After Jinshan Software and Xiaomi were listed in Hong Kong, Lei Jun finally borrowed Jinshan Office to round out the A-share bell. On November 18, Jinshan Office landed on the Shanghai Stock Exchange’s Kechuang Board at an issue price of RMB 45.86 per share. The opening price rose to RMB 140, closing at 126.35, an increase of over 175%.

Many reports classified Jinshan Office as the third listed company controlled by Lei Jun, but strictly speaking, Jinshan Office is a subsidiary of Jinshan Software, which is listed in Hong Kong. Jinshan Software was established in 1988. Since 1999, Jinshan Office has been preparing for the listing. Therefore, Lei Jun said with excitement in his open letter to employees that “this day, we have waited for 20 years.”

成成 WPS, defeat also WPS

Speaking of Jinshan Office, you can’t help but mention the famous WPS office software. Is WPS copying Office? This is an issue of age exposure. In fact, in the early years, WPS was only the word processing software for the publishing industry and typists in the DOS system. It is essentially different from today’s WPS. On the time, in 1988, Qi Bojun wrote WPS 1.0 a year later, it was released than Microsoft. Word 1.0.

▲ Image from the web

Although the earliest experience of WPS is not good, it still swept the domestic office market with the advantages of Chinese editing and typesetting. Even Microsoft can only seek compatibility with the WPS file format.

However, the glory of WPS did not last too long. After the popularity of Windows in 1992, Word with a graphical interface WYSIWYG began to be favored by users. Although Lei Jun and others realized that DOS has gone, it lasted for three years. The “pangu component” developed by Windows not only makes Jinshan share the share in the ever-changing computer market, but also the “Pangu” which almost copied the DOS version of WPS. It has not been in line with the trend of the times. It only sold 2,000 sets in the 6th month of the listing. “It failed to open up the sky, but it almost ended the fate of Jinshan. In the words of Lei Jun, that year “almost lost the ideal of life.”

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The Jinshan software that fell from the peak of the peak was on the verge of bankruptcy. With the investment of Lenovo and the gadgets such as Kingsoft, Kingsoft, and Kingsoft Ranger, the new window-style WPS 97 was also released in 1997, but at this time. It is not the office software that makes Jinshan succeed. It is the “Jian Xia Love” which has been the benchmark of martial arts games for 20 years.

In December 2007, two months after Kingsoft’s listing in Hong Kong, Lei Jun, who served as CEO, left Jinshan. Three years later, when Lei Jun returned, he had already had one more identity—the founder of Xiaomi. Soon Jinshan Office was spun off from Jinshan Software. In 2011, Lei Jun became the chairman. Perhaps inspired by Xiaomi, perhaps the lesson that lost to Microsoft that year, the transition of WPS is faster than anyone else when the mobile era comes. The Android and iOS versions of WPS were released in 2011 and 2013, All in Mobile WPS finally found a different track than Microsoft Office.

▲ Image from: WPS

Pay subscriptions are a trend, but this business is not good

prospectus shows that as of March 2019, WPS Mobile version of monthly users exceeds 1.8.7 billion, accounting for nearly 60% of the company’s main products. Like the desktop, WPS on the mobile side also adopts the mode of personal use of free + value-added charges. Its revenue sources are mainly enterprise office software license, office service subscription and internet advertisement. Among them, the income from office service subscription accounts for the main business income. The ratio is gradually increasing, and it is close to 46% in the first quarter of 2019

▲ Image from: Prospectus Book

Replacing the original one-time buyout license with a paid subscription is also a trend today. The WPS subscription model emphasizes differentiation and customization for the enterprise side, and individual users pay attention to subdivision services other than the basic functions, such as document conversion. , document repair, document templates, cloud storage space, and more.

In terms of overall revenue, Jinshan Office is also gradually reducing its reliance on advertising and major customers. The revenue share of the five major customers has dropped from 41.19% in 2016 to 37.91% in 2017, compared with 27.68% last year. Most of the businessAdvertising is the mainstay, and Ali has become the number one gold owner for several years.

Although paid subscriptions seem to be a good business, like almost all companies in the country that are profitable models, Jinshan Office faces the embarrassment of low user fees. In 2019, WPS’s personal paying users are only 933. 10,000, this is too much compared with more than 100 million monthly activities, and this part of the paying users contributed more than 80% of the office subscription service, and the proportion of institutional customers is not high.

Of course, this can also be interpreted as a huge potential for growth in this part of the business. Jinshan also mentioned in the prospectus that it wants to convert free users into paying users with advertising and other rights, but the practice of paying for exemption from advertising harassment may Caused some users’ dislike.

The mobile office software market is not only the two players of Jinshan and Microsoft. The Tencent document and the graphite document are equally ambitious. The former is backed by WeChat, Enterprise WeChat and other application scenarios. The latter also has the support of bytebeat. WPS is trying to convert At the same time as free users, I am afraid to beware of the bad experience of advertising, and users who are not willing to pay will be rushed to the opponent’s site.