SHANGHAI, March 5, 2014 /PRNewswire-FirstCall/
-- Giant Interactive Group Inc. (NYSE: GA) ("Giant" or the
"Company"), one of China's leading
online game developers and operators, announced today its unaudited
financial results for the fourth fiscal quarter and fiscal year
ended December 31, 2013.
Fourth Quarter 2013 Highlights as
Compared to Third Quarter 2013 ("QoQ") and
Fourth Quarter 2012 ("YoY"):
- Net revenue was RMB604.6 million
(US$99.9 million), up 2.5% QoQ and up
5.8% YoY.
- Gross profit was RMB536.9 million
(US$88.7 million), up 4.8% QoQ and up
8.9% YoY. Gross profit margin for the fourth quarter 2013 was
88.8%.
- Net income attributable to the Company's shareholders was
RMB203.6 million (US$33.6 million), down 42.8% QoQ and up 146.2%
YoY. The margin of net income attributable to the Company's
shareholders for the fourth quarter 2013 was 33.7%.
- Basic and diluted earnings per American Depositary Share
("ADS") which represents one ordinary share, were RMB0.85 (US$0.14)
and RMB0.82 (US$0.14), respectively, compared to basic and
diluted earnings per ADS of RMB1.48
and RMB1.44, respectively, for the
third quarter 2013, and basic and diluted earnings per ADS of
RMB0.35 and RMB0.34, respectively, for the fourth quarter
2012.
- Non-GAAP net income attributable to the Company's shareholders
was RMB437.3 million (US$72.2million), up 17.4% QoQ and 24.9% YoY. The
margin of non-GAAP net income attributable to the Company's
shareholders was 72.3%.
- Basic and diluted non-GAAP earnings per ADS were RMB1.82 (US$0.30)
and RMB1.76 (US$0.29), respectively, compared to basic and
diluted non-GAAP earnings per ADS of RMB1.55 and RMB1.50, respectively, for the third quarter
2013, and basic and diluted non-GAAP earnings per ADS of
RMB1.47 and RMB1.43, respectively, for the fourth quarter
2012.
- Active Paying Accounts ("APA") for online games was 2,362,000,
up 1.1% QoQ and up 2.7% YoY.
- Average Revenue Per User ("ARPU") for online games was
RMB246, up 0.6% QoQ and up 3.7%
YoY.
- Average Concurrent Users ("ACU") for online games was 698,000,
up 0.1% QoQ and down 0.6% YoY.
- Peak Concurrent Users ("PCU") for online games was 2,220,000,
down 2.2% QoQ and down 6.3% YoY.
Please refer to the table on page 8 for reconciliation between
net income attributable to the Company's shareholders on a GAAP to
non-GAAP basis.
Fiscal Year 2013 Highlights as Compared to Fiscal Year
2012:
- Net revenue increased 9.5% to RMB2,355.5
million (US$389.1
million).
- Gross profit increased 10.4% to RMB2,056.8 million (US$339.8 million).
- Gross profit margin was 87.3%.
- Net income attributable to the Company's shareholders increased
26.1% to RMB1,253.0 million
(US$207.0 million).
- Net income attributable to the Company's shareholders as a
percentage of net revenue was 53.2%.
- Basic and diluted net income per ADS increased 24.5% and 23.0%,
respectively, to RMB5.23 (US$0.86) and RMB5.08 (US$0.84),
respectively.
- Non-GAAP net income attributable to the Company's shareholders
increased 13.4% to RMB1,536.0 million
(US$253.7 million).
- Non-GAAP net income attributable to the Company's shareholders
as a percentage of net revenue was 65.2%.
- Basic and diluted non-GAAP net income increased 12.1% and
10.7%, respectively, to RMB6.41
(US$1.06) and RMB6.22 (US$1.03),
respectively.
Please refer to the table on page 8 for a reconciliation between
net income attributable to the Company's shareholders on a GAAP to
non-GAAP basis.
Ms. Wei Liu, Giant's Chief
Executive Officer, commented, "2013 marked another year of
consistent and strong growth. We have delivered double-digit annual
growth in online game revenue as compared to fiscal year 2012, and
sequential quarter-over-quarter growth for the past sixteen
consecutive quarters. Our 2013 results were driven by the launch of
World of Xianxia, which has become another successful
franchise and demonstrates our ability to expand our portfolio
without cannibalizing existing games. At the same time, during 2013
we also made great progress in diversifying into new growth areas
such as webgames and mobile games, while continuing to lead the
industry in profitability."
"Looking towards 2014, we believe we have an exciting lineup of
new games starting with Jianghu, a 2D martial arts MMORPG
produced by the Company's President, Mr. Xuefeng Ji. Initial testing results have been
very positive, and we are confident this game will be a major
catalyst this year. Another upcoming client-based game is
Cang Tian 2, licensed from
WeMade. We have been working extensively with the South Korean
developer to localize the game for the Chinese market and are
preparing for its debut in the coming quarter."
"Towards the end of 2013, we began launching webgames on several
partner platforms and the results have surpassed our expectations.
We expect webgames to continue to grow in 2014 and enable us to
capture a new audience."
"Mobile games have become a major strategic growth focus for us
and we expect some of our prior investments will begin to bear
fruit in 2014. Our internally-developed mobile games will hit the
market later this year. Our roadmap of mobile games under
development has also become much wider, covering genres such as
role playing games, side-scrolling action, tower defense,
simulation, and real time strategy."
