2019-09-10 08:57User Engagement and Growth - As of June 30, 2019, the monthly active users for office software reached 348 million, an increase from 328 million in March 2019 and 310 million in December 2018[8]. - The average daily peak concurrent users for online games was 680,869 as of June 30, 2019, up from 570,694 in March 2019[9]. - The average paying accounts for online games decreased to 2,542,271 as of June 30, 2019, down from 2,369,662 in March 2019[9]. - The number of monthly active users for WPS Office overseas exceeded 80 million in June 2019[14]. Financial Performance - Revenue for the online gaming segment was RMB 569,838 thousand for the three months ended June 30, 2019, compared to RMB 581,882 thousand for the previous quarter[10]. - The total revenue for cloud services was RMB 918,239 thousand for the same period, showing a significant increase from RMB 468,731 thousand in the previous quarter[10]. - The company reported a net loss of RMB 1,548,586 thousand for the three months ended June 30, 2019, compared to a loss of RMB 40,591 thousand in the same period last year[10]. - Basic loss per share attributable to ordinary equity holders of the parent was RMB (1.04) for the period ended June 30, 2019, compared to earnings of RMB 0.07 in the previous year[10]. - For the first half of 2019, Kingsoft's revenue reached RMB 3,600.6 million, representing a year-on-year growth of 38%[13]. - In Q2 2019, Kingsoft's revenue was RMB 1,874.1 million, showing a year-on-year increase of 39% and a quarter-on-quarter increase of 9%[13]. - The cloud services segment experienced a robust growth of 96% year-on-year in Q2 2019[13]. - The office software and services segment also saw a year-on-year growth of 31% in Q2 2019[13]. - Revenue from online gaming for the first half of 2019 was RMB 1,169.5 million, a decline of 4% year-over-year[16]. - Revenue from cloud services for the first half of 2019 was RMB 1,757.5 million, an increase of 98% year-over-year[16]. - Revenue from office software and services for the first half of 2019 was RMB 673.6 million, an increase of 33% year-over-year[16]. Research and Development - Research and development costs amounted to RMB 498,483 thousand for the three months ended June 30, 2019, reflecting the company's commitment to innovation[10]. - The net R&D costs for Q2 2019 were RMB 498.5 million, up 16% year-over-year and 3% quarter-over-quarter, driven by increased investment in technology innovation and enhanced products and services[15]. - The net R&D expenses for the first half of 2019 were RMB 981.5 million, an increase of 21% year-over-year[16]. Operational Challenges - The company recorded an operating loss before share-based compensation costs of RMB 86.0 million in Q2 2019, compared to a profit of RMB 65.2 million in the same period last year[15]. - The company reported a net loss of RMB 1,326.7 million in other losses for Q2 2019, compared to a loss of RMB 73.6 million in the same period last year, primarily due to impairment provisions related to investments[15]. - The company recorded a significant impairment loss of RMB 1,300,000 thousand on investments in associates, which was not present in the previous year[55]. Strategic Initiatives - The company is focusing on expanding its market presence and enhancing its product offerings through ongoing research and development initiatives[10]. - Kingsoft plans to launch new mobile games in the second half of 2019, including "Final Fantasy: Brave Exvius" in China and "Dual Universe" in Japan[13]. - The company aims for steady revenue growth in the second half of 2019, driven by the performance of cloud services and the launch of new mobile games[14]. - The company is actively pursuing mergers and acquisitions to bolster its competitive position in the market[1]. - The company is exploring new strategies to enhance its cloud services and infrastructure offerings, positioning itself for future growth[1]. Shareholder and Governance Information - The company has implemented a share option scheme since December 9, 2011, aimed at providing incentives to eligible participants, including directors and employees[27]. - The company has established a robust governance framework, including an audit committee and a remuneration committee, to oversee its operations[156]. - The company confirmed no other individuals hold 5% or more of the issued shares requiring disclosure under the Securities and Futures Ordinance[38]. - The company expressed gratitude to shareholders and investors for their ongoing support and acknowledges the contributions of all employees to the company's success[44]. Cash Flow and Financial Position - The group recorded a net cash outflow from operating activities of RMB 244.2 million for the first half of 2019, compared to RMB 362.5 million in the same period last year[17]. - The cash and bank deposits held by the group as of June 30, 2019, amounted to RMB 8,980.5 million, representing 48% of total assets[17]. - The group’s debt-to-asset ratio as of June 30, 2019, was 40%, up from 36% as of December 31, 2018[17]. - The company reported a total of 5,316 thousand shares issued, with a share premium of RMB 2,972,969 thousand, consistent with the previous period[52]. Compliance and Reporting Standards - The company is committed to adhering to international financial reporting standards, ensuring transparency and accuracy in its financial reporting[156]. - The interim financial information has been prepared in accordance with International Accounting Standard 34, with no significant issues identified during the review[48]. - The company has confirmed compliance with all applicable provisions of the corporate governance code, except for specific clauses regarding non-executive directors' attendance at shareholder meetings[43].