New Working Norm Pumps Kingsoft Office Up by 100% in 2020
In 1H 2020, the firm saw a revenue year-on-year growth of 38.4% with a net profit year-on-year growth of 143.3%.
Kingsoft Office (688111:SH) is a Beijing-headquartered software company controlled by Kingsoft (03888:HK). Being famous for its WPS Office kit, Kingsoft Office is the strongest competitor of Microsoft Office in China. Amid the COVID-19 pandemic, Kingsoft Office, like many other SaaS companies, recognized a strong growth in users, which reflected on its revenue and net profit. The company realized CNY 916 million with a gross margin of 86.14%, above the SaaS benchmark of 80%, and a net profit CNY 357 million. Up to the end of September, the market cap surpassed CNY 145 billion (USD 21 billion).
During the first half of 2020, MAU of the company’s key products increased by 10.5% to 454 million. At the end of 2019, the number was 411 million. The pandemic-induced digital working norm triggered rapid growth in MAU in the first three months in 2020 from 411 million to 447 million, but the growth slope curved down in the second quarter – MAU increased to 454 million at the end of June, which was the time that the pandemic was well-contained in China.
The increasing MAU brought a proportional increment in paid users. At the end of 2019, Kingsoft Office had 12.02 million paid users and six months later, the headcount had grown to 16.81 million. The coronavirus crisis shattered most brick-and-mortar companies, but it inspired the digital business worldwide – in a compulsive way.
Some may attribute the rapid growth to the pandemic, but the progressive digitalization is the momentum that drives the business of Kingsoft Office. The company’s WPS product has been upgraded at a rolling basis to adapt new tech trends like the cloud transition and collaborative working style. Cloud-based products realize the ‘whenever and wherever’ function for people to work and introduced the subscription services to replace the old one-time deal.
Competing with Microsoft Office, the company’s flagship product WPS office offers a better price for enterprise users and a free version for individual use. Beyond the document processing, Kingsoft Office handed with over 190 IT partners to offer an office working ecosystem with varied office desktop tools like email manager, voice recognition, handwriting tools, and so on. The company is looking for a synergetic future by allying with office software companies.