"Besides developing the best games across multiple genres
in-house, we are also continuing to pursue cooperation with third
party developers and platforms to extend our footprint in the game
industry. As we continue to grow in the traditional PC segment
while investing in mobile opportunities, we will continue to spend
prudently and remain the leader in profitability. We are confident
that 2014 will be another banner year for Giant."
Fourth Quarter Fiscal 2013 and
Fiscal Year 2013 Unaudited Financial
Results
Net Revenue. Net revenue for the fourth
quarter 2013 was RMB604.6 million
(US$99.9 million), representing a
2.5% increase from RMB590.0 million
in the third quarter 2013, and a 5.8% increase from RMB571.7 million in the fourth quarter 2012.
Revenue from online games in the fourth quarter 2013 totaled
RMB591.8 million (US$97.8 million), representing a 1.7% increase
from RMB581.8 million in the third
quarter 2013, and a 6.5% increase from RMB555.7 million in the fourth quarter 2012. The
sequential increase in online game net revenue was mainly due to
the performance of ZT Online 2. The year-over-year increase
was primarily due to the launch of World of Xianxia in
2013.
For the fiscal year 2013, revenue from online games increased
11.3% to RMB2,309.3 million
(US$381.5 million), from RMB2,075.0 million in 2012.
APA for online games in the fourth quarter 2013 was 2,362,000,
representing a 1.1% sequential increase and a 2.7% increase over
the fourth quarter 2012. The sequential increase in APA was mainly
due to additional paying gamers in ZT Online 2 while the
year-over-year increase in APA was mainly due to the addition of
World of Xianxia in 2013. ARPU for online games in the
fourth quarter 2013 was RMB246,
representing a 0.6% sequential increase and a 3.7% increase over
the fourth quarter 2012. The year-over-year increase in ARPU was
mainly due to the addition of World of Xianxia. ACU for
online games in the fourth quarter 2013 was 698,000, representing a
0.1% sequential increase and a 0.6% decrease over the fourth
quarter 2012. PCU for online games in the fourth quarter 2013 was
2,220,000, representing a 2.2% sequential decrease and a 6.3%
decrease over the fourth quarter 2012. The sequential and
year-over-year decreases in PCU were mainly due to the lack of new
marketing campaigns and launches in the fourth quarter
2013.
Cost of Services. Cost of services for the
fourth quarter 2013 was RMB67.7
million (US$11.2 million),
representing a 12.7% decrease from the third quarter 2013 and a
13.8% decrease from the fourth quarter 2012. The sequential
decrease and year-over-year decreases in cost of services were
mainly due to the lower costs accrued for the Company's licensed
games in the fourth quarter 2013.
Cost of services increased 3.6% to RMB298.7 million (US$49.3
million) for the fiscal year 2013, from RMB288.4 million in 2012. This increase was
primarily attributable to the higher costs accrued for the
Company's licensed games.
Gross Profit and Gross Margin. Gross profit
for the fourth quarter 2013 was RMB536.9
million (US$88.7 million),
representing a 4.8% increase from the third quarter 2013 and an
8.9% increase from the fourth quarter 2012. Gross margin for the
fourth quarter 2013 was 88.8%, up from 86.9% in the third quarter
2013, and up from 86.3% in the fourth quarter 2012.
Gross profit increased 10.4% to RMB2,056.8 million (US$339.8 million) for the fiscal year 2013, from
RMB1,863.5 million in 2012, driven by
the increase in net revenue. Gross margin for the fiscal year 2013
was 87.3%, compared to 86.6% in 2012.
Operating Expenses. Total operating expenses for
the fourth quarter 2013 were RMB134.8
million (US$22.3 million),
representing a 17.8% decrease from RMB164.0
million in the third quarter 2013 and a 15.3% decrease from
RMB159.2 million in the fourth
quarter 2012. As a percentage of revenue, total operating expenses
were 22.3% for the fourth quarter 2013, compared to 27.8% in the
third quarter 2013 and the fourth quarter 2012. The sequential
decrease in operating expenses was mainly attributable to decreases
in sales and marketing ("S&M") and general and administrative
expenses ("G&A") expenses, partially offset by an increase in
research and product development ("R&D") expenses. The
year-over-year decrease was mainly due to decreases in R&D and
S&M expenses.
For the fiscal year 2013, total operating expenses increased
5.3% to RMB587.7 million
(US$97.1million) from RMB558.3 million in 2012. The increase was mostly
due to higher S&M expenses and lower government financial
incentives, partially offset by decreased G&A
expenses.
Research and product development ("R&D") expenses for the
fourth quarter 2013 was RMB87.5
million (US$14.5 million),
representing a 16.7% increase from RMB75.0
million in the third quarter 2013 and a 9.3% decrease from
RMB96.5 million in the fourth quarter
2012. As a percentage of revenue, R&D expenses were 14.5% for
the fourth quarter 2013, compared to 12.7% in the third quarter
2013 and 16.9% in the fourth quarter 2012. The sequential increase
in R&D expenses was mainly attributable to year-end bonuses for
our R&D employees. The year-over-year decrease was primarily
due to the Company's accelerated accounting policy in amortizing
share-based compensation expenses. Such expenses generally decline
from period to period.
For the fiscal year 2013, R&D expenses decreased 1.8% to
RMB321.0 million (US$53.0 million) from RMB326.8 million in 2012. The decrease was mostly
due to the Company's accelerated accounting policy in amortizing
share-based compensation expenses. Such expenses generally decline
from period to period.
