Caixin
Nov 19, 2019 07:56 PM
BUSINESS & TECH

Shares in Office-Software Maker Hold Steady After Impressive Tech Board Debut

Xiaomi co-founder Lei Jun (left) and Kingsoft's former chief executive Qiu Bojun on Nov. 18 in Shanghai. Photo: VCG
Xiaomi co-founder Lei Jun (left) and Kingsoft's former chief executive Qiu Bojun on Nov. 18 in Shanghai. Photo: VCG

Shares in software developer Beijing Kingsoft Office Software Inc. have held steady on their second day trading after they hit the market at nearly triple their offering price on Monday.

Kingsoft Office raised 4.6 billion yuan ($655 million) on Monday by offering 21.91% of the company, or 101 million shares at 45.86 yuan apiece. Shares opened at 140 yuan before dropping to 126.35 at close. They closed up 7.65% to 136.01 yuan on Tuesday.

The Microsoft office clone-maker linked to billionaire Xiaomi-founder Lei Jun and ubiquitous in Chinese government departments saw one of the best debuts on Shanghai’s Nasdaq-style tech-focused STAR Market in the five months it has been running.

The IPO comes two years after parent group Kingsoft Corp. Ltd.’s abortive attempt to float the spun-off company in Shenzhen, which the company said failed after a sponsor pulled out.

Zhuhai-based Kingsoft Office is best known for making WPS Office, a free alternative to Microsoft office software such as Word and Excel, which runs on major operating systems such as Microsoft Windows, Apple macOS and Google Android. The company counted 328 million monthly active users in March.

Kingsoft’s prospectus boasts that its products and services are a particular favorite of Chinese bureaucrats. “In government departments in particular, it is used by more than 400 city and county governments in more than 30 provinces and provincial-level regions.”

Cloud services and purchasable themes form the backbone of the company’s revenue, with a smaller portion coming from commercial software licenses and advertising. Big clients include tech giant Alibaba Group Holding Ltd.’s e-commerce platforms Taobao and Tmall and social media titan Tencent Holdings Ltd.

The company is a subsidiary of Hong Kong-listed and Beijing-headquartered Kingsoft Corp., which is controlled by Lei Jun, the founder of Chinese smartphone giant Xiaomi Corp. The parent specializes in video games, mobile apps, cloud storage, and office software.

Shanghai’s STAR Market, run by the Shanghai Stock Exchange, is an alternative venue where Beijing hopes to entice tech giants such as Alibaba and Tencent to return from stock markets overseas.

In the first nine months this year, Kingsoft Office posted a profit of 200 million yuan, down 2.51% from the same period last year, according to its prospectus (link in Chinese). Revenue rose 39.5% to 1.04 billion yuan.

Contact reporter Tang Ziyi (ziyitang@caixin.com)

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