On June 28, Beijing Kingsoft Office Software, Inc. (ASX: 688111) announced a share repurchase plan, citing confidence in the company's future development and recognition of its long-term investment value. The initiative aims to enhance the long-term incentive mechanism, boost employee motivation, improve team cohesion and competitiveness, and effectively align the interests of shareholders, the company, and employees. The decision was made after comprehensive consideration of the company's development strategy, operational status, financial condition, and future profitability. The company will use its own funds for the repurchase through centralized competitive bidding. The proposal was put forward by the company's actual controller Lei Jun, Chairman Zou Tao, and General Manager Zhang Qingyuan.
The total amount of funds allocated for the repurchase is set to be no less than 2.5 billion yuan and no more than 5 billion yuan. Based on the lower limit of 2.5 billion yuan and an upper repurchase price limit of 352.11 yuan per share, the estimated number of shares to be repurchased is approximately 710,000, representing about 0.15% of the company's total share capital. Using the upper limit of 5 billion yuan and the same price cap, the estimated repurchase would be around 1.42 million shares, or about 0.31% of the total share capital. All repurchased shares will be used for implementing employee stock ownership plans or equity incentive plans and are to be transferred within three years after the company announces the repurchase implementation results and share changes.
Significant Share Price Decline
It is noteworthy that, according to Choice data, the share price of Kingsoft Office has fallen by 34.86% since the beginning of 2024. As of the close on June 26, the stock was down 6.13%, trading at 200.03 yuan per share, with a total market capitalization of 92.82 billion yuan.
Product Issues Spark User Criticism
Concurrent with the stock price decline, products from Kingsoft Office have drawn widespread criticism from users. Public information shows that the company, which went public on the STAR Market in 2019, is a leading provider of office software products and services in China, with flagship products including WPS Office, WPS 365, and WPS AI.
Despite its strong financial performance, with steady growth in revenue and net profit in recent years, the company recently faced public scrutiny. The topic "#被WPS背刺了#" (meaning "backstabbed by WPS") trended on Weibo's hot search list. Many users, in an effort to prevent system slowdowns, had installed the WPS software on their D or E drives. However, WPS was defaulting its cloud sync cache, cloud backup, and historical documents to the C drive's system directory. This practice led to a large number of users experiencing critically full C drives, causing severe computer lag.
In response, Kingsoft Office stated to media outlets that it had completed an investigation and initiated optimizations. An updated version featuring these optimizations, including a new "Storage Management" module in the settings page, is scheduled for release in July.
Accumulating User Complaints
Meanwhile, data from the Black Cat Complaint platform shows that, as of the time of reporting, there were 12,679 complaints containing the search term "WPS." The related complaints include issues such as unauthorized fee deductions and misleading advertising.