Sales and marketing ("S&M") expenses for the fourth quarter
2013 were RMB28.6 million
(US$4.7 million), representing a
54.6% decrease from RMB62.9 million
in the third quarter 2013, and a 26.5% decrease from RMB38.9 million in the fourth quarter 2012. As a
percentage of revenue, S&M expenses were 4.7% in the fourth
quarter 2013, compared to 10.7% in the third quarter 2013 and 6.8%
in the fourth quarter 2012. The sequential decrease in S&M
expenses was mainly due to the marketing campaigns for the open
beta testing for World of Xianxia, as well as for the
expansion packs for ZT Online 1 and ZT Online 2
during the third quarter 2013, while in the fourth quarter 2013,
marketing campaigns for these games reverted back to normal levels.
The year-over-year decrease in S&M expenses was due to the lack
of large marketing campaigns in the fourth quarter 2013 compared to
the fourth quarter 2012.
For fiscal year 2013, S&M expenses were RMB175.8 million (US$29.0
million), up 20.0% from RMB146.5
million for fiscal year 2012, mainly due to the marketing
campaigns for World of Xianxia.
General and administrative expenses ("G&A") for the fourth
quarter 2013 were RMB33.9 million
(US$5.6 million), representing a 4.9%
decrease from RMB35.6 million in the
third quarter 2013, and a 0.9% decrease from RMB34.2 million in the fourth quarter 2012. As a
percentage of revenue, G&A expenses were 5.6% in the fourth
quarter 2013, compared to 6.0% in the third quarter 2013 and the
fourth quarter 2012. The sequential decrease in G&A expenses
was due to the increase of reimbursements related to our ADR
program. The year-over-year decrease was primarily due to the
Company's accelerated accounting policy in amortizing share-based
compensation expenses. Such expenses generally decline from period
to period.
For fiscal year 2013, G&A expenses decreased 8.7% to
RMB135.7 million (US$22.4 million) from RMB148.7 million in fiscal year 2012. The
decrease was primarily due to the Company's accelerated accounting
policy in amortizing share-based compensation expenses. Such
expenses generally decline from period to period.
Government Financial Incentives. The
government financial incentives, which mainly relate to the refund
of business tax, value-added tax, and enterprise income tax from
the Shanghai municipal government,
was RMB15.2 million (US$2.5 million) in the fourth quarter 2013. The
Company records these government financial incentives as a
reduction in operating expenses.
The total financial incentive received for fiscal year 2013 was
RMB44.8 million, as compared to
RMB63.6 million in 2012.
Interest Income. Interest income for the
fourth quarter 2013 was RMB38.6
million (US$6.4 million),
representing a 99.1% increase from RMB19.4
million in the third quarter 2013, and a 45.5% increase from
RMB26.6 million in the fourth quarter
2012. The sequential and the year-over-year increases in interest
income were mainly due to the growing cash balance and higher
returns on certain short-term investments.
For the fiscal year 2013, interest income increased to
RMB128.6 million (US$21.2 million) from RMB105.8 million in fiscal year 2012, mainly
attributable to the growing cash balance and higher returns on
certain short-term investments.
Income Tax. Income tax expense for the
fourth quarter 2013 was RMB237.8
million (US$39.3 million),
compared to income tax expense of RMB0.5
million in the third quarter 2013 and income tax expense of
RMB28.7 million in the fourth quarter
2012. The sequential and year-over-year increases in income tax
expense were mainly due to withholding tax accrued in the fourth
quarter 2013 in anticipation of the repatriation of earnings from
the Company's PRC operations given the privatization proposal the
Company received in November
2013.
Income tax expense for fiscal year 2013 increased to
RMB296.6 million (US$49.0 million), compared to RMB124.2 million for fiscal year 2012. The
increase in income tax expense was mainly due to the withholding
tax accrued in the fourth quarter 2013 described above.
Net Income Attributable to the Company's
Shareholders. Net income attributable to the
Company's shareholders for the fourth quarter 2013 was RMB203.6 million (US$33.6
million), representing a 42.8% decrease from RMB355.8 million in the third quarter 2013, and a
146.2% increase from RMB82.7 million
in the fourth quarter 2012. The sequential decrease in net income
attributable to the Company's shareholders was primarily due to the
Company's higher income tax expense in the fourth quarter as
compared to the third quarter 2013, partially offset by lower
operating expenses, higher interest income and other non-operating
income. The year-over-year increase was due to the Company's
investment loss in the fourth quarter 2012, which related to the
impairment of our investment in 51.com, higher net revenue and
lower operating expenses in fourth quarter 2013 compared to fourth
quarter 2012, partially offset by higher income tax expense in
fourth quarter 2013 for the reason described above.
Fiscal year 2013 net income attributable to the Company's
shareholders was RMB1,253.0 million
(US$207.0 million), a 26.1% increase
from RMB993.7 million in 2012.
Fiscal year 2013 net income attributable to the Company's
shareholders as a percentage of net revenue increased to 53.2% from
46.2% in 2012.
Non-GAAP net income attributable to the Company's shareholders
for the fourth quarter 2013 was RMB437.3
million (US$72.2 million)
representing a 17.4% increase from RMB372.5
million in the third quarter 2013, and a 24.9% increase from
RMB350.0 million in the fourth
quarter 2012. Non-GAAP net income attributable to the Company's
shareholders excludes certain items as described in further detail
in the reconciliation table below. The margin of non-GAAP net
income attributable to the Company's shareholders was 72.3% for the
fourth quarter 2013, compared to 63.1% in the third quarter 2013
and 61.2% in the fourth quarter 2012.
