SHANGHAI, Aug. 18 /PRNewswire-Asia/ -- 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 second quarter ended June 30, 2009.
Second Quarter 2009 Highlights: -- Net revenue was RMB364.1 million
(US$53.3 million), compared to RMB373.5 million in the first
quarter 2009 and RMB504.8 million in the second quarter 2008. --
Gross profit was RMB309.5 million (US$45.3 million), compared to
RMB313.9 million in the first quarter 2009 and RMB447.0 million in
the second quarter 2008. Gross profit margin for the second quarter
2009 was 85.0%. -- Net income attributable to the Company's
shareholders was RMB231.9 million (US$34.0 million), compared to
RMB231.9 million in the first quarter 2009 and RMB350.6 million in
the second quarter 2008. The margin of net income attributable to
the Company's shareholders for the second quarter 2009 was 63.7%.
-- Basic and diluted earnings per American Depositary Share ("ADS")
were RMB1.03 (US$0.15) and RMB0.99 (US$0.15), respectively,
compared to basic and diluted earnings per ADS of RMB1.45 and
RMB1.40, respectively, for the second quarter 2008, and basic and
diluted earnings per ADS of RMB1.03 and RMB0.99, respectively, for
the first quarter 2009. Each ADS represents one ordinary share. --
Non-GAAP net income attributable to the Company's shareholders
excluding non-cash share-based compensation was RMB239.8 million
(US$35.1 million), compared to RMB240.2 million in the first
quarter 2009 and RMB362.5 million in the second quarter 2008. The
margin of non-GAAP net income attributable to the Company's
shareholders excluding non-cash share-based compensation was 65.9%.
-- Basic and diluted non-GAAP earnings excluding non-cash
share-based compensation per ADS were RMB1.06 (US$0.16) and RMB1.03
(US$0.15), respectively, compared to basic and diluted non-GAAP
earnings per ADS of RMB1.50 and RMB1.45, respectively, for the
second quarter 2008, and basic and diluted non-GAAP earnings per
ADS of RMB1.06 and RMB1.03, respectively, for the first quarter
2009. -- Active Paying Accounts ("APA") for online games(1) in the
second quarter 2009 reached 1,204,000, a decrease of 2.6% from the
first quarter 2009 and a decrease of 31.6% from the second quarter
2008. -- Average Revenue Per User ("ARPU") for online games(1) was
RMB300.0, an increase of 0.1% from the first quarter 2009 and an
increase of 4.9% from the second quarter 2008. -- Average
Concurrent Users ("ACU") for online games(1) was 453,000, a
decrease of 14.7% from the first quarter 2009 and a decrease of
26.9% over the second quarter 2008. -- Peak Concurrent Users
("PCU") for online games(1) was 1,440,000, a decrease of 8.3% from
the first quarter 2009 and a decrease of 38.4% from the second
quarter 2008. Mr. Yuzhu Shi, Giant's Chairman and Chief Executive
Officer, comments, "In July we began testing ZT Online's newest
expansion pack called Parenthood Simulation, which gives players
the ability to simulate child bearing and parenting activities,
further increasing in-game interaction and enhancing the community
stickiness. We plan to complete the official roll out of this
expansion pack in September. Meanwhile, the development of ZT
Online Green Edition, which is an additional version of our
flagship game with a tweaked in-game economy, is near completion
and we plan to introduce this version in October. "As we work to
extend the life cycle of the ZT Online series via new updates and
expansion packs, we are also actively pursuing exciting new
opportunities to broaden our overall game portfolio. Throughout the
second quarter, we began reorganizing our R&D teams according
to their respective projects and tasks, in an effort to raise their
creativity and entrepreneurship. Efficiency has improved and our
R&D talents have been continuously focusing on and testing new
internally developed games, such as King of Kings III, ZT Online
II, My Sweetie and XT Online. Within one year, we hope to introduce
eight new games into the marketplace. "Despite near term
challenges, we believe our robust development pipeline, focused and
strong R&D capabilities, extensive sales and marketing network,
and healthy balance sheet help us to remain well positioned to
drive long-term growth." Second Quarter 2009 Unaudited Financial
Results Net Revenue. Net revenue for the second quarter 2009 was
RMB364.1 million (US$53.3 million), representing a 2.5% decrease
from RMB373.5 million in the first quarter 2009 and a 27.9%
