xian Ji," developed over nearly a decade, has underperformed since its launch, with peak online users dropping from 132,800 to under 1,000 shortly after release [4] Marketing and Expenditure - Marketing expenses for "Jie Xian Ji" reached 564 million RMB in the launch quarter, a 55% increase year-on-year, contributing to a total sales and distribution expense of 1.791 billion RMB for the year, up 33% [4] Strategic Shifts - Kingsoft Software's CEO acknowledged the underperformance of "Jie Xian Ji" and existing games, suggesting a potential shift in strategy [5] - The success of the social deduction mobile game "Goose Duck" indicates a possible strategic pivot within the company, although its long-term sustainability remains uncertain [5] Controversies and Challenges - The game "Chen Bai Jin Qu" faced backlash over its content and partnership with China Post, highlighting ongoing challenges in the gaming sector [6]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因依賴該等內容而引致之任何損失承擔任 何責任。 Kingsoft Corporation Limited 金山軟件有限公司 （於開曼群島持續經營的有限公司） （股份代號：03888） 董事名單與其角色和職能 金山軟件有限公司董事會（「董事會」）成員載列如下。 非執行董事、董事會主席 雷軍 執行董事、首席執行官 鄒濤 非執行董事 求伯君 姚磊文 獨立非執行董事 武文潔 陳作濤 杜博 1 附註： C 有關委員會的主席 M 有關委員會的成員 香港，二零二六年三月二十六日 2 董事會設立4個委員會。下表提供各董事會成員在這些委員會中所擔任的職位。 委員會 董事 提名委員會 薪酬委員會 審核委員會 環境、社會及 管治委員會 雷軍 C M 鄒濤 M 求伯君 姚磊文 M 武文潔 M M C M 陳作濤 M C M C 杜博 M M M M ...

Group 1 - The core point of the article is the announcement of changes in the board of directors at Kingsoft Corporation (03888.HK) [1] - Wang Shunde has submitted his resignation as an independent non-executive director, chairman of the nomination and remuneration committees, and a member of the audit and environmental, social, and governance committees, effective March 26, 2026 [1] - Du Bo has been appointed as an independent non-executive director and a member of the nomination, remuneration, audit, and environmental, social, and governance committees, effective March 26, 2026 [1]

Group 1 - The company announced the resignation of Mr. Wang Shunde as an independent non-executive director, effective from March 26, 2026, due to personal work matters [1] - Mr. Du Bo has been appointed as an independent non-executive director and member of the nomination committee, remuneration committee, audit committee, and environmental, social, and governance committee, effective from March 26, 2026 [1] - Mr. Lei Jun has been appointed as the chairman of the nomination committee, and Mr. Chen Zuotao has been appointed as the chairman of the remuneration committee and a member of the nomination committee, both effective from March 26, 2026 [1]

Kingsoft Corporation Limited 金山軟件有限公司 （於開曼群島持續經營的有限公司） （股份代號：03888） 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因依賴該等內容而引致之任何損失承擔任 何責任。 董事會進一步宣佈，杜博先生（「杜先生」）已獲委任為獨立非執行董事兼提名委員會、薪 酬委員會、審核委員會以及環境、社會及管治委員會成員，自二零二六年三月二十六日 起生效。 杜博先生，42歲，為獨立非執行董事。杜先生為武漢大學弘毅特聘教授、博士生導師， 現任武漢大學發展規劃與學科建設辦公室主任、國家多媒體軟件工程技術研究中心主 任、武漢大學人工智能研究院常務副院長，以及多媒體網絡通信工程湖北省重點實驗室 主任。杜先生的研究方向涵蓋人工智能、計算機視覺、大模型、醫學圖像處理等領域。 近五年發表IEEE Transactions及CCF A類論文110餘篇，Google Scholar引用42,000餘次，ESI 熱點╱高被引論文50篇。 1 杜先生主持國家重點研發計劃項目、國 ...

Core Viewpoint - The era of reckless growth in China's technology industry is coming to an end, with a shift towards valuing "current certainty" over "future possibilities" as the market undergoes structural adjustments [1][2]. Group 1: Company Performance - In Q4 2025, Kingsoft reported revenue of 2.618 billion yuan, a year-on-year decline of 6%. However, the revenue from office software and services reached 1.75 billion yuan, growing by 17% and accounting for 67% of total revenue, indicating a significant shift in the company's growth engine from volatile gaming to more stable office software [5][6]. - The decline in gaming revenue is attributed to a cyclical downturn in the industry, with increased competition from short video platforms and a lack of new hit games. This reflects a necessary transition as the company moves away from reliance on its gaming business [7]. - The growth in office software is driven by user expansion and improved conversion rates, particularly in the context of digitalization and AI integration. The monthly active devices for WPS continue to rise, and the conversion rate from personal to premium memberships is increasing [7][8]. Group 2: Profitability and Cash Flow - Kingsoft's profitability has historically been volatile, heavily reliant on the gaming cycle. However, as the share of office software increases, the business model is shifting towards a subscription model, which offers more stable and predictable cash flow [9][10]. - The current profit performance may not be the most critical indicator; rather, the composition of profits is essential. If profit growth stems from high-margin business increases, it could lead to a revaluation of the company [10][11]. - Kingsoft's operating cash flow remains healthy, allowing the company to maintain high R&D investments even during downturns in the gaming sector. This ability to invest counter-cyclically is crucial for navigating market fluctuations [11]. Group 3: Market Valuation and Expectations - The core contradiction in Kingsoft's recent financial report is that while revenue is declining, the quality of growth is improving. The market's valuation of Kingsoft has been anchored to gaming company metrics, but as the business structure changes, a shift towards software subscription company valuations may present a revaluation opportunity [13][15]. - Key variables to monitor include the continued improvement of average revenue per user (ARPU) in office software and the integration of AI capabilities into the product suite, which could drive new revenue streams [13][14]. - Kingsoft's transition from a high-volatility industry to a more stable but competitive sector reflects a strategic choice that may lead to long-term benefits, despite short-term challenges [15][17].

