Kingsoft to Spin Off Powerword, WPS
Tencent Tech, 3/03/11
Wang Donghui, CFO for Chinese software firm Kingsoft (3888.HK), recently revealed in a press conference that Kingsoft's Powerword dictionary application and WPS Office software businesses will both be spun off into independent companies. Wang said that the move comes as part of Kingsoft's future plans to delegate power downward; subsidiary companies will see greater independence and function like start-ups, possibly leading to IPOs. Kingsoft Corporation, however, will remain the largest shareholder in both companies.
An inside source at Kingsoft said that the project to spin off Kingsoft Powerword into an independent subsidiary is now on the company's agenda. The source also says that following the split, the two companies will continue to operate using the "Kingsoft" brand name.
The move will leave Kingsoft with a total of five split-off operations: online gaming, anti-virus and security products, the Kuaikuai Game World game software manager, WPS Office and Powerword.
Powerword CEO Jia Lin has yet to directly comment on the move, but has said that operations following the split will see a rise in costs, including PR, promotions and maintenance, as well as a drop in support from the Kingsoft Group. Jia added, however, that given Powerword's current status, operations will continue even without Kingsoft's financial support.
In discussing further restructuring plans, Wang said that of its current operations, only Powerword and the company's gaming division have reached a level similar to that of Kingsoft when it went on the market, and either venture could handle an IPO at this time.
Keywords: corporate restructuring Jia Lin online gaming Kingsoft dictionary Internet IPO software office software PowerWord anti-virus 3888.HK WPS Office KuaiKuai Wang Donghui
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