Kingsoft Office(SH:688111)2020-03-24 16:00Financial Performance - The company's operating revenue for 2019 reached RMB 1,579,520,610.25, representing a year-on-year increase of 39.82% compared to RMB 1,129,681,137.76 in 2018[25]. - The net profit attributable to shareholders for 2019 was RMB 400,579,204.93, which is an increase of 28.94% from RMB 310,666,603.13 in the previous year[25]. - The cash flow from operating activities for 2019 amounted to RMB 585,691,496.95, reflecting a growth of 40.08% compared to RMB 418,097,821.34 in 2018[25]. - The total assets of the company as of the end of 2019 were RMB 6,843,993,486.59, a significant increase of 320.55% from RMB 1,627,379,749.43 at the end of 2018[25]. - The net assets attributable to shareholders at the end of 2019 were RMB 6,068,580,258.44, which is a remarkable increase of 411.28% from RMB 1,186,932,796.96 in 2018[25]. - The basic earnings per share for 2019 were RMB 1.09, up 26.74% from RMB 0.86 in 2018[26]. - The diluted earnings per share also stood at RMB 1.09 for 2019, reflecting the same growth rate of 26.74% compared to the previous year[26]. - The weighted average return on equity for 2019 was 22.60%, a decrease of 4.24 percentage points from 26.84% in 2018[26]. - The company achieved a total revenue of 1.58 billion in 2019, with a net profit of 401 million, representing a year-on-year growth of 28.94%[96]. - The office software licensing business generated 496 million, up 39.41% year-on-year, while the office service subscription business grew by 73.06% to 680 million[96]. Research and Development - The total R&D investment for the period amounted to ¥598,785,660.65, representing 37.91% of the company's revenue[79]. - The number of R&D personnel is 1,552, accounting for 68.46% of the total workforce[79]. - The project for enhancing and optimizing office software has a total investment scale of ¥2,197.75 million, with ¥1,093.38 million invested in the current period[79]. - The reliable office platform project has a total investment scale of ¥1,355.30 million, with ¥769.55 million invested in the current period[79]. - The company has achieved significant results in developing WPS office components, enhancing performance and efficiency, and supporting integration on domestic hardware platforms[80]. - The project for the development of a domestic office suite has a total investment scale of ¥4,238.00 million, with ¥202.00 million invested in the current period[81]. - The company is focusing on the integration of intelligent writing technologies and has developed a comprehensive writing service platform[80]. - The total investment in the intelligent writing public service platform project is ¥10,280.00 million, with ¥3,187.88 million invested in the current period[80]. - R&D expenses from 2017 to 2019 were 266.01 million RMB, 427.54 million RMB, and 598.79 million RMB, showing a rapid growth trend, with R&D expenses accounting for 35.31%, 37.85%, and 37.91% of revenue respectively[83]. Market Strategy and Expansion - The company is focused on expanding its market presence and enhancing its product offerings through continuous innovation and development[1]. - Future guidance indicates a commitment to maintaining growth in user engagement and revenue through strategic initiatives and potential acquisitions[1]. - The company aims to enhance its office software performance and efficiency through the development of customized solutions for government applications[76]. - The company plans to expand its market presence and enhance its product offerings in the coming years[36]. - The company aims to enhance its user base in the office application sector by leveraging cloud computing, big data services, and artificial intelligence, enhancing user experience and product offerings[145]. - The company will focus on increasing customer satisfaction and penetration rates among government and large enterprises, while building a comprehensive customer service system[147]. - The company intends to shift its personal value-added services from "tools" to "services," enhancing user engagement through refined operations of membership features and templates[148]. - The company plans to improve its brand influence and market presence by targeting government and leading enterprise clients, while also exploring the small and medium-sized enterprise market[145]. - The company will continue to invest in technology research and development to create high-tech products and office application services, aiming to enhance its core competitiveness[145]. Corporate Governance and Compliance - The company has confirmed that there are no special arrangements regarding corporate governance[10]. - The financial report is declared to be true, accurate, and complete by the responsible executives[9]. - The company has not engaged in any irregular decision-making processes for external guarantees[11]. - The company has not reported any non-operational fund occupation by controlling shareholders or related parties[11]. - The company has outlined specific plans for compliance with these commitments to ensure shareholder confidence[156]. - The company will ensure compliance with relevant laws and regulations regarding related party transactions[159]. - The company aims to avoid related party transactions that could harm the interests of the company and its shareholders[159]. - The company will strictly follow the procedures for related party transactions as per the Company Law and Securities Law of the People's Republic of China[159]. - The company has committed to timely disclosure of information regarding related party transactions[159]. Shareholder Commitments and Stock Management - The company has committed to not transferring or entrusting others to manage its shares for 36 months from the date of its IPO[156]. - If the company's stock price falls below the IPO price for 20 consecutive trading days within six months post-IPO, the lock-up period for shares will automatically extend by six months[156]. - The company agrees to sell shares at a price not lower than 100% of the IPO price during the two years following the lock-up period[156]. - The company will compensate for any losses incurred due to violations of the above commitments[156]. - Major shareholders plan to reduce their holdings after the lock-up period, with a maximum reduction not exceeding the total number of company shares[156]. - The company has established a commitment to maintain share price integrity post-IPO[156]. - The company will adjust the IPO price for any dividends or stock splits accordingly[156]. - The company has a lock-up period of 36 months for shares held by actual controllers, with restrictions on transfer or management delegation during this time[157]. - The company commits to compensating for any losses caused by violations of the share transfer commitments[157]. Product Development and Technology - The company has developed core technologies in data cloud storage, intelligent data processing, and secure cloud documents, enhancing its office security technology level[69]. - The company has implemented a new graphic and text mixing engine that significantly improves the response speed for large document editing, enhancing user experience[70]. - The company’s multi-core and multi-threaded computing engine technology optimizes data processing capabilities, addressing efficiency issues in large document calculations[70]. - The company has developed a cross-platform graphics rendering engine that enhances drawing efficiency and achieves consistent rendering effects across different operating systems[72]. - The cloud storage technology employs AES256 encryption for data security, with all stored data being split into encrypted blocks before upload[72]. - The mobile sharing technology significantly improves the ability to load and process large documents on low-memory devices, facilitating cross-platform data collaboration[72]. - The multi-platform collaborative editing technology supports concurrent editing by multiple users, ensuring consistent performance across different devices and browsers[73]. - The document intelligent beautification technology allows for automatic layout and design adjustments, enhancing the professionalism of user-created documents[73]. - The company’s core technologies have been recognized as domestically leading and internationally advanced, receiving multiple national and international awards[74]. User Engagement and Market Presence - As of December 2019, the company's main products had over 411 million monthly active users (MAU), with WPS Office desktop version accounting for over 154 million MAU, leading other domestic office software[61]. - The mobile version of WPS Office had over 248 million MAU, and other products like Kingsoft Dictionary had nearly 10 million MAU, maintaining a leading position among domestic office software[61]. - The company has been recognized as a "Top Developer" by Google Play, and its mobile version was selected as "Best App of the Year" in 2015, indicating strong market presence and user engagement[62]. - The international business saw rapid growth, with over 100 million monthly active users outside of China by October 2019[107]. - The company launched WPS Office for Mac OS international version in August 2019, receiving recommendations in 9 countries from the Apple Mac Store[107]. Risk Management - The company has outlined various operational risks and corresponding mitigation strategies in the report[7]. - The company emphasizes that forward-looking statements do not constitute substantial commitments to investors, highlighting investment risks[10].