Perfect World Announces Fourth Quarter And Fiscal Year 2009 Unaudited Financial Results
BEIJING, Mar. 1 /PRNewswire-Asia/ -- Perfect World Co., Ltd. (Nasdaq: PWRD) ("Perfect World" or the "Company"), a leading online game developer and operator based in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2009.
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Fourth Quarter 2009 Highlights(1)
-- Total revenues were RMB607.9 million (USD89.1 million), an increase of
3.0% from 3Q09 and 45.5% from 4Q08
-- Gross profit was RMB526.4 million (USD77.1 million), an increase of
6.3% from 3Q09 and 42.9% from 4Q08
-- Operating profit was RMB276.5 million (USD40.5 million), as compared to
RMB297.7 million in 3Q09 and RMB149.5 million in 4Q08. Non-GAAP
operating profit(2) was RMB298.5 million (USD43.7 million), as compared
to RMB317.9 million in 3Q09 and RMB244.7 million in 4Q08
-- Net income attributable to the Company's shareholders was RMB270.8
million (USD39.7 million), as compared to RMB288.3 million in 3Q09 and
RMB124.8 million in 4Q08. Non-GAAP net income attributable to the
Company's shareholders(2) was RMB292.8 million (USD42.9 million), as
compared to RMB308.5 million in 3Q09 and RMB220.0 million in 4Q08
-- Basic and diluted earnings per ADS(3) were RMB5.44 (USD0.80) and
RMB5.09 (USD0.75), respectively, as compared to RMB5.83 and RMB5.50,
respectively, in 3Q09, and RMB2.22 and RMB2.12, respectively, in 4Q08.
Non-GAAP basic and diluted earnings per ADS(2) were RMB5.88 (USD0.86)
and RMB5.50 (USD0.81), respectively, as compared to RMB6.24 and
RMB5.88, respectively, in 3Q09, and RMB3.91 and RMB3.74, respectively,
in 4Q08
-- Launched open beta testing for "Fantasy Zhu Xian" on October 22, 2009
(1) The U.S. dollar (USD) amounts disclosed in this press release, except
for those transaction amounts that were actually settled in U.S.
dollars, are presented solely for the convenience of the reader. The
conversion of Renminbi (RMB) into USD in this release is based on the
noon buying rate in The City of New York for cable transfers in RMB
per USD as certified for customs purposes by the Federal Reserve Bank
of New York as of December 31, 2009, which was RMB6.8259 to USD1.00.
The percentages stated in this press release are calculated based on
the RMB amounts.
(2) As used in this press release, non-GAAP operating profit, non-GAAP net
income attributable to the Company's shareholders and non-GAAP
earnings per ADS are defined to exclude share-based compensation
charge and an in-process research and development charge related to
the InterServ acquisition in October 2008 (which was recorded only in
4Q08) from operating profit, net income attributable to the Company's
shareholders and earnings per ADS, respectively. See "Non-GAAP
Financial Measures" and "Reconciliation of GAAP and Non-GAAP
Results" at the end of this press release.
(3) Each ADS represents five ordinary shares.
Fiscal Year 2009 Financial Highlights
-- Total revenues were RMB2,144.4 million (USD314.2 million), an increase
of 49.2% from fiscal year 2008
-- Gross profit was RMB1,844.6 million (USD270.2 million), an increase of
46.2% from fiscal year 2008
-- Operating profit was RMB1,084.2 million (USD158.8 million), an increase
of 60.1% from fiscal year 2008. Non-GAAP operating profit was
RMB1,162.1 million (USD170.3 million), an increase of 44.3% from fiscal
year 2008
-- Net income attributable to the Company's shareholders was RMB1,037.2
million (USD152.0 million), an increase of 60.4% from fiscal year 2008.
Non-GAAP net income attributable to the Company's shareholders was
RMB1,115.1 million (USD163.4 million), an increase of 43.9% from fiscal
year 2008
-- Basic and diluted earnings per ADS were RMB20.57 (USD3.01) and RMB19.28
(USD2.82), respectively, as compared to RMB11.50 and RMB10.91,
respectively, in fiscal year 2008. Non-GAAP basic and diluted earnings
per ADS were RMB22.11 (USD3.24) and RMB20.73 (USD3.04), respectively,
as compared to RMB13.79 and RMB13.08, respectively, in fiscal year 2008
"We are pleased to announce our fourth quarter and full year 2009 results," commented Mr. Michael Chi, Chairman and Chief Executive Officer of Perfect World. "We had a great year as we successfully expanded our portfolio by launching our first 2.5D MMORPG 'Battle of the Immortals' and our first 2D turn-based MMORPG 'Fantasy Zhu Xian,' both of which quickly emerged as popular games in the market. Our existing games also contributed to our encouraging results as we continued to enhance game content by releasing a steady stream of new expansion packs. 'Zhu Xian' and 'Perfect World II,' for example, are two games where new expansion packs have led to meaningful growth."
"Our diversified pipeline of six truly differentiated games that span the 3D, 2.5D and 2D market segments highlights our competitive position in the online game industry. We continue to take advantage of our specialized game engines and production studios to build franchises that include flagship titles in each of these market segments."