decrease from RMB504.8 million in the second quarter 2008. Revenue
from online games(1) totaled RMB361.2 million (US$52.9 million),
representing a decrease of 2.5% from RMB370.5 million from the
first quarter 2009 and a 28.2% decrease from RMB503.3 million in
the second quarter 2008. Online game(1) net revenue decreased
sequentially, as we continue to extend the lifecycle of our
flagship ZT Online series and realign resources away from sales and
marketing efforts and towards the development of our pipeline
games. ACU for online games(1) in the second quarter 2009 was
453,000, representing a 14.7% sequential decrease and a 26.9%
decrease over the second quarter 2008. PCU for online games(1) in
the second quarter 2009 was 1,440,000, representing a 8.3%
sequential decrease and a 38.4% decrease over the second quarter
2008. ACU and PCU trended down pending introduction and acceptance
of our pipeline games and as we reduced the number and scale of our
marketing campaigns during the quarter. ARPU for online games(1) in
the second quarter 2009 increased 0.1% sequentially and 4.9%
year-over-year to RMB300.0. APA for online games(1) in the second
quarter 2009 decreased 2.6% sequentially and 31.6% year-over-year
to 1,204,000. On a sequential basis, APA exhibited some softness
due to lower user numbers, while ARPU remained stable. Cost of
Services. Cost of services was RMB54.5 million (US$8.0 million),
representing a decrease of 8.6% from the first quarter 2009 and a
5.6% decrease over the same period in 2008. The sequential fall in
cost of services consists primarily of a RMB4.3 million decrease in
sales tax associated with decreased revenue, and a RMB1.0 million
decrease in IDC cost due to more strict cost controls. The
year-over-year decrease is mainly attributable to stricter cost
management company-wide and a decline in sales tax. Gross Profit
and Gross Margin. Gross profit for the second quarter 2009 was
RMB309.5 million (US$45.3 million), representing a 1.4% sequential
decrease and a 30.8% year-over-year decrease. Gross margin for the
second quarter 2009 was 85.0%, up slightly from 84.0% in the first
quarter 2009, but down from 88.6% in the same period of 2008.
Operating Expenses. Total operating expenses for the second quarter
2009 were RMB75.1 million (US$11.0 million), representing a
decrease of 8.3% from RMB81.9 million in the first quarter 2009 and
a decline of 36.8% from RMB118.8 million in the second quarter
2008. The decreases in operating expenses are mainly attributable
to tightened cost controls across Giant's sales and marketing
operations. Research and product development expenses (R&D) for
the second quarter 2009 decreased 10.2% sequentially to RMB29.0
million (US$4.2 million) from RMB32.3 million, and increased 45.9%
year-over-year from RMB19.9 million. R&D expenses decreased
sequentially mainly due to the capitalization of certain qualifying
R&D expenses for the development of new games. The
year-over-year increase is the result of the expansion of Giant's
R&D department in order to facilitate the development of new
games and the enhancement of existing games. Sales and marketing
expenses were RMB24.2 million (US$3.5 million) in the second
quarter 2009, down 20.1% sequentially from RMB30.2 million and down
71.1% year-over-year from RMB83.6 million. The sequential and
year-over-year decreases occurred as the Company tightened cost
controls over its sales and marketing liaison personnel and reduced
the number of its marketing campaigns. General and administrative
expenses (G&A) for the second quarter 2009 were RMB31.9 million
(US$4.7 million), up 8.6% sequentially from RMB29.4 million, and up
5.3% from RMB30.3 million in the second quarter 2008. On a
sequential basis, the rise in G&A expenses was mainly
attributable to an increase in consulting fees paid for the search
and recruitment of experienced R&D teams. The year-over-year
increase in general and administrative expenses was primarily
attributable to the Company's efforts to expand its business
operations. Financial Incentive. The financial incentive received
in the second quarter 2009, which represents a sales tax refund
from the municipal government, was RMB10.0 million (US$1.5 million)
compared with RMB10.0 million in the first quarter 2009 and RMB15.0
million in the second quarter 2008. This refund relates to the
sales tax and is treated as a deduction in operating expenses.