For fiscal year 2013, non-GAAP net income attributable to the
Company's shareholders was RMB1,536.0
million (US$253.7 million)
representing a 13.4% increase from RMB1,354.3 million in fiscal year 2012. The
increase was due to the growth of the Company's game operations.
The margin of non-GAAP net income attributable to the Company's
shareholders was 65.2% for the fiscal year 2013, compared to 62.9%
in the fiscal year 2012.
Cash and Cash
Equivalents and Short-Term Investments.
As of December 31, 2013, the
Company's cash and cash equivalents, restricted cash and short-term
investments totaled RMB3,831.2
million (US$632.9 million),
compared to RMB3,734.8 million as of
September 30, 2013. The sequential
increase was primarily due to the growth of the Company's game
operations, generating additional cashflow.
Receipt of Non-Binding Proposal to Acquire the
Company. On November 25,
2013, the Company announced that its Board of Directors (the
"Board") had received a preliminary non-binding proposal letter,
dated November 25, 2013, from the
Company's Chairman, Mr. Yuzhu Shi
(and certain of his affiliated entities) and an affiliate of Baring
Private Equity Asia (collectively, the "Consortium"). According to
the proposal letter, the Consortium proposed to acquire all of the
Company's outstanding ordinary shares, including ordinary shares
represented by the Company's American depositary shares or "ADSs"
(each representing one ordinary share of the Company), at a price
of US$11.75 in cash per ordinary
share or ADS (the "Proposed Transaction").
On December 2, 2013, the Company
announced that its board of directors formed a special committee
(the "Special Committee"), comprised of three independent directors
of the Company, Mr. Peter Andrew
Schloss, Mr. Andy Y. Yan and
Mr. Jason Nanchun Jiang, to consider the Proposed Transaction as
well as any alternative transaction (if any). The Special Committee
subsequently retained Fenwick & West LLP as its U.S. legal
counsel and Morgan Stanley Asia Limited and Duff & Phelps
Securities, LLC as its financial advisors.
The Special Committee has not set a definitive timetable for the
completion of its evaluation of the Proposed Transaction or any
other alternative transaction (if any) and does not intend to
announce developments unless and until an agreement has been
reached. There can be no assurance that any definitive offer will
be made, that any agreement will be executed or that the Proposed
Transaction or any alternative transaction will be approved or
consummated.
Sale of Investment in Yunfeng E-Commerce
Funds. On February 11,
2014, the Company entered into an agreement to sell all of
its limited partnership interest in Yunfeng E-Commerce Fund A, L.P.
and Yunfeng E-Commerce Fund B, L.P. (which collectively hold all of
the Company's interest in the ordinary shares of Alibaba Group
Holding Limited) to Tiger Global Mauritius Fund for approximately
US$199.1 million.
Game Updates
ZT Online 2 – During the fourth quarter
2013, the Company rolled out a PK tournament in which a series of
new game mechanics were introduced to satisfy different needs for
gamers looking for various experiences. These updates greatly
improved the level of user engagement within the game. The Company
plans to release an expansion pack for ZT Online 2 in the
first quarter 2014.
World of Xianxia – The Company released the
first expansion pack for World of Xianxia on November 22, 2013, in which new levels were
unlocked, plus new maps and dungeons were introduced. Gamers have
welcomed the new contents released. The Company plans to release a
new expansion pack in the first quarter 2014.
Webgames - Supreme Tai-Chi is a
self-developed action role playing game ("ARPG") with a unique hero
system in which gamers can collect and play as the 108 characters
from Water Margin (known in Chinese as Shui
Hu Zhuan), a classic Chinese novel, and many gods from
ancient Chinese mythology. Operations commenced on Sina, 37wan and
Qihoo360 during the fourth quarter 2013 and the results have
significantly exceeded the Company's expectation. Genesis of the
Empire is a self-developed ARPG based on the Three Kingdoms era
of ancient Chinese history. The Company started to distribute the
game on 37wan, Qihoo360, Baidu and a wide selection of other major
webgame platforms in the fourth quarter 2013.
Mobile Games – Kung Fu BBQ is the Company's
first self-developed mobile game. It is a turn-based card battle
game that features Kung Fu and
mythological characters using Unity 3D engine. The game is
currently undergoing small-scale engineering testing on iOS and
Android app stores. The game is scheduled for commercial launch in
April 2014.
Jianghu – Jianghu is a 2D martial
arts MMORPG produced by the Company's President, Mr. Xuefeng Ji. It is his team's next flagship title
following ZT Online 2 and has been under development for 3
years. The Company conducted the first round of engineering testing
in January 2014. The initial gamer
feedback has been very positive. The R&D team will continue to
optimize the game according to previous testing results and gamer
feedback. The Company plans to conduct larger-scale engineering
testing in March 2014.
Cang Tian 2
– Cang Tian 2 is a 3D
MMORPG developed by WeMade Entertainment Inc., one of the leading
online game developers in South
Korea. Core development teams from both companies are
currently working together to localize the game for the
China market. Extensive work has
been performed and changes have been made to the core gameplay,
graphics and in-game economy in an effort to further enhance
playability and user experience for the local Chinese gamers. The
Company expects to commence engineering testing in the first
quarter 2014.
Conference Call
Due to the receipt of a non-binding proposal to acquire the
Company and its ongoing process, Giant's senior management will not
host a conference call. Please contact one of the IR
representatives listed below if you have any questions.
