Kingsoft seeks funds. The capital will be used to upgrade WPS Office. Now a new PRC giant tech joints Shanghai new Nasdaq-style board
Kingsoft is a Chinese software company that has its research and development locations in Beijing, Chengdu, Dalian, and Zhuhai. The company, Microsoft’s Chinese rival, has recently filed its IPO documentation for an initial public offering on the Chinese stock board. With this transaction, according to the prospectus, the Chinese company plans to raise 2.15 billion RMB (about $ 300 million), with at least 101 million shares, equal to 21.91% of the total issued.
While China has some of the world’s biggest technology companies, many are listed in the US and Hong Kong. As Chinese President announced last year in November, Shanghai new Nasdaq-style tech board could be launched at the beginning of June. China is ready to be a game-changer in stock-market sector and Shanghai board main target is to compete with New York and Hong Kong while Beijing is aiming to boost funding for its hi-tech pupils.
The new tech boardalready listed severals companies based in Jiangsu, Hubei, Shandong, Zhejiang, Guangdong provinces and Shanghai.
What’s the plan? The “Science and Technology Innovation Board” is a key initiative by PRC to provide domestic funding support to Chinese hi-tech and innovative start-ups, allowing “New Made in China” products to compete on a global level in areas such as microchips, self driving cars and automation. But the new hi-tech board is clear response to investors – both Chinese and foreigners – to a better environment of Chinese stock market.
With the new funds, the WPS Office package – a free alternative to the Microsoft Office suite – will see several software updates. In addition, the funds will be used for research in artificial intelligence, as well as for research and development of cloud-based office services.
WPS is widely used by Chinese government agencies and the company also offers free versions, supported by PC advertising
To understand the spread of WPS Office, just think that the company said that over 70 central departments, including the foreign ministry and over two thirds of municipal government agencies, are on the list of paying customers. Also state-owned enterprises, such as the Industrial and Commercial Bank (ICBC) and the State Grid Corporation, are on this list.
Among the main customers of the IPO repository, it is possible to find Alibaba with RMB 157 million in subscriptions in 2018. Tencent, on the other hand, spent RMB 20.5 million on season tickets in 2018, making it the fifth largest customer.
Kingsoft reported revenues of 1.13 billion RMB in 2018, an increase of 50% compared to the 753 million RMB of the previous year. Net profit grew 45% year-on-year to RMB 311 million in 2018 with 86.7% of the gross margin.
Founded in 1988 by Qiu Bojun, one of the country’s first programmers, the company is now controlled by Lei Jun, which holds a 12.0% share. She joined the Beijing-based company in 1992 as an engineer and took over the chairmanship of the board in 2011, a year after founding the smartphone company Xiaomi.
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