Interest Income. Interest income for the second quarter 2009 was
RMB23.0 million (US$3.4 million), compared to RMB26.1 million in
the first quarter 2009 and RMB43.4 million in the second quarter
2008. The sequential decrease is in-line with the decrease of the
Company's cash balance and short-term investments in the second
quarter. The year-over-year decrease is also attributable to a
change in the Company's cash position as funds were used for the
non-current investment in 51.com and the share repurchase program,
as well as a decline in the market interest rate over the period.
Income Tax. Income tax expense for the second quarter 2009 was
RMB25.9 million (US$3.8 million), in line with the first quarter
2009, but an increase compared to RMB17.5 million in the second
quarter 2008. This increase was mainly due to a release of
valuation allowance in the second quarter 2008 and no such release
in the current quarter. Net Income Attributable to the Company's
shareholders. Net income attributable to the Company's shareholders
for the second quarter 2009 was RMB231.9 million (US$34.0 million),
which remained consistent compared to RMB231.9 million in the first
quarter 2009 and is a year-over-year decrease of 33.9% from
RMB350.6 million. The year-over-year decrease is attributable to
the decrease in net revenue. The margin of net income attributable
to the Company's shareholders was 63.7% for the second quarter
2009, compared to 62.1% in the first quarter 2009 and 69.5% in the
second quarter 2008. Cash, Cash Equivalents and Short-Term
Investments. As of June 30, 2009, Giant's cash, cash equivalents
and short-term investments totaled RMB5,034.4 million (US$737.1
million), compared to RMB5,211.1 million as of March 31, 2009. The
decrease in cash balance is primarily a result of the dividend
payment of US$40.6 million and the payment in the amount of US$12.5
million for the purchase of land in Zhuhai for a future research
and development center. Share Repurchase Program. In August 2008,
Giant implemented a share repurchase plan, authorizing the Company
to repurchase up to US$150.0 million of its ADSs. As of June 30,
2009, Giant had repurchased an aggregate of 16,517,985 ADSs on the
open market, for a total consideration of US$106.9 million under
this plan. The Company did not repurchase any shares during the
second quarter 2009. In August 2009, the Board of Directors
terminated the above plan and approved another share repurchase
plan, authorizing the Company to repurchase up to US$150.0 million
of its ADSs. Under the new share repurchase plan, the Company may
repurchase its shares under one year, unless further extended or
shortened by the Board of Directors, as under the board resolution
and as defined by SEC regulations. Business Highlights and Outlook
ZT Online -- Giant has continued to introduce new features and
activities for ZT Online. In July, an expansion pack called
Parenthood Simulation began being tested and has since been gaining
traction. ZT Online Classic Edition continues to perform steadily,
and will be enhanced via its own expansion pack called Unparalleled
Martial Arts. The Company is also developing a new ZT Online
version called ZT Online Green Edition. Green Edition will be
operated concurrently and independently of the existing ZT Online
games, and will employ an enhanced in-game economy to benefit lower
spending and non-paying accounts, along with additional maps,
skills, items, and other gameplay features. In Vietnam, where ZT
Online is operated by VinaGame Software Service Joint Stock
Company, the game remains very popular. Giant Online -- In the
second quarter of 2009, the Company released a feature-set for
Giant Online that encourages exploration and the pursuit of
additional equipment. Giant is currently unlocking the next
military rank for players to achieve, and this feature will be
available beginning in the third quarter 2009. King of Kings III --
King of Kings III is a 3D free-to-play medieval magical MMORPG.