Currency Convenience Translation
This earnings press release contains translations of certain
Renminbi (RMB) amounts into US dollars (US$) at the rate of
US$1.00 to RMB6.0537, which was the
noon buying rate as of December 31,
2013 in the City of New
York for cable transfers in Renminbi per US dollar as
certified for customs purposes by the Federal Reserve Bank of
New York. The Company makes
no representation that the Renminbi or US dollar amounts referred
to in this release could have been, or could be, converted into US
dollars at such rate or at all.
Use of Non-GAAP Financial Measures
The Company has reported net income attributable to the
Company's shareholders for the period indicated below on a non-GAAP
basis excluding non-cash share-based compensation expense, accrued
withholding tax and impairment of investment in 51.com. The Company
believes that both management and investors benefit from referring
to these non-GAAP financial measures in assessing the performance
of the Company as well as when planning and forecasting future
periods.
We do not believe that these charges are indicative of future
operating results. We believe that investors benefit from excluding
these charges from our operating results to facilitate a more
meaningful evaluation of current operating performance and
comparisons of past operating performance.
Readers are cautioned not to view non-GAAP results on a
stand-alone basis or as a substitute for results under GAAP, or as
being comparable to results reported or forecasted by other
companies, and should refer to the reconciliation of GAAP results
with non-GAAP results in the attached financial information.
The table below sets forth the reconciliation of GAAP measures
to non-GAAP measures for the indicated periods:
Giant Interactive
Group Inc.
|
Reconciliation of
GAAP to Non-GAAP (Unaudited)
|
|
|
Three months
ended
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
2012
|
|
2013
|
|
2013
|
|
2013
|
|
(RMB)
|
|
(RMB)
|
|
(RMB)
|
|
(US$)
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to the Company's
shareholders:
|
82,690,299
|
|
355,756,450
|
|
203,597,496
|
|
33,631,912
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
26,554,599
|
|
16,782,473
|
|
18,398,880
|
|
3,039,278
|
Accrued withholding
tax
|
-
|
|
-
|
|
215,267,363
|
|
35,559,635
|
Impairment of
investment in 51.com investment
|
240,725,709
|
|
-
|
|
-
|
|
-
|
Non-GAAP net
income attributable to the
Company's
shareholders:
|
349,970,607
|
|
372,538,923
|
|
437,263,739
|
|
72,230,825
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.47
|
|
1.55
|
|
1.82
|
|
0.30
|
Diluted
|
1.43
|
|
1.50
|
|
1.76
|
|
0.29
|
|
|
|
|
|
|
|
|
Weighted average
ordinary shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
238,308,804
|
|
239,582,227
|
|
240,198,365
|
|
240,198,365
|
Diluted
|
243,966,387
|
|
247,718,392
|
|
248,241,798
|
|
248,241,798
|
|
For the year
ended
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2012
|
|
2013
|
|
2013
|
|
(RMB)
|
|
(RMB)
|
|
(US$)
|
|
|
|
|
|
|
GAAP net income
attributable to the Company's
shareholders:
|
993,720,006
|
|
1,252,967,928
|
|
206,975,555
|
|
|
|
|
|
|
Share-based
compensation
|
119,892,890
|
|
67,798,091
|
|
11,199,447
|
Accrued withholding
tax
|
-
|
|
215,267,363
|
|
35,559,635
|
Impairment of
investment in 51.com investment
|
240,725,709
|
|
-
|
|
-
|
|
|
|
|
|
|
Non-GAAP net
income attributable to the
Company's
shareholders:
|
1,354,338,605
|
|
1,536,033,382
|
|
253,734,637
|
|
|
|
|
|
|
Non-GAAP earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
5.72
|
|
6.41
|
|
1.06
|
Diluted
|
5.62
|
|
6.22
|
|
1.03
|
|
|
|
|
|
|
Weighted average
ordinary shares:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
236,796,818
|
|
239,652,597
|
|
239,652,597
|
Diluted
|
240,821,127
|
|
246,835,259
|
|
246,835,259
|
Statement Regarding Unaudited Condensed Financial
Information
The unaudited financial information set forth above is
preliminary and subject to potential adjustments. Adjustments
to the consolidated financial statements may be identified when
audit work has been performed for the Company's year-end audit,
which could result in significant differences from this preliminary
unaudited condensed financial information.
About Giant Interactive Group Inc.
Giant Interactive Group Inc. (NYSE: GA) is a leading
online game developer and operator in China in terms of market share, and focuses on
massively multiplayer online role playing games. Currently,
Giant operates multiple games, including the ZT Online 1
Series, ZT Online 2, Elsword, and World of
Xianxia. For more information, please visit Giant Interactive
Group on the web at www.ga-me.com.