"During the past year, we saw a considerable amount of growth in our overseas business and are pleased with our progress. We continued to strengthen our overseas network as we licensed more of our games to additional countries and regions. Our North American operation has seen significant expansion as we also introduced new games to the market through our wholly-owned U.S. subsidiary. We are the leader in the Chinese online game export market in terms of revenues and geographic coverage."
"Given what we have accomplished in North America so far, we are pleased to announce that we recently established a wholly-owned subsidiary in Europe. This strategic decision will not only allow us to capture growth opportunities in the European market by leveraging our experience in the North American markets, but will also expand our overseas operational capabilities."
"We believe that 2010 will be an exciting year for us as we have a number of new and diversified games and expansion packs that are scheduled to be launched. We will continue to dedicate more resources to longer-term projects as our modified strategy has demonstrated to be effective in lengthening the growth cycle of both our new and existing games. We aspire to sustain the steady growth of our Company, and will do so by utilizing our proven execution capabilities and strong R&D and operating platform to constantly strive to meet the varied interests and expectations of online game players around the world."
Fourth Quarter 2009 Financial Results
Total Revenues
Total revenues were RMB607.9 million (USD89.1 million) in 4Q09, an increase of 3.0%, or RMB17.9 million, from RMB590.0 million in 3Q09, and an increase of 45.5%, or RMB190.1 million, from RMB417.8 million in 4Q08.
Online game operation revenues were RMB541.8 million (USD79.4 million) in 4Q09, an increase of 11.5%, or RMB55.9 million, from RMB485.9 million in 3Q09, and an increase of 49.4%, or RMB179.2 million, from RMB362.6 million in 4Q08. The sequential growth in online game operation revenues was primarily attributable to a number of achievements, including the launch of "Fantasy Zhu Xian," the release of expansion packs for some of the Company's existing games and a series of marketing activities.
The aggregate average concurrent users (ACU) for games under operation in mainland China was approximately 1,157,000 in 4Q09, as compared to 713,000 in 3Q09 and 690,000 in 4Q08. The active paying customers (APC) for games operated in mainland China under the item-based revenue model was approximately 2,188,000 in 4Q09, as compared to 1,643,000 in 3Q09 and 1,546,000 in 4Q08. The average revenue per active paying customer (ARPU) for games operated in mainland China under the item-based revenue model was RMB223 in 4Q09, as compared to RMB266 in 3Q09 and RMB225 in 4Q08. The increase in ACU and APC from 3Q09 was mainly due to the strong performance of the newly launched "Fantasy Zhu Xian" and the continued popularity of a number of the Company's existing games. The decrease in ARPU from 3Q09 was mainly due to the dilution effect arising from the launch of "Fantasy Zhu Xian" during 4Q09.
Overseas licensing revenues were RMB61.7 million (USD9.0 million) in 4Q09, as compared to RMB58.8 million in 3Q09 and RMB55.2 million in 4Q08. The increase from 3Q09 was mainly due to an increase in usage-based royalty fees, and was partially offset by a decrease in initial license fees.
Film, television and other revenues were RMB4.5 million (USD0.7 million) in 4Q09, as compared to RMB45.3 million in 3Q09 and Nil in 4Q08. Most of the film, television and other revenues recognized in 4Q09 were related to licensing of the copyright for the movie "Sophie's Revenge," which was released in August 2009.
Cost of Revenues
The cost of revenues was RMB81.5 million (USD11.9 million) in 4Q09, as compared to RMB95.0 million in 3Q09 and RMB49.3 million in 4Q08.
The online game related cost was RMB79.8 million (USD11.7 million) in 4Q09, as compared to RMB68.0 million in 3Q09 and RMB49.3 million in 4Q08. The increase from 3Q09 was mainly due to increases in sales-related taxes and staff cost.
The film, television and other cost was RMB1.7 million (USD0.3 million) in 4Q09, as compared to RMB27.0 million in 3Q09 and Nil in 4Q08. Most of the film, television and other cost recognized in 4Q09 was related to the movie "Sophie's Revenge."
Gross Profit and Gross Margin
Gross profit was RMB526.4 million (USD77.1 million) in 4Q09, an increase of 6.3%, or RMB31.4 million, from RMB495.0 million in 3Q09, and an increase of 42.9%, or RMB157.9 million, from RMB368.5 million in 4Q08. Gross margin was 86.6% in 4Q09, as compared to 83.9% in 3Q09 and 88.2% in 4Q08.
Operating Expenses
Operating expenses were RMB249.8 million (USD36.6 million) in 4Q09, an increase of 26.6%, or RMB52.5 million, from RMB197.3 million in 3Q09, and an increase of 14.1%, or RMB30.9 million, from RMB218.9 million in 4Q08. The increase in operating expenses from 3Q09 was mainly attributed to higher sales and marketing expenses, R&D expenses and general and administrative expenses.