During the second quarter 2009, Giant received feedback from gamers
as a result of the limited closed beta testing of the game. In
July, the Company launched the second phase of the closed beta
testing and is now fine-tuning the game in accordance with the
initial feedback, in preparation for the closed beta testing
expected to be launched in the fourth quarter 2009. ZT Online II --
The sequel to the Company's flagship game will be differentiated by
new and improved 2D graphics. New features and a revised economic
system will level the playing field for lower spending gamers, with
the aim of attracting more users. ZT Online II is slated to undergo
engineering testing towards the end of 2009. Dragon Soul -- Dragon
Soul is a 3D ancient Chinese PK MMORPG developed by Giant's
internal R&D team based in Chengdu, Sichuan. The game utilizes
a self-developed 3D engine, featuring realistic lighting and maps
with no boundaries. The game is expected to begin engineering
testing in the fourth quarter 2009. The Golden Land - The Golden
Land is a medieval strategy webgame. During the third quarter Giant
began engineering testing and optimizing the client-side and
server-side engines, as well as with the questing system. The
Company will continue to adjust and optimize the balancing of the
game. The Golden Land is expected to enter limited closed beta
testing in the third quarter and closed beta testing in the fourth
quarter 2009. Win@Giant Program -- -- My Sweetie is a 2.5D
free-to-play casual MMORPG that allows players to create virtual
characters and raise virtual pets on their PC desktops, and
interact online with other virtual pet-owners. During the second
quarter 2009, Giant overhauled My Sweetie's website, introduced
maps for higher level players, and improved the general gaming
experience. The game is currently under closed beta testing and
will continue to be enhanced. -- XT Online is a 2.5D ancient
Chinese martial arts MMORPG. Users practice different
schools/styles of martial arts to become masters, with a focus on
brotherhood and trust-building among other martial artists. During
the second quarter, Giant worked on enriching the content,
improving the artwork, and patching up various functionalities. XT
Online is currently expected to begin limited closed beta testing
in the third quarter and closed beta testing in the fourth quarter
2009. Empire of Sports -- Empire of Sports is a 3D MMORPG game
featuring a wide range of sporting events. During the second
quarter 2009, Giant began limited engineering testing with gamers
and is now revising the economic system, quantitative balancing,
and improving the user interface. Third Quarter 2009 Guidance --
Based on the current estimates, Giant expects to generate total net
revenue for the third quarter 2009 in the range of RMB310.0 million
to RMB345.0 million. Conference Call Giant's senior management will
host a conference call on Wednesday, August 19, 2009 at 8:00 am (US
Eastern Daylight Time) / 5:00 am (US Pacific Daylight Time) / 8:00
pm (Beijing Time) to discuss its second quarter 2009 financial
results and recent business activity. The conference call may be
accessed by calling +1 (866) 203 3436 (for callers in the US), +86
10 800 130 0399 (for callers in Southern China), +86 10 800 152
1490 (for callers in Northern China) or +1 (617) 213 8849 (for
callers outside of the US and China) and entering pass code
13610560. A live webcast of the conference call and replay will be
available on the investor relations page of Giant Interactive
Group's website at http://www.ga-me.com/earningsannouncements.php .
Currency Convenience Translation This release contains translations
of certain Renminbi (RMB) amounts into US dollars (US$) at the rate
of US$1.00 to RMB6.8302, which was the noon buying rate as of June
30, 2009 in the City of New York for cable transfers in Renminbi
per US dollar as certified for customs purposes by the Federal
Reserve Bank of New York. The Company makes no representation that
the Renminbi or US dollar amounts referred to in this release could
have been, or could be, converted into US dollars at such rate or
at all. Use of Non-GAAP Financial Measures Giant has reported net
income attributable to the Company's shareholders for the period
indicated below on a non-GAAP basis excluding non-cash share-based
compensation. Giant believes that both management and investors
benefit from referring to these non-GAAP financial measures in
assessing the performance of Giant and when planning and
forecasting future periods. Giant computes its non-GAAP financial
measures using the same consistent method from quarter to quarter.
