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Tuesday, 19 May 2015, 19:16 HKT/SGT
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Source: Kingsoft Corporation Limited
Kingsoft Announces 2015 First Quarter Results
Strong Growth Momentum Continued in Mobile and Cloud Services

HONG KONG, May 19, 2015 - (ACN Newswire) - Kingsoft Corporation Limited ("Kingsoft" or the "Company;" HKSE stock code: 3888), a leading Chinese software and Internet service company, has announced its unaudited quarterly results for the three months ended 31 March 2015.

During the period under review, the revenue of Kingsoft increased by 4% quarter-over-quarter and 64% year-over-year to RMB1,109.4 million. Revenue from the online game, Cheetah Mobile, and office software and others businesses represented 29%, 58% and 13%, respectively, of the total revenue. Gross profit increased by 5% quarter-over-quarter and 56% year-over-year to RMB885.6 million. Profit attributable to owners of the parent decreased 34% quarter-over-quarter and 53% year-over-year to RMB114.5 million.

Mr. Jun Lei, Chairman of Kingsoft, commented, "The achievements of our business lines in the first quarter demonstrated a good start of the effective execution of our mobile transformation, globalization and 'All in Cloud' strategies in 2015. Our total mobile MAU reached a new record of 535.7 million with over 66% from the overseas markets in March 2015. In the first quarter of 2015, 55% of Cheetah Mobile's revenue was generated from the mobile services. The daily average upload data onto our storage services soared to approximately 296 terabyte in March 2015, compared to 122 terabyte a year ago. As the user traffic are migrating fast to mobile internet worldwide and cloud services has become mainstream and experienced explosive growth in China, I believe that Kingsoft will manifest successful mobile transformation and establish new milestones in cloud services in 2015."

Dr. Hong Jiang Zhang, Chief Executive Officer of Kingsoft, said, "We are pleased to have delivered another quarter of solid revenue growth. We believe our proactive investments in mobile transformation, globalization and cloud businesses are necessary to trade off short term profits to capture the vast growth opportunities in the long term, even though it would further adversely impact our profitability in the coming quarters. We are glad with our progress thus far, particularly the outstanding performance of the Cheetah Mobile and Kingsoft Cloud businesses."

BUSINESS REVIEW

Online Games Business
For the first quarter of 2015, the revenue from the online game business decreased 6% quarter-over-quarter and increased 10% year-over-year to RMB324.9 million. The quarter-over-quarter decrease was largely due to decline in revenue from the existing games, though partially offset by the continuous revenue growth from JX Online III. The year-over-year increase was primarily attributable to the notable and sustainable growth of JX Online III with continuous improvements in game experiences. Monthly APA for the Company's online games increased 13% quarter-over quarter and 56% year-over-year to 3.07 million, and this primarily reflected an ongoing increase in JX Online III users. The monthly ARPU for the Company's online games decreased 15% quarter-over-quarter and 31% year-over-year to RMB33, and this was mainly attributable to the increasing proportion of JX Online III in total game revenues.

Currently there are several flagship mobile game projects under development and some of them will be launched in this year. In April 2015, the Company has acquired the exclusive intellectual property right to use the content of a popular movie, "Journey to the West: Conquering the Demons" in mobile games, which are expected to be launched in the coming June.

Cheetah Mobile
In the first quarter of 2015, the revenue from Cheetah Mobile increased 11% quarter-over-quarter and soared 121% year-over-year to RMB646.6 million. The increase was primarily due to the outstanding performance of mobile advertising business driven by the strong demand in both the domestic and overseas markets. It was also attributable to the rapid growth of the worldwide mobile advertising market.

Cheetah Mobile's mobile business continued to enjoy tremendous momentum during the first quarter of 2015. Mobile revenues increased 584% year-over-year and now accounts for 55% of Cheetah Mobile's total revenues, with overseas contributing 38% of total revenues and 70% of mobile revenues in the quarter. Mobile MAUs of Cheetah Mobile grew nearly 100% year-over-year to 443.6 million in March 2015. Five of Cheetah Mobile's apps were among the top 40 non-game apps on Google Play in March 2015 and Cheetah Mobile remained the top publisher in tools category on Google Play.

During the quarter, Cheetah Mobile has further expanded its partnerships with leading mobile advertising networks worldwide and made strategic investments and acquisitions of key mobile advertising assets. As Cheetah Mobile continues towards its strategic goal to be among the top three global mobile advertising platforms, it will continue to execute on its investment plan to attract more mobile users, further strengthen its capabilities in big data analytics and improve its mobile advertising technology and platform.

Office Software and Others
For the first quarter of 2015, the revenue from the office software and other business decreased 4% quarter-over-quarter and increased 57% year-over-year to RMB137.9 million. The quarter-over-quarter decrease was primarily due to a seasonal adverse impact on revenue from WPS Office in the first quarter. Nevertheless, the global mobile MAU of WPS family increased 75% year-over-year to 92.1 million. Kingsoft WPS has established a strategic cooperation with Kingdee in the first quarter. In May 2015, WPS Enterprise Mail was launched, adding a key function to the enterprise WPS productivity suite, to enhance the email experience for WPS users.

The year-over-year increase in office software and other business revenue was primarily attributable to the significant ramp-up of revenue contribution from Kingsoft Cloud, driven by rapidly growing demand for cloud storage and cloud computing services from the expanding user base. In the first quarter of 2015, the Company continued to provide efficient cloud storage services to Xiaomi and also extended its service capabilities to healthcare and financial service businesses. For cloud computing services, the Company continued to expand its market share in mobile game platform market, and also extended to other non-game industries, such as intelligent hardware and mobile internet businesses.

"We had an impressive and promising start to 2015 and focused our investment in mobile internet business and enterprise cloud services. With the robust mobile monetization growth momentum of Cheetah Mobile, continued steady growth of JX Online III, a number of flagship mobile games in pipeline, consistent expansion of mobile WPS user base, and solid growth momentum of cloud services, we are in a great position to continue making strong progress in all our priorities in execution on the mobile internet and cloud strategies." concluded Mr. Jun Lei.

Contact:
Kingsoft Corporation Limited
Ms. Ou Lu 
Tel:(86) 10 6292 7777 ext.5581
Email: ir@kingsoft.com

Strategic Financial Relations (China) Limited
Ms. Karen Hung
Tel: (852) 2864 4845
Email: sprg-kingsoft@sprg.com.hk



Topic: Press release summary
Source: Kingsoft Corporation Limited

Sectors: IT Individual, eSports, Gaming
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