Sales and marketing expenses increased by 41.7%, or RMB36.7 million, from RMB88.0 million in 3Q09 to RMB124.7 million (USD18.3 million) in 4Q09. This was largely due to an increase in advertising and promotional expenses associated with both the launch of the new game "Fantasy Zhu Xian" and the launch of "Tale of the Mermaid," a large-scale expansion pack for "Perfect World II," during 4Q09. In addition, the Company also incurred a special charge of approximately RMB17.5 million (USD2.6 million) associated with a change in the estimated useful lives of certain intangible assets acquired from InterServ which are related to outsourcing services. The Company re-allocated and integrated most of the acquired outsourcing team into its game R&D business to further enhance the Company's R&D capabilities.
R&D expenses increased by 7.6%, or RMB5.4 million, from RMB71.5 million in 3Q09 to RMB76.9 million (USD11.3 million) in 4Q09. The increase from 3Q09 was primarily due to an increase in staff cost.
General and administrative expenses increased by 27.7%, or RMB10.5 million, from RMB37.8 million in 3Q09 to RMB48.3 million (USD7.1 million) in 4Q09. The increase from 3Q09 was mainly due to an increase in staff cost, including a special year-end bonus.
Operating Profit
Operating profit was RMB276.5 million (USD40.5 million) in 4Q09, as compared to RMB297.7 million in 3Q09 and RMB149.5 million in 4Q08. Non-GAAP operating profit was RMB298.5 million (USD43.7 million) in 4Q09, as compared to RMB317.9 million in 3Q09 and RMB244.7 million in 4Q08. The decrease from 3Q09 was mainly due to the special charge of approximately RMB17.5 million (USD2.6 million) associated with a change in the estimated useful lives of certain intangible assets acquired from InterServ which are related to the outsourcing services. In addition, the launch of new game "Fantasy Zhu Xian" and "Tale of the Mermaid," a large-scale expansion pack for "Perfect World II," both during 4Q09, also caused an increase of advertising and promotional expenses.
Total Other Income
Total other income was RMB11.8 million (USD1.7 million) in 4Q09, as compared to RMB2.4 million in 3Q09 and RMB8.9 million in 4Q08. The increase from 3Q09 was mainly due to recognition of certain government financial incentives in 4Q09.
Income Tax Expense
Income tax expense was RMB17.5 million (USD2.6 million) in 4Q09, as compared to RMB11.1 million in 3Q09 and RMB33.6 million in 4Q08. The increase from 3Q09 was mainly due to an increase in withholding tax on overseas licensing revenues and an increase in income tax associated with domestic online game operations.
Net Income Attributable to the Company's Shareholders
Net income attributable to the Company's shareholders was RMB270.8 million (USD39.7 million) in 4Q09, as compared to RMB288.3 million in 3Q09 and RMB124.8 million in 4Q08. Non-GAAP net income attributable to the Company's shareholders was RMB292.8 million (USD42.9 million) in 4Q09, as compared to RMB308.5 million in 3Q09 and RMB220.0 million in 4Q08.
Basic and diluted earnings per ADS were RMB5.44 (USD0.80) and RMB5.09 (USD0.75), respectively, in 4Q09, as compared to RMB5.83 and RMB5.50, respectively, in 3Q09, and RMB2.22 and RMB2.12, respectively, in 4Q08. Non-GAAP basic and diluted earnings per ADS were RMB5.88 (USD0.86) and RMB5.50 (USD0.81), respectively, in 4Q09, as compared to RMB6.24 and RMB5.88, respectively, in 3Q09, and RMB3.91 and RMB3.74, respectively, in 4Q08.
Cash and Cash Equivalents
As of December 31, 2009, the Company had RMB1,567.2 million (USD229.6 million) of cash and cash equivalents, as compared to RMB1,194.0 million as of September 30, 2009. The increase was mainly due to net cash inflow generated from the Company's online game operations.
Fiscal Year 2009 Financial Results
Total Revenues
Total revenues were RMB2,144.4 million (USD314.2 million) in fiscal year 2009, an increase of 49.2%, or RMB707.2 million, from RMB1,437.2 million in fiscal year 2008. The year-over-year increase was primarily due to the successful launch of a number of new games and expansion packs in mainland China and, to a lesser extent, a significant expansion in the Company's North American operation. Online game operation revenues were RMB1,879.9 million (USD275.4 million) in fiscal year 2009, an increase of 50.3%, or RMB629.0 million, from RMB1,251.0 million in fiscal year 2008. Overseas licensing revenues were RMB214.6 million (USD31.4 million) in fiscal year 2009, an increase of 15.3%, or RMB28.4 million, from RMB186.2 million in fiscal year 2008. Film, television and other revenues were RMB49.8 million (USD7.3 million) in fiscal year 2009, as compared to Nil in fiscal year 2008. Most of the film, television and other revenues recognized in fiscal year 2009 were related to the movie "Sophie's Revenge," which was released in August 2009.
Cost of Revenues
Cost of revenues were RMB299.8 million (USD43.9 million) in fiscal year 2009, an increase of 71.0%, or RMB124.5 million, from RMB175.3 million in fiscal year 2008. The year-over-year increase was primarily due to increases in sales-related taxes and staff cost associated with the expansion of the Company's game portfolio, and a film cost related to "Sophie's Revenge."
