Kingsoft third quarter profit down 12% to RMB74.9mn

The company in undergoing successful product innovation and business transformation with new management team focusing on long-term strategies.

Kingsoft Corporation Limited ("Kingsoft"), a leading entertainment software, Internet security and application software developer, distributor and service provider in the PRC, announced its unaudited results for the three months ended 30 September 2011.

During the period under review, Kingsoft recorded an increase in both revenue and profit compared with the corresponding period last year. Revenue increased by 6% year-over-year to RMB242.7 million and gross profit increased by 4% year-over-year to RMB205.9 million. Profit attributable to owners of the parent decreased by 12% year-over-year to RMB74.9 million. Selling and distribution expenses decreased by 3% year-over-year to RMB33.6 million during the period under review. As at 30 September 2011, cash and cash equivalent amounted to RMB1.84 billion. Revenue from the entertainment software business and the application software business represented 68% and 32% respectively of total revenue in the third quarter, according to a Kingsoft report.

Dr. Hongjiang Zhang, Chief Executive Officer of Kingsoft, commented, "The past quarter was a challenging one for Kingsoft as we chose to extend the testing cycle of our new games and devote more resources to fine tune our major new game 'Legend of Moon‘, with the target to achieving long-term sustainable growth of new games. The slowdown of new product releases, the adverse impact of summer vacation in China and sizable R&D investments in mobile application only have a short term effect on our revenue and profits during the period."

Looking forward, Mr. Jun Lei, Chairman of Kingsoft concluded, "We are very glad to be able to invite Dr. Hongjiang Zhang and Mr. Shun Tak Wong to join Kingsoft as the Chief Executive Officer and Chief Financial Officer respectively. The new management team shall focus on the long-term strategies in the coming months aiming for innovation and a leap forward in the scale of its business. I believe that we will lead Kingsoft to another new height in the broadened market prospect and bring good returns to our shareholders in the long run."