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| 1. | What business is Kingsoft Corporation Limited in? | | | We are a leading software developer, distributor and service provider in China, based on market share. We leverage our comprehensive software development platform to offer a wide range of innovative entertainment and applications software. Our product development and support operations are focused on enhancing the user experience of our customers. We also increasingly utilize the Internet as an efficient and relatively secure channel to market and distribute our existing and new software products. |
| 2. | How and when was Kingsoft established? | | | Kingsoft Corporation Limited, an exempted limited liability company incorporated in the BVI on March 20, 1998 and discontinued in the BVI and continued into the Cayman Islands on November 15, 2005. The company was carried on by its subsidiaries since 1988.
The following chart sets forth major events and milestones in the development of our business
and the business of our predecessor companies:
Year Event/Milestone
| 1989 |
- Commercially launched our first office applications software, WPS 1.0
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| 1996 |
- Commercially launched one of the first domestically developed personal computer games in China
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| 1997 |
- Commercially launched our first dictionary software, Kingsoft PowerWord
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| 1998 |
- Lenovo Group Limited, one of the largest technology companies in China, through Lenovo acquired a 30% interest in us for an aggregate consideration of US$4.5 million
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| 2000 |
- Commercially launched our first Internet security product, Kingsoft Internet Security
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| 2002 |
- Awarded Capability Maturity Model for Software 2, or CMM2, and ISO9001 Certification
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| 2003 |
- Commercially launched our first online game, JX Online
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| 2004 |
- Entered into a strategic alliance with Taiwan Soft-World Technology Co., Ltd., to license JX Online in Taiwan; JX Online became one of the first few online games developed in China to enter the online games market in Taiwan |
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- Entered into a strategic alliance with VinaGame Joint Stock Company in Vietnam, our most successful overseas market, to license JX Online
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| 2005 |
- Established Kingsoft Japan to promote the sale of our applications software in Japan and commercially launched the Japanese language version of our Kingsoft Internet Security 2005 |
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- Commercially launched our second and third in-house developed online game, The First Myth and JX Online II |
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- Commercially launched JX Online in Vietnam |
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- Commercially launched JX Online series in Singapore and Malaysia |
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- Commenced subscription for online service of our applications software products
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| 2006 |
- Completed a US$50 million private placement of shares to Tetrad, Intel and New Horizon |
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- Commercially launched Xian Lu Qi Yuan II, our first licensed MMORPG as well as our first MMORPG to operate on the item-billing revenue model |
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- Commercially launched our second licensed online game, Shui Hu Q Zhuan |
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- Commercially launched JX Online II and First Myth in Taiwan |
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- Invested in Kingsoft Dalian and Kingsoft Guangzhou to engage in the research and development of casual games and cartoon MMORPGs, respectively |
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- Introduced the item-billing revenue model to JX Online
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| 3. | What is MMORPG? | | | MMORPG stands massively multiplayer online role-playing games, allow thousands of users to interact with one another in a virtual world by assuming ongoing roles or characters with different features. The games are continuous, and players accumulate features, advance in levels and communicate with one another through instant messaging. The interactive and group-oriented nature of our games creates a strong sense of community among users, and the large size of our user base contributes to user loyalty and helps to attract new users.
A MMORPG creates a virtual environment within which thousands of users can interact. Our games feature various styles of graphics including realistic and cartoon-style animation. Many of our games are set in ancient China and incorporate themes based on traditional Chinese literature and mythodology. |
| 4. | What games does Kingsoft currently offer? | | | Our MMORPG currently include JX Online, JX Online II, The First Myth, Xian Lu Qi Yuan II, Shui Hu Q Zhuan, CQ, JX Online World and The First Myth II. |
| 5. | Does Kingsoft have any new game launches planned? | | | We are currently developing four new MMORPGs in-house, most of which we expect to launch at regular intervals in the future: San Guo Online, JX Online III, SA II and MAT. |
| 6. | Does Kingsoft develop its games in-house? | | | We believe we have one of the largest in-house entertainment research and development teams in China. We have self-developed the majority of our entertainment products.
We have five game design studios located in Zhuhai, Beijing, Chengdu and Dalian. Each of these game design studios has a different area of focus and is responsible for the overall research development and testing of each assigned product. Our game design studios are assigned as follows:
- Zhuhai-swordsman games, such as the JX Online series;
- Beijing (two studios) - mythology games, such as the First Myth series and the San Guo game;
- Chengdu -cartoon-style games, such as CQ;
- Dalian-Casual online games.
We actively encourage knowledge sharing among our game design studios through formal rotation programs for our experienced game design staff. As of June 30, 2009, our five game design studios had approximately 1300 employees. Our associate, Kingsoft Guangzhou, also operates a game design studio and is developing MMORPGs that are targeted towards social game players. |
| 7. | What are the application software products which Kingsoft is currently offering? | | | Our applications software products, which have been developed in-house, include Kingsoft
Internet Security, Kingsoft PowerWord and WPS Office. |
| 8. | How does Kingsoft generate revenue? | | | We currently generate substantially all of our revenue from our entertainment software and
applications software businesses. We have also entered into arrangements to sell our products in various Asian markets. We license our in-house developed online games for distribution in other Asian markets, including Vietnam, Taiwan, Malaysia and Singapore. Under these licensing arrangements, the licensees are required to pay an up-front licensing fee as well as a periodic royalty fee equal to a percentage of revenue derived from our online games.
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| 9. | Where is Kingsoft based? | | | Our headquarter is in Beijing, China. We also have research and development teams in Beijing, Zhuhai, Chengdu, Dalian and Shenzhen.
Our address in Beijing is:
Kingsoft Tower, No. 33 Xiao Ying West Road, Haidian District, Beijing, China 100085
Tel: (86)010-82334488
Fax: (86)010-82325655
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| 10. | Where is Kingsoft Traded? | | | Kingsoft is traded on the Hong Kong Stock Exchange under stock code 3888. |
| 11. | When was Kingsoft’s initial public offering? | | | October 9, 2007 |
| 12. | Who were Kingsoft’s underwriters? | | | Deutsche Bank AG, Hong Kong Branch
Lehman Brothers Asia Limited
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| 13. | When does Kingsoft’s fiscal year end? | | | It ends in December of every year. |
| 14. | What is Kingsoft’s dividend policy? | | | We will not declare or pay any dividends other than from profits and reserves lawfully
available for distribution, including share premium. Our shareholders may approve the distribution of
dividends in a general meeting, but the amount may not exceed the amount recommended by our
Directors. Our Directors may from time to time also declare interim dividends as appear to our
Directors to be justified by our profits and may also declare half yearly or at other intervals at a fixed
rate if they are of the opinion that the profits available for distribution justify the payment of dividends.
The amount of any dividends to be declared or paid in the future will depend on, among other
things, our results of operations, cash flows and financial condition, operating and capital
requirements, the amount of distributable profits based on our articles of association, the Cayman
Islands Companies Law, applicable laws and regulations and other relevant factors.
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