Gross Profit and Gross Margin
Gross profit was RMB1,844.6 million (USD270.2 million) in fiscal year 2009, an increase of 46.2%, or RMB582.7 million, from RMB1,261.9 million in fiscal year 2008. Gross margin was 86.0% in fiscal year 2009, as compared to 87.8% in fiscal year 2008.
Operating Expenses
Operating expenses were RMB760.4 million (USD111.4 million) in fiscal year 2009, an increase of 30.0%, or RMB175.5 million, from RMB584.8 million in fiscal year 2008. The year-over-year increase in operating expenses was mainly due to the expansion of the Company's overall business operations in 2009.
Operating Profit
Operating profit was RMB1,084.2 million (USD158.8 million) in fiscal year 2009, an increase of 60.1%, or RMB407.1 million, from RMB677.1 million in fiscal year 2008. Non-GAAP operating profit was RMB1,162.1 million (USD170.3 million) in fiscal year 2009, an increase of 44.3%, or RMB356.7 million, from RMB805.4 million in fiscal year 2008.
Net Income Attributable to the Company's Shareholders
Net income attributable to the Company's shareholders was RMB1,037.2 million (USD152.0 million) in fiscal year 2009, an increase of 60.4%, or RMB390.7 million, from RMB646.5 million in fiscal year 2008. Non-GAAP net income attributable to the Company's shareholders was RMB1,115.1 million (USD163.4 million) in fiscal year 2009, an increase of 43.9%, or RMB340.3 million, from RMB774.8 million in fiscal year 2008.
Basic and diluted earnings per ADS were RMB20.57 (USD3.01) and RMB19.28 (USD2.82), respectively, in fiscal year 2009, as compared to RMB11.50 and RMB10.91, respectively, in fiscal year 2008. Non-GAAP basic and diluted earnings per ADS were RMB22.11 (USD3.24) and RMB20.73 (USD3.04), respectively, in fiscal year 2009, as compared to RMB13.79 and RMB13.08, respectively, in fiscal year 2008.
Recent Development
Established Subsidiary in Europe
In January 2010, the Company established a wholly-owned subsidiary in Europe to expand its overseas operating capabilities.
Business Outlook
Based on the Company's current operations, total revenues for the first quarter of 2010 are expected to be between RMB620 million and RMB644 million, representing an increase of 2% to 6% on a sequential basis and an increase of 46% to 51% on a year-over-year basis. This reflects expected growth from the Company's existing games.
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with generally accepted accounting principals in the United States, or GAAP, this press release presents non-GAAP operating profit, non-GAAP net income attributable to the Company's shareholders and non-GAAP earnings per ADS by excluding share-based compensation charge and an in-process research and development charge related to the InterServ acquisition in October 2008 (which was recorded only in 4Q08) from operating profit, net income attributable to the Company's shareholders and earnings per ADS, respectively. The Company believes these non-GAAP financial measures are important to help investors understand the Company's operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company's core operating results, as they exclude certain expenses that are (i) not expected to result in cash payments or (ii) non-recurring in nature. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation charge has been and will continue to be incurred and is not reflected in the presentation of the non-GAAP financial measures. It should be considered in the overall evaluation of our results. None of the non-GAAP measures is a measure of net income attributable to the Company's shareholders, operating profit, operating performance or liquidity presented in accordance with GAAP. We compensate for these limitations by providing the relevant disclosure of our share-based compensation charge and an in-process research and development charge related to the InterServ acquisition in October 2008 in our reconciliations to the GAAP financial measures, which should be considered when evaluating our performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure are set forth at the end of this release.
Conference Call
Perfect World will host a conference call and live webcast at 7:00 am Eastern Standard Time (8:00 pm, Beijing time) on Monday, March 1, 2010.
The dial-in details for the live conference call are as follows:
- U.S. Toll Free Number: 1-866-519-4004
- International Dial-in Number: +65-6735-7955
- Mainland China Toll Free Number: 10-800-819-0121
- Hong Kong Toll Free Number: 80-093-0346
- U.K. Toll Free Number: 080-8234-6646
Conference ID: PWRD
A live and archived webcast of the conference call will be available on the Investor Relations section of Perfect World's website at http://www.pwrd.com .
A telephone replay of the call will be available after the conclusion of the conference call through 10:00 am Eastern Standard Time, March 8, 2010.
The dial-in details for the replay are as follows:
- U.S. Toll Free Number: 1-866-214-5335
- International Dial-in Number: +61-2-8235-5000
Conference ID: 7973 (PWRD)
About Perfect World Co., Ltd. (http://www.pwrd.com )
Perfect World Co., Ltd. (NASDAQ: PWRD) is a leading online game developer and operator based in China. Perfect World primarily develops online games based on proprietary game engines and game development platforms. The Company's strong technology and creative game design capabilities, combined with extensive knowledge and experiences in the online game market, enable it to frequently introduce popular games that are designed to cater to changing customer preferences and market trends promptly. The Company's current portfolio of self-developed online games includes massively multiplayer online role playing games ("MMORPGs"): "Perfect World," "Legend of Martial Arts," "Perfect World II," "Zhu Xian," "Chi Bi," "Pocketpet Journey West," "Battle of the Immortals" and "Fantasy Zhu Xian;" and an online casual game: "Hot Dance Party." While a substantial portion of the revenues are generated in China, the Company's games have been licensed to leading game operators in a number of countries and regions in Asia, Europe and South America. The Company also generates revenues from game operation in North America. The Company plans to continue to explore new and innovative business models and remains deeply committed to maximizing shareholder value over time.
