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Jinshan Office IPO: WPS income less than Microsoft Office fraction

via:博客园     time:2017/6/8 9:00:32     readed:2227

In July 2014, Lei Jun in the microblogging drying out a 1998 old photo, the photo was slightly Sentimental Lei Junzheng and Qiu Bojun accompanied by Lenovo Group Liu Chuanzhi, Yang Yuqing watch WPS at the time of the new product demonstration. Lei Jun sigh: "I spent more than 20 years in Jinshan, my youth all in Jinshan. I always believe that Jinshan will become a great company. & Rdquo;

Today, Lei Jun dedicated to the decades of Jinshan software, has developed into a cheetah mobile, Xishan home, WPS and Jinshan cloud and other business segments of large enterprise groups. At the end of May, Beijing Jinshan Office Software Co., Ltd. (hereinafter referred to as Jinshan office) in the SFC official website disclosed the prospectus.

WPS domestic market share of 27.81%

Speaking of Jinshan office, its office software products WPS Office and Kingsoft, must be more familiar. As the leader of domestic office software, according to the prospectus disclosure, in December 2016, Jinshan office products monthly active users more than 247 million, and in accordance with the total registered users of WPS 166 million calculation, 2016 its WPS office software users accounted for domestic office The total size of the market users 27.81%, is the largest domestic office software and service providers.

2014 ~ 2016, Jinshan office were operating income of 283 million yuan, 394 million yuan and 545 million yuan, net profit of 13.6346 million yuan, -1.45 billion and 1.71 billion yuan. In 2015, the net profit of the Company fluctuated significantly, mainly due to the reorganization of Jinshan office demolition of red chips VIE and the payment of share costs.

At present, Jinshan office of the controlling shareholder of WPS Hong Kong, which holds 67.50% stake in the company. Jinshan Software (03888, HK) holds a 100% stake in WPS Hong Kong through WPS Cayman, which owns 27.06% of the total voting rights. In addition to holding the company through Jinshan software shares, as Jinshan office of the actual controller and director, Lei Jun also through the Internet for the Internet, Qiwen two-dimensional, Qiwen four-dimensional, Qiwen five-dimensional, Qiwen seven indirectly held Jinshan office 1.656% of the shares.

In March 2016, Jinshan office part of the shareholders of its capital increase, also agreed WPS Hong Kong, Morningside two, Ji source WPS, along the Internet can enjoy priority over other shareholders, including priority subscription rights. However, the above shareholders' rights have been in June 2016 Jinshan office shares to terminate, and once Jinshan office in 3 years failed to successfully listed, the rights of these shareholders or will be restored.

"Daily Economic News" reporter noted that the above-mentioned priority to the situation is the venture capital investment in the general practice. Some companies have similar terms in accepting venture capital, but because A shares require the same shares, so the IPO will often choose to temporarily suspended.

WPS and Microsoft Office gap is still large

Speaking of WPS, had to mention Microsoft's Microsoft Office. As a set of Microsoft's Windows operating system based on the office software suite, Microsoft Office currently occupies a major share in the global market, the Chinese market also dominates.

According to CCW Research data show that the current Microsoft Microsoft Office products still rely on a strong pre-installed operating system Windows operating advantage in the PC market continues to dominate the market penetration rate of 97.31%; and domestic manufacturers Jinshan by virtue of the focus in large-scale industry customers Expansion, individual customers free of charge and other strategies, Jinshan WPS Office products market penetration rate of 61.74%.

But the gap between WPS and Microsoft Office is still small, which is seen from the size of the two revenue.

According to Microsoft's earnings report, from January to March this year, Microsoft made $ 22.1 billion in revenue and $ 4.8 billion in net profit. Among them, Office where the productivity and business processes sector, contributed 7.9 billion US dollars of income (equivalent to 53.663 billion yuan). If the latter rough calculation of Office income, WPS income plate is still very small - Jinshan office in the first quarter of this year's revenue of 128 million yuan.

WPS is more in line with the needs of the Chinese market users, compatibility is also better than Microsoft Office software, because of its individual users to take a free competitive strategy, the expansion of its speed in recent years is very fast. "Internet senior Wang Liyang" Daily Economic News "reporter said.

Compared to Microsoft Office, Jinshan office products and services are mainly for the government, finance, energy, aviation and other fields.

Advertising revenue growth of the AB side

Revenue from the use of the software license is the main income composition of Jinshan office.

From 2014 to 2016, the Company's license to use the software was RMB192 million, RMB222 million and RMB237 million respectively. The gross profit margin of the business was 98.40%, 97.87% and 97.82% respectively. As WPS to individual users to take a permanent free strategy, so the use of these software license revenue, should be more from the company's corporate customers.

In addition to the use of software revenue, for enterprise users and a large number of free user base, Jinshan office began to provide value-added services and advertising to seek new profit growth point.

2014 ~ 2016, Jinshan office for business and individual users to provide office services subscriptions were 9.5344 million yuan, 1950.32 million and 62.2898 million yuan, accounting for the proportion of 3.37% in 2014 increased to 2016 11.44%. Another business for the company to promote Internet advertising services, in 2016 the proportion of the business accounted for 45.08%.

In recent years, WPS in the value-added business and advertising business, WPS development is better, especially in value-added services, WPS can provide a variety of templates, the way the charges are also very flexible, in line with the habits of Chinese consumers. Wang Liyang said that Internet users are now willing to pay for such network value-added services is getting higher and higher, and WPS charges are not very high, users are willing to try. The advertising business this piece, with the WPS number of users increased, there are better prospects.

But Wang Liyang "Daily Economic News" reporter admitted that "the real value-added services for the WPS users to pay, and ultimately a small number, and this part of the user, the payment frequency is not high, WPS value-added business for its performance to bring much Of space, remains to be seen. In the advertising business, the user for more ads or have some resistance, too much advertising will also affect the user experience. & Rdquo;

Jinshan office also said in the prospectus, the company's advertising business with "free + advertising" -based profit model, but the profit model by the user can accept the amount of advertising constraints, that is, if the company in the product advertising Too much, it may reduce the user experience, resulting in the loss of users, thereby reducing the value of the company's advertising products, the issuer's Internet advertising services to bring negative impact.

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