► The office software developer was doing well during the local COVID-19 outbreak.
► Its share price spiraled upwards, boosted by its inclusion in MSCI indices.
Kingsoft Office (688111:SH), the largest (as of April 2020) company listed on the Shanghai exchange’s hi-tech board, released strong quarterly results on April 29. Its revenue in the first three months of 2020 hit CNY 372 million, while net profit reached CNY 110 million. Compared to the same period last year, the former added extra 30.90%, while the latter more than doubled, growing by 130.87%.
The Beijing-based software developer filed an IPO prospectus (in Chinese) in May 2019 and was approved by the tech venue’s review committee some five and a half months later. It launched open trading in November, raising CNY 4.5 billion on the IPO day.
China’s financial sector internationalization played a decisive role here, generating a great deal of hype around Kingsoft Office’s business: the stock’s inclusion into two of MSCI’s China indices was a boon to its market performance in 2020. As a result, the firm has emerged as the biggest winner among its Star Market-listed peers in the March quarter. (Check out our latest quarterly overview of the new venue.)
In fact, the leading stock index manager’s solution is not the only pillar of the company’s latest success. On March 24, it posted stellar annual results for 2019: revenue grew by nearly 40% to CNY 1.58 billion, with net profit adding 30% to CNY 400 million that year.
The firm is a subsidiary of Kingsoft Corporation (3888:HKEX), which is also active in online gaming, licensing, online marketing, Internet security, as well as a few other segments of the digital sphere. The Corporation’s cloud business, for instance, was set to go public in New York last December, a couple of weeks after closing a USD 50 million Series D+.
On April 30, Kingsoft Office closed trading at CNY 262.48 apiece (an equivalent of over 260 times earnings), which gave it a market valuation of over CNY 121 billion.