Safe Harbor Statements
This press release contains forward-looking statements. These statements constitute forward-looking statements under the U.S. 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. Among other things, the management's quotations and "Business Outlook" contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, our limited operating history, our ability to develop and operate new games that are commercially successful, the growth of the online game market and the continuing market acceptance of our games and in- game items in China and elsewhere, our ability to protect our intellectual property rights, our ability to respond to competitive pressure, our ability to maintain an effective system of internal control over financial reporting, changes of the regulatory environment in China, and economic slowdown in China and/or elsewhere. Further information regarding these and other risks is included in Perfect World's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. All information provided in this press release and in the attachments is as of March 1, 2010, and Perfect World does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Perfect World Co., Ltd.
Consolidated Balance Sheets
Audited Unaudited Unaudited
December 31, December 31, December 31,
2008 2009 2009
RMB RMB USD
Assets
Current assets
Cash and cash equivalents 1,333,075,731 1,567,165,156 229,590,993
Restricted cash 150,361,200 5,033,996 737,485
Short-term investments 50,000,000 30,000,000 4,395,025
Accounts receivable, net 38,822,355 90,435,732 13,248,910
Due from related parties -- 159,100 23,308
Prepayment and other assets 36,269,524 54,262,066 7,949,438
Deferred tax assets 1,734,207 3,048,654 446,630
Total current assets 1,610,263,017 1,750,104,704 256,391,789
Non current assets
Equity investments 22,559,975 30,471,237 4,464,061
Film and television cost -- 14,508,195 2,125,463
Property, equipment, and
software, net 169,399,817 244,069,532 35,756,388
Construction in progress 714,083,386 771,265,335 112,991,010
Intangible assets, net 26,188,873 36,930,233 5,410,310
Goodwill -- 116,256,000 17,031,600
Prepayments and other assets 18,702,700 42,516,514 6,228,704
Deferred tax assets 1,090,526 2,895,739 424,228
Total assets 2,562,288,294 3,009,017,489 440,823,553
Liabilities and Shareholders'
Equity
Current liabilities
Accounts payable 13,629,262 92,131,878 13,497,395
Advances from customers 78,388,312 88,944,437 13,030,434
Salary and welfare payable 61,907,164 99,629,630 14,595,823
Taxes payable 20,771,786 35,503,484 5,201,290
Accrued expenses and other
liabilities 24,813,169 40,055,495 5,868,163
Share repurchase liability 386,648,554 -- --
Due to related party -- 5,650,616 827,820
Deferred revenues 223,352,994 280,584,152 41,105,811
Deferred tax liabilities 26,000,000 22,488,342 3,294,561
Deferred government grants 620,000 -- --
Total current liabilities 836,131,241 664,988,034 97,421,297
Deferred revenues 32,554,670 28,479,618 4,172,288
Other long-term payable 28,000,000 -- --
Total liabilities 896,685,911 693,467,652 101,593,585
Shareholders' Equity
Ordinary shares (US$0.0001 par
value, 10,000,000,000 shares
authorized, 72,385,480 Class A
ordinary shares issued and
outstanding, 210,350,565 Class
B ordinary shares issued and
210,147,840 Class B ordinary
shares outstanding as of
December 31, 2008;
10,000,000,000 shares
authorized, 49,171,190 Class A
ordinary shares issued and
outstanding, 199,957,195 Class
B ordinary shares issued and
outstanding as of December
31, 2009) 223,481 198,506 29,081
Additional paid-in capital 1,177,967,483 381,099,428 55,831,382
Treasury stock (391,224,203) -- --
Statutory reserves 94,945,533 181,563,507 26,599,204
Accumulated other comprehensive
loss (65,577,655) (65,453,442) (9,588,983)
Retained earnings 849,267,744 1,799,851,169 263,679,686
Total Perfect World
Shareholders' Equity 1,665,602,383 2,297,259,168 336,550,370
Non-controlling interests -- 18,290,669 2,679,598
Total Shareholders' Equity 1,665,602,383 2,315,549,837 339,229,968
Total Liabilities and
Shareholders' Equity 2,562,288,294 3,009,017,489 440,823,553
Perfect World Co., Ltd.