Readers are cautioned not to view non-GAAP results on a stand-alone
basis or as a substitute for results under GAAP, or as being
comparable to results reported or forecasted by other companies,
and should refer to the reconciliation of GAAP results with
non-GAAP results in the attached financial information. The table
below sets forth the reconciliation of GAAP measures to non-GAAP
measures for the indicated periods: Giant Interactive Group, Inc.
Reconciliation of GAAP to Non-GAAP (Unaudited) Three months ended
June 30, March 31, June 30, June 30, 2008 2009 2009 2009 (RMB)
(RMB) (RMB) (US$) GAAP net income attributable to the Company's
shareholders: 350,581,570 231,891,563 231,900,506 33,952,228
Share-based compensation 11,880,964 8,328,351 7,896,476 1,156,112
Non-GAAP net income attributable to the Company's shareholders:
362,462,534 240,219,914 239,796,982 35,108,340 Non-GAAP earnings
per share: Basic 1.50 1.06 1.06 0.16 Diluted 1.45 1.03 1.03 0.15
Weighted average ordinary shares: Basic 241,522,046 225,953,673
225,962,544 225,962,544 Diluted 250,669,716 233,704,160 233,923,536
233,923,536 Statement Regarding Unaudited Financial Information The
unaudited financial information set forth above is preliminary and
subject to adjustments. Adjustments to the financial statements may
be identified when audit work is performed for the year-end audit,
which could result in significant differences from this preliminary
unaudited 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 according
to iResearch Consulting Group, an independent Chinese research
center, and focuses on massively multiplayer online role playing
games. Currently, Giant operates multiple games, including ZT
Online and Giant Online. Giant has eight additional online games
that it intends to launch, including ZT Online Green Edition, King
of Kings III, ZT Online II, Dragon Soul, The Golden Land, My
Sweetie, XT Online, and Empire of Sports. Giant has built a
nationwide distribution network to sell the prepaid game cards and
game points required to play its games, which as of June 30, 2009
consisted of over 290 distributors, and reached over 116,500 retail
outlets, including internet cafes, software stores, supermarkets,
bookstores, newspaper stands, and convenience stores located
throughout China. For more information, please visit Giant
Interactive Group on the web at http://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 our
estimated total net revenues for the third quarter of 2009, the
ability of ZT Online to attract players and extend its life cycle
with the expansion pack introduced in July 2009, the continuing
benefits of the reorganization of our R&D teams, our ability to
successfully commercially launch our new games, including ZT Online
Green Edition, King of Kings III, ZT Online II, Dragon Soul, The
Golden Land, My Sweetie, XT Online, and Empire of Sports, our
continued efforts to successfully operate and adjust features of
our existing games, including introduction of expansion packs, the
benefits of the Win@Giant game incubation program, the benefits of
tightened cost controls and reduction in sales and marketing
expenses, and our ability to continue to grow our business and
build long-term shareholder value. 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 our actual results to differ from what we
currently anticipate may include failure by ZT Online gamers to
resume in-game spending or continue in-game spending at historical
levels, our ability to develop, purchase or license additional
online games that are attractive to our players, our ability to
develop and successfully launch expansion packs for our online
games, our ability to adjust and enhance our online games to users'