Safe Harbor Statement
Statements in this release contain "forward-looking" statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements
and among others, include statements regarding the expected growth
of the webgame market in China and
the ability of the webgames to capture a new audience; the ability
of the Company to keep up the growth momentum and seize the
opportunities with the support of its strong teams of developers
led by industry-known chief producers and a diversified game
portfolio in the pipeline; and the timetable for testing and
release of new games and expansion packs in the Company's game
pipeline. These forward-looking statements are not historical facts
but instead represent only our belief regarding future events, many
of which, by their nature, are inherently uncertain and outside of
our control. Our actual results and financial condition and other
circumstances may differ, possibly materially, from the anticipated
results and financial condition indicated in these forward-looking
statements. Among the factors that could cause the Company's actual
results to differ from what the Company currently anticipates may
include a deterioration in the performances of the ZT Online 1
Series and ZT Online 2, unexpected delays in developing
expansion packs or in the timetable for testing and launching our
games, our dependence on the ZT Online franchise, which
currently account for the majority of our historical net revenues,
failure of our webgames, MMO pipeline games, or other
diversification or distribution efforts to grow as successful as
expected, uncertainties with respect to the PRC legal and
regulatory environments and the volatility of the markets in which
the Company operates. The financial information contained in this
release should be read in conjunction with the consolidated
financial statements and notes thereto included in our annual
report on Form 20-F for the fiscal year 2012, as filed with the
Securities and Exchange Commission on April
18, 2013, which is available on the Securities and Exchange
Commission's website at www.sec.gov. For additional information on
these and other important factors that could adversely affect our
business, financial condition, results of operations and prospects,
see "Risk Factors" beginning on page 3 of our annual report for
fiscal year 2012. Our actual results of operations for the fourth
quarter 2013 are not necessarily indicative of our operating
results for any future periods. Any projections in this release are
based on limited information currently available to the Company,
which is subject to change. Although such projections and the
factors influencing them will likely change, the Company undertakes
no obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise,
after the date of this press release. Such information speaks only
as of the date of this release.
GIANT INTERACTIVE
GROUP INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
December
31,
|
|
September 30,
|
|
December 31,
|
|
December
31,
|
|
2012
|
|
2013
|
|
2013
|
|
2013
|
|
(RMB)
|
|
(RMB)
|
|
(RMB)
|
|
(US$)
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
1,943,061,530
|
|
925,345,550
|
|
1,021,371,762
|
|
168,718,596
|
Restricted
cash
|
-
|
|
12,475,284
|
|
10,101,867
|
|
1,668,710
|
Short-term
investments
|
739,314,900
|
|
2,796,929,240
|
|
2,799,686,050
|
|
462,475,189
|
Accounts
receivable
|
12,106,819
|
|
10,139,065
|
|
15,647,868
|
|
2,584,844
|
Prepayments and other
current assets
|
236,446,037
|
|
262,070,926
|
|
285,237,701
|
|
47,117,912
|
Due from related
parties
|
7,370,022
|
|
884,442
|
|
659,190
|
|
108,890
|
Due from research and
development entity partners
|
-
|
|
450,000
|
|
-
|
|
-
|
Inventories
|
333,195
|
|
-
|
|
-
|
|
-
|
Deferred tax assets,
net
|
157,885,822
|
|
143,190,523
|
|
147,310,764
|
|
24,334,005
|
|
|
|
|
|
|
|
|
Total current
assets
|
3,096,518,325
|
|
4,151,485,030
|
|
4,280,015,202
|
|
707,008,146
|
Non-current
assets:
|
|
|
|
|
|
|
|
Property and
equipment, net
|
340,242,374
|
|
354,876,342
|
|
355,801,443
|
|
58,774,211
|
Intangible assets,
net
|
32,799,853
|
|
94,123,919
|
|
83,832,976
|
|
13,848,221
|
Due from related
parties
|
-
|
|
6,291,971
|
|
5,662,621
|
|
935,398
|
Due from research and
development entity partners
|
7,637,000
|
|
7,637,000
|
|
7,000,000
|
|
1,156,318
|
Goodwill
|
99,316,001
|
|
99,316,001
|
|
99,316,001
|
|
16,405,835
|
Long-term
investment
|
426,087,585
|
|
435,209,313
|
|
437,636,564
|
|
72,292,410
|
Available-for-sale
securities
|
78,740,916
|
|
76,277,627
|
|
74,772,662
|
|
12,351,564