Consolidated Statements of Operations
Three months ended
December September December December
31, 30, 31, 31,
2008 2009 2009 2009
RMB RMB RMB USD
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Online game
operation
revenues 362,597,634 485,875,480 541,773,555 79,370,274
Overseas
licensing
revenues 55,205,269 58,788,775 61,651,444 9,031,988
Film,
television and
other revenues -- 45,329,984 4,474,322 655,492
Total Revenues 417,802,903 589,994,239 607,899,321 89,057,754
Cost of revenues
Online game
related cost (49,344,155) (68,030,548) (79,781,617) (11,688,073)
Film, television
and other cost -- (26,982,463) (1,735,088) (254,192)
Total cost of
revenues (49,344,155) (95,013,011) (81,516,705) (11,942,265)
Gross profit 368,458,748 494,981,228 526,382,616 77,115,489
Operating
expenses
Research and
development
expenses (125,870,657) (71,504,518) (76,912,046) (11,267,678)
Sales and
marketing
expenses (58,622,311) (87,999,196)(124,655,400) (18,262,119)
General and
administrative
expenses (34,416,638) (37,812,217) (48,280,933) (7,073,197)
Total operating
expenses (218,909,606)(197,315,931)(249,848,379) (36,602,994)
Operating
profit 149,549,142 297,665,297 276,534,237 40,512,495
Other
income/(expenses)
Investment loss (468,736) (1,111,787) (1,279,762) (187,486)
Interest income 7,915,676 3,338,023 5,169,231 757,297
Others, net 1,430,694 174,544 7,874,430 1,153,611
Total other
income 8,877,634 2,400,780 11,763,899 1,723,422
Profit before
tax 158,426,776 300,066,077 288,298,136 42,235,917
Income tax
expense (33,617,364) (11,052,958) (17,534,886) (2,568,875)
Net income 124,809,412 289,013,119 270,763,250 39,667,042
Less: Net
income /
(loss)
attributable
to non-
controlling
interests -- 692,008 (86,162) (12,623)
Net income
attributable to
the Company's
shareholders 124,809,412 288,321,111 270,849,412 39,679,665
Net earnings per
share, basic 0.44 1.17 1.09 0.16
Net earnings per
share, diluted 0.42 1.10 1.02 0.15
Net earnings per
ADS, basic 2.22 5.83 5.44 0.80
Net earnings per
ADS, diluted 2.12 5.50 5.09 0.75
Shares used in
calculating
basic net
earnings per
share 281,427,327 247,418,982 248,945,580 248,945,580
Shares used in
calculating
diluted net
earnings per
share 293,724,147 262,334,324 265,982,221 265,982,221
Total share-
based
compensation
cost included
in:
Cost of
revenues (1,082,339) (1,412,278) (1,149,174) (168,355)
Research and
development
expenses (8,472,731) (8,841,744) (11,363,609) (1,664,778)
Sales and
marketing
expenses (1,496,651) (2,085,910) (1,602,599) (234,782)
General and
administrative
expenses (5,717,413) (7,886,096) (7,839,431) (1,148,483)
Year ended
December 31, December 31, December 31,
2008 2009 2009
RMB RMB USD
(Audited) (Unaudited) (Unaudited)
Revenues
Online game
operation
revenues 1,250,959,689 1,879,932,736 275,411,702
Overseas
licensing
revenues 186,218,677 214,625,630 31,442,832
Film, television and
other revenues -- 49,804,306 7,296,372
Total Revenues 1,437,178,366 2,144,362,672 314,150,906
Cost of revenues
Online game
related cost (175,264,350) (271,043,328) (39,708,072)
Film, television and
other cost -- (28,717,551) (4,207,145)
Total cost of
revenues (175,264,350) (299,760,879) (43,915,217)
Gross profit 1,261,914,016 1,844,601,793 270,235,689
Operating
expenses
Research and
development
expenses (227,836,657) (270,355,072) (39,607,242)
Sales and
marketing
expenses (254,484,542) (336,316,211) (49,270,603)
General and
administrative
expenses (102,492,121) (153,684,631) (22,514,926)
Total operating
expenses (584,813,320) (760,355,914) (111,392,771)
Operating profit 677,100,696 1,084,245,879 158,842,918
Other income/(expenses)
Investment loss (1,175,025) (4,088,738) (599,004)
Interest income 35,369,600 15,404,786 2,256,814
Others, net (11,535,587) 10,422,381 1,526,887
Total other
income 22,658,988 21,738,429 3,184,697
Profit before
tax 699,759,684 1,105,984,308 162,027,615
Income tax expense (53,303,570) (68,283,268) (10,003,555)
Net income 646,456,114 1,037,701,040 152,024,060
Less: Net
income /
(loss)
attributable
to non-
controlling
interests -- 499,641 73,198
Net income
attributable to
the Company's
shareholders 646,456,114 1,037,201,399 151,950,862
Net earnings per
share, basic 2.30 4.11 0.60
Net earnings per
share, diluted 2.18 3.86 0.56
Net earnings per
ADS, basic 11.50 20.57 3.01
Net earnings per
ADS, diluted 10.91 19.28 2.82
Shares used in
calculating
basic net
earnings per
share 280,987,729 252,138,828 252,138,828
Shares used in
calculating
diluted net
earnings per
share 296,238,151 269,004,366 269,004,366
Total share-
based
compensation
cost included
in:
Cost of
revenues (3,000,334) (4,983,795) (730,130)
Research and
development
expenses (22,365,703) (36,730,329) (5,381,024)
Sales and
marketing
expenses (4,733,152) (7,290,958) (1,068,131)
General and
administrative
expenses (19,800,642) (28,883,711) (4,231,488)
Perfect World Co., Ltd.
