Kingsoft Corporation (SEHK: 3888), a leading applications and entertainment software developer in China, announced today that it planned to spin off security software business and list the sector on NASDAQ or New York stock exchange. Kingsoft has filed to Hong Kong Stock Exchange for the spin-off.
Kingsoft’s security software business is operated by Kingsoft Internet Software Holdings Limited (KIS), also known as Kingsoft Network in China. The company is principally engaged in development and operation of security software and web browser Liebao, as well as cross-platform value-added services and online advertising.
Kingsoft and the management of KIS currently hold 54.09% and 13.5% stake in the company, respectively. The competition between Qihoo and KIS intensified after Keniu, an Internet security company founded by former Qihoo Exec Fu Sheng, was merged into Kingsoft’s anti-virus business in late 2010. Tencent, which also waged battle against Qihoo last year, partnered up with KIS by acquiring an 18% stake last year, becoming the second largest shareholder of the company.
Clean Master, an Android storage management app developed by KIS, recorded more than 100 million users, disclosed Fu Sheng, current CEO of KIS. The company stealthily released the product two year ago in English-language market and never mentioned it before the end of last year. The reason for this, according to Mr. Fu, is to avoid drawing attention from its major competitor Qihoo.
According to the fiscal report released by KIS, its revenue from online ads and operation platform surged 144% year-over-year to 171 million yuan ($28.26 million) in the third quarter of last year. Its monthly active users on mobile terminals hit 123 million in the same period.
KIS is expected to adopt dual-class share structure so that Kingsoft can still maintain control over the company and consolidate its financial results following the IPO. The shares offered in the IPO will have limited voting rights per share, while stocks available to founders and existing shareholders will have more voting power per share.
image credit: Kingsoft