|
Held-to-maturity
securities
|
190,000,000
|
|
10,000,000
|
|
10,000,000
|
|
1,651,882
|
Deferred tax assets,
net
|
25,345,455
|
|
33,890,006
|
|
11,135,275
|
|
1,839,416
|
Other
assets
|
25,541,335
|
|
1,135,833
|
|
131,250
|
|
21,681
|
|
|
|
|
|
|
|
|
Total non-current
assets
|
1,225,710,519
|
|
1,118,758,012
|
|
1,085,288,792
|
|
179,276,936
|
|
|
|
|
|
|
|
|
Total
assets
|
4,322,228,844
|
|
5,270,243,042
|
|
5,365,303,994
|
|
886,285,082
|
|
|
|
|
|
|
|
|
LIABILITIES
AND
SHAREHOLDER'S
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term
loans
|
-
|
|
618,464,173
|
|
613,323,717
|
|
101,313,860
|
Payables and accrued
expenses
|
238,594,085
|
|
191,888,027
|
|
211,321,494
|
|
34,907,824
|
Advances from
distributors
|
93,468,209
|
|
70,203,180
|
|
70,471,207
|
|
11,641,015
|
Due to related
parties
|
598,953
|
|
2,068,056
|
|
2,677,106
|
|
442,226
|
Deferred
revenue
|
486,024,501
|
|
391,365,256
|
|
365,783,894
|
|
60,423,195
|
Tax
payable
|
48,121,958
|
|
31,660,147
|
|
65,107,352
|
|
10,754,968
|
Unrecognized tax
benefit
|
47,579,967
|
|
47,579,967
|
|
47,579,967
|
|
7,859,651
|
Dividend
payable
|
-
|
|
338,754,800
|
|
-
|
|
-
|
Deferred tax
liabilities
|
112,282,639
|
|
26,097,124
|
|
336,719,532
|
|
55,622,104
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
1,026,670,312
|
|
1,718,080,730
|
|
1,712,984,269
|
|
282,964,843
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
Long-term
loans
|
-
|
|
2,928,995
|
|
2,928,995
|
|
483,836
|
Deferred tax
liabilities
|
32,311,676
|
|
110,815,337
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
Total non-current
liabilities
|
32,311,676
|
|
113,744,332
|
|
2,928,995
|
|
483,836
|
|
|
|
|
|
|
|
|
Total
liabilities
|
1,058,981,988
|
|
1,831,825,062
|
|
1,715,913,264
|
|
283,448,679
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Ordinary
shares
(Par value
US$0.0000002 per share; 500,000,000
shares authorized as
at Dec 31, 2012, Sep 30,
2013 and Dec 31, 2013
respectively; 273,110,626
shares issued
and 239,252,672 shares outstanding
at Dec 31, 2012,
273,110,626 shares issued and
239,614,272 shares
outstanding at Sep 30, 2013,
273,110,626 shares
issued and 240,499,872 shares
outstanding at Dec
31, 2013 )
|
430
|
|
430
|
|
430
|
|
71
|
Additional paid-in
capital
|
4,456,659,188
|
|
4,519,152,896
|
|
4,530,173,387
|
|
748,331,332
|
Statutory
reserves
|
48,596,713
|
|
48,596,713
|
|
51,135,968
|
|
8,447,060
|
Accumulated other
comprehensive loss
|
(368,723,831)
|
|
(370,883,678)
|
|
(373,265,071)
|
|
(61,658,997)
|
Retained
earnings
|
1,087,615,133
|
|
1,167,882,932
|
|
1,337,146,037
|
|
220,880,790
|
Treasury
stock
|
(2,006,420,168)
|
|
(2,006,420,168)
|
|
(1,959,804,269)
|
|
(323,736,602)
|
|
|
|
|
|
|
|
|
Total Giant
Interactive Group Inc.'s equity
|
3,217,727,465
|
|
3,358,329,125
|
|
3,585,386,482
|
|
592,263,654
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
45,519,391
|
|
80,088,855
|
|
64,004,248
|
|
10,572,749
|
|
|
|
|
|
|
|
|
Total
shareholders' equity
|
3,263,246,856
|
|
3,438,417,980
|
|
3,649,390,730
|
|
602,836,403
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
4,322,228,844
|
|
5,270,243,042
|
|
5,365,303,994
|
|
886,285,082
|
GIANT INTERACTIVE
GROUP INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
December 31
|
|
September 30
|
|
December 31
|
|
December 31
|
|
2012
|
|
2013
|
|
2013
|
|
2013
|
|
(RMB)
|
|
(RMB)
|
|
(RMB)
|
|
(US$)
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Net
revenue:
|
|
|
|
|
|
|
|
Online
games
|
555,672,075
|
|
581,774,956
|
|
591,836,588
|
|
97,764,440
|
Licensing
revenues
|
10,032,855
|
|
7,174,788
|
|
10,122,577
|
|
1,672,131
|
Other revenue,
net
|
5,963,877
|
|
1,000,835
|
|
2,598,661
|
|
429,268
|
|
|
|
|
|
|
|
|
Total net
revenue
|
571,668,807
|
|
589,950,579
|
|
604,557,826
|
|
99,865,839
|
Cost of
services
|
(78,505,482)
|
|
(77,485,521)
|
|
(67,676,837)
|
|
(11,179,417)
|
|
|
|
|
|
|
|
|
Gross
profit
|
493,163,325
|
|
512,465,058
|
|
536,880,989
|
|
88,686,422
|
|
|
|
|
|
|
|
|
Operating
(expenses) income:
|
|
|
|
|
|
|
|
Research and
product
development
|
(96,545,750)
|
|
(75,044,463)
|
|
(87,549,490)
|
|
(14,462,145)
|
Sales and
marketing
|
(38,870,216)
|
|
(62,898,080)
|
|
(28,559,273)
|
|
(4,717,656)
|
General and
administrative
|
(34,208,506)
|
|
(35,625,697)
|
|
(33,887,461)
|
|
(5,597,810)
|
Government
financial
incentives
|
10,430,000
|
|
9,550,000
|
|
15,216,000
|
|
2,513,504
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
(159,194,472)
|
|
(164,018,240)
|
|
(134,780,224)
|
|
(22,264,107)
|
|
|
|
|
|
|
|
|
Income from
operations
|
333,968,853