preferences to generate revenues, our dependence on one online
game, which currently accounts for the majority of our historical
net revenues, our ability to respond to competition, our ability to
adjust to the current global economic crisis, our need to implement
and maintain effective internal control over financial reporting,
our limited operating history and unproven long-term potential of
our online game business model, our uncertainties with respect to
the PRC legal and regulatory environments and volatility in the
markets we operate in. 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 20F for the fiscal year 2008, as filed with the
Securities and Exchange Commission on June 19, 2009, and is
available on the Securities and Exchange Commission's website at
http://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 8 of our annual report for fiscal year
2008. Our actual results of operations for the second quarter 2009
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 us, which is subject to
change. Although such projections and the factors influencing them
will likely change, we undertake 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. (1) Online games include ZT Online, ZT Online PTP, ZT
Online Classic Edition, and Giant Online. GIANT INTERACTIVE GROUP,
INC. CONSOLIDATED CONDENSED BALANCE SHEETS Unaudited Unaudited
Unaudited Unaudited June 30, March 31, June 30, June 30, 2008 2009
2009 2009 (RMB) (RMB) (RMB) (US$) ASSETS Current assets: Cash and
cash equivalents 1,834,175,667 2,140,894,601 2,256,439,481
330,362,139 Prepayments and other current assets 91,577,935
50,713,103 50,845,363 7,444,198 Accounts receivable -- 614,094
1,257,511 184,110 Due from related parties 6,744,530 -- -- --
Inventories 1,163,390 903,188 832,660 121,909 Deferred tax assets
68,707,325 77,818,007 70,227,540 10,281,916 Short-term investments
3,895,399,859 3,070,208,096 2,777,975,000 406,719,423 Available-
for-sale investment -- -- 35,978,013 5,267,490 Secured promissory
note 34,295,500 -- -- -- Total current assets 5,932,064,206
5,341,151,089 5,193,555,568 760,381,185 Non-current assets:
Property and equipment, net 180,565,890 207,988,660 200,573,072
29,365,622 Intangible assets, net 87,576,747 98,747,823 110,406,132
16,164,407 Goodwill -- -- 6,224,587 911,333 Available- for-sale
investment -- 460,968,657 444,341,125 65,055,361 Deferred tax
assets -- 6,762,138 7,942,688 1,162,878 Other assets -- --
85,100,136 12,459,392 Total non- current assets 268,142,637
774,467,278 854,587,740 125,118,993 Total assets 6,200,206,843
6,115,618,367 6,048,143,308 885,500,178 LIABILITIES AND EQUITY
Current liabilities: Payables and accrued expenses 159,717,408
68,380,299 112,112,791 16,414,279 Tax payable 65,988,462 17,025,092
3,089,732 452,363 Advance from distributors 58,990,575 66,891,012
63,696,908 9,325,775 Deferred revenue 419,776,021 403,920,349
345,580,565 50,595,966 Dividends payable -- 277,591,293 -- --
Deferred tax liability -- -- 300,367 43,976 Unrecognized tax
benefits 30,911,888 5,275,364 8,761,075 1,282,697 Total current
liabilities 735,384,354 839,083,409 533,541,438 78,115,056 Total
liabilities 735,384,354 839,083,409 533,541,438 78,115,056
Commitments and contingencies Shareholders' equity Ordinary shares
(par value US$0.0000002 per share; 500,000,000 shares authorized as
at June 30, 2008, March 31, 2009 and June 30, 2009 respectively;
261,110,626 shares issued and 241,899,526 shares outstanding at
June 30, 2008, 263,110,626 shares issued and 225,599,541 shares
outstanding at March 31, 2009, 263,110,626 shares issued and
226,441,541 shares outstanding at June 30, 2009) 416 417 417 61
Additional paid-in capital 5,962,424,775 5,996,197,965