Market Overview - The A-share market experienced an overall adjustment on March 26, with major indices declining slightly. The Shanghai Composite Index fell by 0.58%, the Shenzhen Component Index by 0.38%, the ChiNext Index by 0.07%, and the Sci-Tech Innovation Index by 0.96% [4] - The Hong Kong stock market also saw a decline, with the Hang Seng Index dropping below the 25,000-point mark, experiencing a decline of over 1% [11] Active Sectors - The lithium mining and electric power sectors were notably active during the morning session of the A-share market, standing out as key highlights [2][4] - In the electric power sector, Huadian Liaoning Energy (600396) achieved a consecutive nine trading days of涨停 (trading limit up), along with nearly ten other stocks such as Huitian Thermal Power and Guangxi Energy also hitting涨停 [6] - The lithium mining sector saw significant gains, with Rongjie Co. hitting涨停 for the third consecutive trading day. Other lithium stocks like Zhongmin Resources and Shengxin Lithium Energy rose by over 6% [8] Notable Stock Performances - In the A-share market, the non-bank financial sector led the decline, with a drop of over 2%. Stocks such as China Life and Ruida Futures saw declines of over 5% and nearly 6%, respectively [4] - The environmental protection sector also faced declines, with a drop close to 2%. Notable declines included Xuelang Environment down by 12.01% and Haixia Environmental hitting the limit down [5] - In the Hong Kong market, Kuaishou-W led the decline among Hang Seng Index constituents, with a drop of over 13% following its earnings announcement [11] Earnings Announcements - Kuaishou reported a total revenue of RMB 142.8 billion for 2025, reflecting a year-on-year growth of 12.5%, and an adjusted net profit of RMB 20.6 billion, up 16.5% [11] - Bubble Mart's 2025 financial report indicated a revenue of RMB 37.12 billion, a significant year-on-year increase of 184.7%, and an adjusted net profit of RMB 13.08 billion, up 284.5% [12] - Kingsoft's 2025 revenue was RMB 9.683 billion, a decrease of 6% from the previous year, with its office software and services contributing 61% to total revenue [14]

Core Viewpoint - Kingsoft Software's stock rose over 8% following the release of its annual performance report, indicating positive market reaction despite a decline in overall revenue [1][5]. Financial Performance - The company reported revenue of RMB 9.683 billion for the year ending December 31, 2025, a decrease of 6% year-on-year [1][5]. - Net profit attributable to shareholders was RMB 2.004 billion, reflecting a 29% increase year-on-year [1][5]. - Basic earnings per share were RMB 1.46, with a proposed final dividend of HKD 0.13 per share [1][5]. Business Segment Performance - Revenue from the office software and services segment reached RMB 5.929 billion, representing a 16% increase compared to the previous year [1][5]. - The growth in WPS personal business was driven by an increase in paying users, supported by upgrades in WPS AI, enhancing the smart office experience [1][5]. - Significant growth in WPS 365 business was attributed to deeper integration of document, AI, and collaboration capabilities, along with accelerated customer expansion among private enterprises and local state-owned enterprises [1][5]. - The growth in WPS software business was primarily driven by an increase in government and enterprise orders [1][5].

Core Viewpoint - Kingsoft Software (03888) reported a mixed financial performance for the year ending December 31, 2025, with a revenue decline but an increase in net profit, leading to a positive market reaction with a stock price increase of over 4% following the earnings release [1] Financial Performance - The company achieved a revenue of RMB 9.683 billion, representing a year-on-year decrease of 6% [1] - Net profit attributable to shareholders increased by 29% to RMB 2.004 billion [1] - Basic earnings per share were reported at RMB 1.46, with a proposed final dividend of HKD 0.13 per share [1] Business Segments - The office software and services segment generated revenue of RMB 5.929 billion, reflecting a year-on-year growth of 16% [1] - The growth in WPS personal business was driven by an increase in paying users, supported by upgrades in WPS AI, enhancing the smart office experience [1] - Significant growth in WPS 365 business was attributed to the deep integration of document, AI, and collaboration capabilities, as well as accelerated customer expansion among private enterprises and local state-owned enterprises [1] - The growth in WPS software business was primarily driven by an increase in government and enterprise orders [1]