Consolidated Statements of Cash Flows
Three months ended
December 31, September 30, December 31, December 31,
2008 2009 2009 2009
RMB RMB RMB USD
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from
operating
activities:
Net income 124,809,412 289,013,119 270,763,250 39,667,042
Adjustments
for:
Share-based
compensation
cost 16,769,134 20,226,028 21,954,813 3,216,398
Depreciation
and
amortization
expense 6,670,886 12,165,961 32,447,920 4,753,647
In-process
research and
development
charge related
to the InterServ
acquisition 78,417,506 -- -- --
Exchange (gain)
/loss (114,698) 253,453 113,749 16,664
Investment loss 468,736 1,111,787 1,279,762 187,486
Loss from
disposal of
property,
equipment, and
software 176,354 506,175 399,425 58,516
Changes in
assets and
liabilities:
Accounts
receivable (4,485,757) (72,045,828) 48,265,298 7,070,906
Current
prepayments
and other
assets 2,129,563 (4,041,415) 9,939,338 1,456,121
Deferred tax
assets (569,103) 188,516 (3,573,707) (523,551)
Film and
television cost -- 18,334,598 (14,508,195) (2,125,463)
Due from/to
related parties -- 2,129,054 (565,138) (82,793)
Non-current
prepayments
and other
assets (16,217,564) 4,514,147 747,629 109,528
Accounts
payable 5,912,994 11,435,763 1,582,299 231,808
Advances from
customers 2,280,085 38,118,600 (26,140,988) (3,829,676)
Salary and
welfare
payable 18,314,010 24,638,316 21,649,640 3,171,690
Taxes payable 632,322 (7,071,562) 8,812,168 1,290,990
Accrued expenses
and other
liabilities (4,410,129) (26,626,737) (1,137,447) (166,637)
Deferred
revenues 23,553,120 14,114,214 3,303,923 484,027
Deferred tax
liabilities 26,000,000 (11,869) 2,741,097 401,573
Deferred
government
grants (980,000) (620,000) (1,450,000) (212,426)
Net cash provided
by operating
activities 279,356,871 326,332,320 376,624,836 55,175,850
Cash flows from
investing
activities:
Purchase of
property,
equipment,
and
software (18,767,278) (59,754,724) (48,302,540) (7,076,362)
Purchase of
intangible
assets (1,351,351) -- (1,313,235) (192,390)
(Increase) /
decrease of
restricted
cash (150,361,200) -- -- --
Cash paid for
the assets
acquisition (102,852,002) -- -- --
Cash paid for
equity
investments -- -- -- --
Cash paid for
business
acquisitions,
net of cash
acquired -- -- -- --
Purchase of
short-term
investments -- (30,000,000) -- --
Maturities of
short-term
investments -- -- 40,000,000 5,860,033
Increase in
loan receivable -- -- -- --
Decrease in
loan
receivable -- 3,000,000 3,780,000 553,773
Net cash used
in investing
activities (273,331,831) (86,754,724) (5,835,775) (854,946)
Cash flows from
financing
activities:
Exercise of
share options 1,393,628 8,722,777 2,304,395 337,596
Repurchase of
Company shares (4,575,649) -- -- --
Net cash (used
in) / provided
by financing
activities (3,182,021) 8,722,777 2,304,395 337,596
Effect of
exchange rate
changes on cash
and cash
equivalents 424,155 (40,868) 87,971 12,888
Net increase /
(decrease) in
cash 3,267,174 248,259,505 373,181,427 54,671,388
Cash and cash
equivalents,
beginning of
the period 1,329,808,557 945,724,224 1,193,983,729 174,919,605
Cash and cash
equivalents,
end of the
period 1,333,075,731 1,193,983,729 1,567,165,156 229,590,993
Supplemental
schedule of
non-cash
financing
activities:
Share
repurchase
from SAIF (386,648,554) -- -- --
Supplemental
disclosures of
cash flow
information:
Cash paid
during the
period for
income taxes (7,814,467) (3,984,669) (16,849,182) (2,468,419)
Year ended
December 31, December 31, December 31,
2008 2009 2009
RMB RMB USD
(Audited) (Unaudited) (Unaudited)
Cash flows from
operating
activities:
Net income 646,456,114 1,037,701,040 152,024,060
Adjustments for:
Share-based
compensation cost 49,899,831 77,888,793 11,410,773
Depreciation and
amortization
expense 22,130,217 65,059,775 9,531,311
In-process
research and
development
charge related to
the InterServ
acquisition 78,417,506 -- --
Exchange (gain) /
loss 12,187,231 758,889 111,178
Investment loss 1,175,025 4,088,738 599,004
Loss from
disposal of
property,
equipment, and
software 176,354 956,566 140,138
Changes in assets
and liabilities:
Accounts
receivable (22,103,425) (52,172,840) (7,643,362)
Current
prepayments and
other assets (11,922,267) (15,648,807) (2,292,563)
Deferred tax
assets (1,365,895) (3,160,677) (463,042)