6,016,036,430 880,799,454 Statutory reserves 43,890,273 43,890,273
43,890,273 6,425,913 Accumulated other comprehensive income
(295,535,499) (166,005,942) (182,407,837) (26,706,076) Retained
earnings 1,200,650,544 1,579,244,278 1,811,144,784 265,167,167
Treasury stock (1,446,608,020) (2,176,792,033) (2,176,792,033)
(318,701,068) Total shareholders' equity 5,464,822,489
5,276,534,958 5,511,872,034 806,985,451 Non controlling interests
-- -- 2,729,836 399,671 Total equity 5,464,822,489 5,276,534,958
5,514,601,870 807,385,122 Total liabilities and equity
6,200,206,843 6,115,618,367 6,048,143,308 885,500,178 GIANT
INTERACTIVE GROUP, INC. CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) Three months ended
June 30, March 31, June 30, June 30, 2008 2009 2009 2009 (RMB)
(RMB) (RMB) (US$) Net revenue: Online game 503,270,285 370,540,346
361,187,903 52,881,014 Overseas licensing revenue 963,175 2,890,463
2,886,593 422,622 Other revenue, net 534,849 89,710 15,108 2,212
Total net revenue 504,768,309 373,520,519 364,089,604 53,305,848
Cost of services (57,760,390) (59,649,488) (54,542,858) (7,985,543)
Gross profit 447,007,919 313,871,031 309,546,746 45,320,305
Operating (expenses) income: Research and product development
expenses (19,879,930) (32,277,980) (29,000,214) (4,245,881) Sales
and marketing expenses (83,589,894) (30,248,358) (24,154,679)
(3,536,453) General and administrative expenses (30,340,315)
(29,412,868) (31,943,066) (4,676,739) Government financial
incentives 15,000,000 10,000,000 10,000,000 1,464,086 Total
operating expenses (118,810,139) (81,939,206) (75,097,959)
(10,994,987) Income from operations 328,197,780 231,931,825
234,448,787 34,325,318 Interest income 43,382,988 26,067,320
22,960,826 3,361,662 Other (expense) income (3,537,388) 5,732,693
343,347 50,269 Investment loss -- (5,970,898) -- -- Income before
income tax expenses 368,043,380 257,760,940 257,752,960 37,737,249
Income tax expenses (17,461,810) (25,869,377) (25,880,718)
(3,789,160) Net income 350,581,570 231,891,563 231,872,242
33,948,089 Loss attributable to non controlling interests -- --
28,264 4,138 Net income attributable to the Company's shareholders
350,581,570 231,891,563 231,900,506 33,952,227 Other comprehensive
income (loss) Unrealized holding gain (loss) -- 10,961,804
(14,808,606) (2,168,107) Foreign currency translation (82,588,161)
(9,730,918) (1,593,289) (233,271) Total other comprehensive loss
(income) (82,588,161) 1,230,886 (16,401,895) (2,401,378)
Comprehensive income 267,993,409 233,122,449 215,498,611 31,550,849
Earnings per share: Basic 1.45 1.03 1.03 0.15 Diluted 1.40 0.99
0.99 0.15 Weighted average ordinary shares: Basic 241,522,046
225,953,673 225,962,544 225,962,544 Diluted 250,669,716 233,704,160
233,923,536 233,923,536 For further information, please contact:
Investor Contact: Giant Interactive Group Inc. Rich Chiang, IR
Manager Tel: +86-21-6451-1258 Investor Relations (US): Taylor
Rafferty Mahmoud Siddig, Director Tel: +1-212-889-4350 Investor
Relations (HK): Taylor Rafferty Ruby Yim, Managing Director Tel:
+852-3196-3712 Media Contact: Taylor Rafferty Michael Henson,
Director Tel: +1-212-889-4350 DATASOURCE: Giant Interactive Group
Inc. CONTACT: Investor Contact: Rich Chiang, IR Manager, Giant
Interactive Group Inc. at +86-21-6451-1258; Investor Relations
(HK): Ruby Yim, Managing Director, Taylor Rafferty at
+852-3196-3712; Investor Relations (US): Mahmoud Siddig, Director,
Taylor Rafferty at +1-212-889-4350; Media Contact: Michael Henson,
Director, Taylor Rafferty at +1-212-889-4350 Web site:
http://www.ga-me.com/earningsannouncements.php
http://www.ga-me.com/
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