|
|
348,446,818
|
|
402,100,765
|
|
66,422,315
|
|
|
|
|
|
|
|
|
Interest
income
|
26,552,367
|
|
19,401,766
|
|
38,633,082
|
|
6,381,731
|
Investment
income/(loss)
|
(243,937,113)
|
|
-
|
|
4,519,737
|
|
746,607
|
Other income,
net
|
9,269,933
|
|
4,731,163
|
|
23,412,
936
|
|
3,867,542
|
|
|
|
|
|
|
|
|
Income before income
tax expenses
|
125,854,040
|
|
372,579,747
|
|
468,666,520
|
|
77,418,195
|
|
|
|
|
|
|
|
|
Income tax
expenses
|
(28,686,961)
|
|
(466,685)
|
|
(237,780,251)
|
|
(39,278,499)
|
Share of loss of
equity
investees
|
(424,473)
|
|
(1,827,316)
|
|
(629,349)
|
|
(103,961)
|
|
|
|
|
|
|
|
|
Net
income
|
96,742,606
|
|
370,285,746
|
|
230,256,920
|
|
38,035,735
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
(14,052,307)
|
|
(14,529,296)
|
|
(26,659,424)
|
|
(4,403,823)
|
|
|
|
|
|
|
|
|
Net income
attributable to
the Company's
shareholders
|
82,690,299
|
|
355,756,450
|
|
203,597,496
|
|
33,631,912
|
|
|
|
|
|
|
|
|
Other
comprehensive
income/(loss), net of
tax
|
|
|
|
|
|
|
|
Foreign currency
translation
|
(2,863,700)
|
|
(162,661)
|
|
(1,507,849)
|
|
(249,079)
|
Unrealized holding
gains
(losses)
|
42,618,830
|
|
99,129
|
|
(873,544)
|
|
(144,299)
|
Total other
comprehensive
income/(loss), net of
tax
|
39,755,130
|
|
(63,532)
|
|
(2,381,393)
|
|
(393,378)
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
122,445,429
|
|
355,692,918
|
|
201,216,103
|
|
33,238,534
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.35
|
|
1.48
|
|
0.85
|
|
0.14
|
Diluted
|
0.34
|
|
1.44
|
|
0.82
|
|
0.14
|
|
|
|
|
|
|
|
|
Weighted average
ordinary shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
238,308,804
|
|
239,582,227
|
|
240,198,365
|
|
240,198,365
|
Diluted
|
243,966,387
|
|
247,718,392
|
|
248,241,798
|
|
248,241,798
|
GIANT INTERACTIVE
GROUP INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
For the year
ended
|
|
December 31
|
|
December 31
|
|
December 31
|
|
2012
|
|
2013
|
|
2013
|
|
(RMB)
|
|
(RMB)
|
|
(US$)
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
Net
revenue:
|
|
|
|
|
|
Online games
|
2,074,950,188
|
|
2,309,280,670
|
|
381,465,991
|
Licensing
revenues
|
52,186,105
|
|
41,901,953
|
|
6,921,710
|
Other revenue,
net
|
24,758,274
|
|
4,287,962
|
|
708,321
|
|
|
|
|
|
|
Total net
revenue
|
2,151,894,567
|
|
2,355,470,585
|
|
389,096,022
|
|
|
|
|
|
|
Cost of
services
|
(288,361,076)
|
|
(298,660,231)
|
|
(49,335,156)
|
|
|
|
|
|
|
Gross profit
|
1,863,533,491
|
|
2,056,810,354
|
|
339,760,866
|
|
|
|
|
|
|
Operating (expenses)
income:
|
|
|
|
|
|
Research and product
development
|
(326,792,503)
|
|
(320,981,132)
|
|
(53,022,306)
|
Sales and
marketing
|
(146,452,268)
|
|
(175,768,566)
|
|
(29,034,899)
|
General and
administrative
|
(148,708,274)
|
|
(135,747,942)
|
|
(22,423,963)
|
Government financial
incentives
|
63,644,000
|
|
44,766,000
|
|
7,394,816
|
|
|
|
|
|
|
Total operating
expenses
|
(558,309,045)
|
|
(587,731,640)
|
|
(97,086,352)
|
|
|
|
|
|
|
Income from
operations
|
1,305,224,446
|
|
1,469,078,714
|
|
242,674,514
|
|
|
|
|
|
|
Interest
income
|
105,833,413
|
|
128,619,486
|
|
21,246,425
|
Investment
income/(loss)
|
(243,626,993)
|
|
8,231,124
|
|
1,359,685
|
Other income,
net
|
34,844,307
|
|
32,861,183
|
|
5,428, 281
|
|
|
|
|
|
|
Income before income
tax expenses
|
1,202,275,173
|
|
1,638,790,507
|
|
270,708,905
|
|
|
|
|
|
|
Income tax
expenses
|
(124,203,884)
|
|
(296,622,358)
|
|
(48,998,523)
|
Share of loss of equity
investees
|
(6,117,163)
|
|
(6,388,717)
|
|
(1,055,341)
|
|
|
|
|
|
|
Net
income
|
1,071,954,126
|
|
1,335,779,432
|
|
220,655,041
|
|
|
|
|
|
|
Net income attributable
to noncontrolling
interest
|
(78,234,120)
|
|
(82,811,504)
|
|
(13,679,486)
|
|
|
|
|
|
|
Net income
attributable to the Company's
shareholders
|
993,720,006
|
|
1,252,967,928
|
|
206,975,555
|
|
|
|
|
|
|
Other comprehensive
income/(loss),
net
of tax
|
|
|
|
|
|
Foreign currency
translation
|
2,735,104
|
|
(2,926,501)
|
|
(483,424)
|
Unrealized holding
gains (losses)
|
29,770,851
|
|
(1,614,739)
|
|
(266,736)
|
|
|
|
|
|
|
Total other
comprehensive income/(loss),
net of tax
|
32,505,955
|
|
(4,541,240)
|
|
(750,160)
|
|
|
|
|
|
|
Comprehensive
income
|
1,026,225,961
|
|
1,248,426,688
|
|
206,225,395
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
4.20
|
|
5.23
|
|
0.86
|
Diluted
|
4.13
|
|
5.08
|
|
0.84
|
|
|
|
|
|
|
Weighted average
ordinary shares:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
236,796,818
|
|
239,652,597
|
|
239,652,597
|
Diluted
|
240,821,127
|
|
246,835,259
|
|
246,835,259
|
SOURCE Giant Interactive Group Inc.