Oct. 19 (NBD) – Stock of Kingsoft Office Software Corp. (688111, SH), a Chinese developer of the WPS office software, continued to surge 7.65 percent closing at 136.01 yuan (19.4 U.S. dollars) on Tuesday, one day after the solid IPO debut with an offering price of 45.86 yuan.

The company's market cap now stands at about 62.7 billion yuan (9 billion U.S. dollars).

Kingsoft Office rang the bell on China's Nasdaq-like STAR Market on Monday and saw its shares rocketed up by over 175 percent to 126.35 yuan per share on the day.

Photo/Lei Jun's Weibo account

It's worth noting that Lei Jun, founder of China's smartphone maker Xiaomi (01810, HK), is the actual controller of Kingsoft Office with an indirect 11.99-percent stake.  

Kingsoft Office became the third listed company controlled by Lei Jun after Xiaomi and Kingsoft Corp Limited (03888, HK) and the first Lei Jun-controlled firm that landed on the Chinese A-share market. 

National Business Daily noticed that Lei Jun already targeted the A-share market last year when Hong Kong-listed Xiaomi prepared to issue the Chinese depository receipt (CDR) on the Shanghai stock exchange, but the plan was finally suspended.

On the eve before the IPO of Kingsoft Office, Lei Jun wrote on Twitter-like platform Weibo, "It's been 31 years since the company's inception. We have prepared and waited for the moment (of IPO) for 20 years." 

Back to 1988, WPS Office, the main product of the Kingsoft Office, prevailed in China with a 90-percent market share as soon as it was launched. But as Microsoft forayed into China in 1992, WPS Office quickly lost the ground.

After years of effort, the past lord caught up with the latecomer that still dominates the market. Currently, in China's office software market, a landscape where Microsoft Office and Kingsoft Office play a monopolizing role has been formed. 

As of the end of 2018, WPS Office secured a 42.75-percent market share in China's office software sector, and Microsoft Office still grabbed most of the market share.

According to CCW Research, in 2017, the penetration rate of Microsoft Office reached whopping 97.31 percent and the metrics for WPS Office was 61.74 percent on the Windows operating system. But WPS Office won the competition on the mobile end with a penetration rate of 73.21 percent in 2017, in comparison with Microsoft Office's 44.62 percent.

Despite lagging behind someway, Kingsoft Office delivered a better performance in terms of users and mobile office app, one of the weapons to challenge Microsoft Office revealed in the prospectus.

According to Kingsoft Office's prospectus, as of March 2019, the number of monthly active users of WPS Office reached around 300 million, while Microsoft's Office boasted over 214 million subscribers as of Q3 ended March 31 in fiscal 2019.

Email: gaohan@nbd.com.cn