KINGSOFT(HK:03888)2025-04-16 09:01Financial Performance - In 2024, Kingsoft achieved a total revenue of RMB 10,317.9 million, representing a year-on-year growth of 21%[10]. - Revenue from office software and services reached RMB 5,121.1 million, an increase of 12% compared to the previous year[10]. - Revenue from online games and other businesses surged to RMB 5,196.8 million, marking a significant growth of 31%[10]. - Operating profit for 2024 soared to RMB 3,646.6 million, a remarkable increase of 64%, with an operating margin rising to 35% from 26% in 2023[10]. - The company achieved a net profit of RMB 2,797.1 million for the year, compared to a loss of RMB 5,341.9 million in the previous year[9]. - The gross profit for 2024 was RMB 8,580.5 million, reflecting a 22% increase year-over-year, with a gross margin of 83%[21]. - The profit attributable to the owners of the parent company for 2024 is RMB 1,551.6 million, up from RMB 483.5 million in the previous year[30]. - The profit attributable to the owners of the parent company before share-based payment costs for 2024 is RMB 1,719.6 million, compared to RMB 684.5 million last year[31]. - The net profit margin excluding share-based payment costs for 2024 and 2023 is 17% and 8%, respectively[32]. - The company reported a significant increase in revenue, achieving a total of $1.5 billion for the quarter, representing a 25% year-over-year growth[1]. Research and Development - Research and development costs increased to RMB 3,045.4 million, reflecting the company's commitment to enhancing core capabilities in collaboration and AI[9]. - Research and development costs rose to RMB 3,045.4 million, a 13% increase year-over-year, due to increased staffing and AI-related investments[22]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[5]. - The company aims to deepen the application of AI technology in the office sector and strengthen the capabilities of WPS 365 while expanding globally[12]. Strategic Focus and Market Expansion - Kingsoft's strategic focus includes enhancing its product ecosystem around "multi-screen, cloud, content, collaboration, and AI" to improve market competitiveness[10]. - The company is actively exploring new game categories while deepening its engagement with classic martial arts IPs in the online gaming sector[10]. - The company plans to launch several new games in 2025, including "Jian Xia Qing Yuan: Zero" and a sci-fi mech game "Jie Xian Ji"[12]. - Market expansion plans include entering three new international markets by the end of the fiscal year, targeting a 15% increase in global market share[6]. Corporate Governance - The company is committed to enhancing corporate governance practices to ensure compliance with the applicable codes and regulations[68]. - The board consists of seven members, including one executive director, three non-executive directors, and three independent non-executive directors, ensuring compliance with listing rules[79]. - The board held four meetings and one annual general meeting during the year ending December 31, 2024, with all directors attending all meetings[86]. - The company has established written guidelines to regulate securities trading by employees who may possess unpublished internal information[76]. - The board is responsible for the preparation of financial statements that fairly reflect the group's financial position and performance, ensuring compliance with applicable accounting standards[78]. - The company has implemented a continuous professional development program for all directors to enhance their knowledge and skills[83]. - The board has authorized senior management to conduct daily operations while maintaining oversight of significant decisions affecting the company[77]. - The company has established a board diversity policy, achieving a female representation of 14% on the board and 32% among all employees[90]. Shareholder Communication and Dividends - The proposed final dividend for 2024 is RMB 184.6 million, up from RMB 171.4 million in 2023[9]. - The board considers internal control, risk management, and the company's financial condition when proposing dividends[114]. - Effective communication with shareholders is prioritized, with updates on business operations and financial data available on the company's website[122]. - The company has reviewed its shareholder communication policy and is satisfied with its execution and effectiveness[123]. Employee and Talent Management - The group employed approximately 8,047 full-time employees as of December 31, 2024, up from 7,172 in 2023[144]. - Employee costs, including directors and senior management remuneration, were approximately RMB 4,070.9 million for 2024, compared to RMB 3,765.5 million in 2023[144]. - The company aims to attract, motivate, and retain key talent through a compensation structure that includes base salary, benefits, retirement plans, performance bonuses, and incentive stock options[98]. - The company has established a shorter vesting period for employee participants under the 2024 share plan to enhance flexibility in attracting and retaining talent[99]. Audit and Compliance - The total remuneration paid to the external auditor, Ernst & Young, for audit services was RMB 6.20 million for 2024, down from RMB 6.65 million in 2023, while non-audit services amounted to RMB 2.45 million, compared to RMB 2.60 million in the previous year[111]. - The company’s financial reporting system and internal controls are regularly reviewed for effectiveness and adequacy[96]. - The company has not detected any non-compliance with the established guidelines by employees during the year[76]. Share Option Plans - The 2024 Share Option Plan was approved on May 23, 2024, allowing for the issuance of up to 133,916,711 new shares, which is 10% of the total shares issued as of that date[158]. - The total number of unexercised share rewards under the 2024 Share Option Plan remained at 1,527,400 as of December 31, 2024[159]. - The maximum number of shares that may be issued upon exercise of options under the 2021 Share Option Plan is capped at 10% of the total issued shares as of December 9, 2021, which amounts to 137,020,371 shares[166]. - The company has approved and adopted the 2021, 2022, 2023, and 2024 share incentive plans, with a total of 870,000, 1,000,000, 1,000,000, and 997,000 shares authorized for issuance, respectively, representing approximately 0.19%, 0.22%, 0.22%, and 0.22% of the total issued share capital as of December 31, 2024[178].