2019-04-17 08:37Financial Performance - In 2018, Kingsoft's total revenue from online games was RMB 2,551,715,000, a decrease of 18% compared to RMB 3,120,186,000 in 2017[5]. - The cloud services segment generated revenue of RMB 2,217,507,000, which is an increase of 66% from RMB 1,332,522,000 in 2017[5]. - The total operating profit for 2018 was RMB (302,320,000), compared to RMB 813,912,000 in 2017, indicating a significant decline[5]. - The net profit attributable to the parent company for 2018 was RMB 389,214,000, a decrease from RMB 3,201,837,000 in 2017[5]. - The company reported a basic earnings per share of RMB 0.29 for 2018, down from RMB 2.46 in 2017[5]. - In 2018, total revenue was RMB 5,906.2 million, an increase of 14% compared to the previous year[13]. - Revenue from online games decreased by 18% to RMB 2,551.7 million, primarily due to a decline in existing game revenues[13]. - Cloud services revenue grew by 66% to RMB 2,217.5 million, driven by strong customer usage in mobile video and internet sectors[13]. - The company reported a net loss from continuing operations for the year was RMB 165.2 million, compared to a profit of RMB 778.3 million in the previous year[12]. - The total comprehensive income attributable to equity holders of the parent was RMB 389,214 thousand, compared to RMB 3,201,837 thousand in the previous year, reflecting a significant decline[156]. Assets and Liabilities - Kingsoft's total assets reached RMB 20,049,812,000 by the end of 2018, up from RMB 17,762,390,000 in 2017[6]. - The company's cash and bank deposits amounted to RMB 9,868,809,000 in 2018, reflecting a strong liquidity position[6]. - The company's total liabilities increased to RMB 4,105,973 thousand in 2018 from RMB 3,854,107 thousand in 2017, indicating a rise of about 6.5%[160]. - The company's equity attributable to owners of the parent increased to RMB 13,037,839 thousand in 2018, compared to RMB 12,088,590 thousand in 2017, reflecting a growth of approximately 7.8%[160]. - As of December 31, 2018, the debt-to-asset ratio was 36%, up from 29% at the end of 2017[18]. Research and Development - Kingsoft's research and development expenses for 2018 were RMB 1,838,658,000, which is an increase from RMB 1,446,044,000 in 2017[5]. - Research and development costs increased by 27% to RMB 1,838.7 million, reflecting higher investments in new products and technologies[15]. Corporate Governance - The board consists of eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors, ensuring compliance with the listing rules[25]. - The company has established an audit committee, remuneration committee, and nomination committee to oversee important aspects of its affairs[33]. - The roles of the chairman and CEO are clearly defined and separated to ensure a balance of power and authority[34]. - The company has established a whistleblowing system to detect and prevent fraud against it[35]. - The board held at least four meetings during the year to review the group's financial performance and overall strategy[29]. Shareholder Information - The company did not declare a final dividend for 2018, compared to RMB 122,428,000 in 2017[5]. - As of December 31, 2018, the company had distributable reserves amounting to RMB 3,410.1 million[89]. - The maximum number of shares that may be issued under the 2011 Share Option Scheme is capped at 10% of the total issued shares as of December 9, 2011, with a total of 106,264,893 shares available, representing approximately 7.74% of the issued shares as of the report date[98]. Environmental and Social Responsibility - The group implemented strict customer complaint management mechanisms, categorizing and analyzing complaints to improve service quality[63]. - The group conducted 243 training sessions in 2018, with a total participation of 9,806 employees, achieving full coverage of training for all staff[82]. - The group emphasized community support and charity activities, focusing on education and disaster relief efforts[86]. - The group has a total of 660 suppliers, with 620 based in China and 40 overseas, emphasizing supplier quality and social responsibility[65]. Strategic Initiatives - The company plans to launch a new flagship mobile game in 2019, aiming to enhance user experience and content quality[9]. - The company aims to strengthen its cloud business penetration and enhance customer experience in a competitive market environment[8]. - The company is focusing on enhancing its product offerings and exploring new market opportunities to drive future growth[162]. Compliance and Risk Management - The company has established a comprehensive internal control framework aligned with the COSO framework to enhance governance and risk management[42]. - The board of directors is responsible for overseeing the company's risk management and ensuring that all business functions identify and assess significant risks[43]. - The company has implemented a framework for handling and disclosing insider information, ensuring compliance with relevant regulations[44]. Financial Reporting Standards - The financial statements are prepared in accordance with International Financial Reporting Standards and presented in RMB[176]. - The company adopted several new and revised International Financial Reporting Standards (IFRS) during the year, including IFRS 9 on financial instruments, which replaced IAS 39[178]. - The company will apply the transitional provisions of IFRS 16 to recognize the cumulative effect of initial adoption as an adjustment to the opening balance of retained earnings[197].