Film and
television cost -- 1,081,731 158,474
Due from/to
related parties -- 1,563,916 229,115
Non-current
prepayments and
other assets (16,858,536) 3,629,432 531,715
Accounts payable (831,337) 40,616,081 5,950,289
Advances from
customers 28,715,928 8,599,884 1,259,890
Salary and
welfare payable 30,996,508 36,583,927 5,359,576
Taxes payable 7,396,894 14,781,543 2,165,508
Accrued expenses
and other
liabilities 8,517,394 7,586,190 1,111,383
Deferred revenues 113,312,411 53,746,697 7,873,936
Deferred tax
liabilities 26,000,000 (3,511,658) (514,461)
Deferred
government grants (480,000) (620,000) (90,831)
Net cash provided
by operating
activities 971,819,953 1,279,529,220 187,452,091
Cash flows from
investing
activities:
Purchase of
property,
equipment, and
software (759,612,288) (164,031,139) (24,030,698)
Purchase of
intangible assets (1,351,351) (4,829,155) (707,475)
(Increase) /
decrease of
restricted cash (150,361,200) 145,351,724 21,294,148
Cash paid for the
assets
acquisition (102,852,002) -- --
Cash paid for
equity
investments (23,735,000) (10,000,000) (1,465,008)
Cash paid for
business
acquisitions, net
of cash acquired -- (172,199,707) (25,227,400)
Purchase of
short-term
investments (50,000,000) (70,000,000) (10,255,058)
Maturities of
short-term
investments -- 90,000,000 13,185,074
Increase in loan
receivable -- (3,000,000) (439,502)
Decrease in loan
receivable -- 9,980,000 1,462,078
Net cash used in
investing
activities (1,087,911,841) (178,728,277) (26,183,841)
Cash flows from
financing
activities:
Exercise of share
options 3,836,884 14,615,293 2,141,153
Repurchase of
Company shares (4,575,649) (881,456,089) (129,134,047)
Net cash (used
in) / provided by
financing
activities (738,765) (866,840,796) (126,992,894)
Effect of
exchange rate
changes on cash
and cash
equivalents (46,126,609) 129,278 18,939
Net increase /
(decrease) in
cash (162,957,262) 234,089,425 34,294,295
Cash and cash
equivalents,
beginning of the
period 1,496,032,993 1,333,075,731 195,296,698
Cash and cash
equivalents, end
of the period 1,333,075,731 1,567,165,156 229,590,993
Supplemental
schedule of non-
cash financing
activities:
Share repurchase
from SAIF (386,648,554) -- --
Supplemental
disclosures of
cash flow
information:
Cash paid during
the period for
income taxes (23,288,291) (54,963,960) (8,052,266)
Perfect World Co., Ltd.
Reconciliation of GAAP and Non-GAAP Results
Three months ended
December 31, September 30, December 31, December 31,
2008 2009 2009 2009
RMB RMB RMB USD
GAAP operating profit 149,549,142 297,665,297 276,534,237 40,512,495
Share based
compensation charge 16,769,134 20,226,028 21,954,813 3,216,398
In-process research and
development charge
related to the
InterServ acquisition
in October 2008 78,417,506 -- -- --
Non-GAAP operating
profit 244,735,782 317,891,325 298,489,050 43,728,893
GAAP net income
attributable to the
Company's shareholders 124,809,412 288,321,111 270,849,412 39,679,665
Share based
compensation charge 16,769,134 20,226,028 21,954,813 3,216,398
In-process research and
development charge
related to the
InterServ acquisition
in October 2008 78,417,506 -- -- --
Non-GAAP net income
attributable to the
Company's shareholders 219,996,052 308,547,139 292,804,225 42,896,063
GAAP net earnings per
ADS
- Basic 2.22 5.83 5.44 0.80
- Diluted 2.12 5.50 5.09 0.75
Non-GAAP net earnings
per ADS
- Basic 3.91 6.24 5.88 0.86
- Diluted 3.74 5.88 5.50 0.81
ADSs used in
calculating net
earnings per ADS
- Basic 56,285,465 49,483,796 49,789,116 49,789,116
- Diluted 58,744,829 52,466,865 53,196,444 53,196,444
Year ended
December 31, December 31, December 31,
2008 2009 2009
RMB RMB USD
GAAP operating profit 677,100,696 1,084,245,879 158,842,918
Share based compensation charge 49,899,831 77,888,793 11,410,773
In-process research and
development charge related to
the InterServ acquisition in
October 2008 78,417,506 -- --
Non-GAAP operating profit 805,418,033 1,162,134,672 170,253,691
GAAP net income attributable to
the Company's shareholders 646,456,114 1,037,201,399 151,950,862
Share based compensation charge 49,899,831 77,888,793 11,410,773
In-process research and
development charge related to
the InterServ acquisition in
October 2008 78,417,506 -- --
Non-GAAP net income attributable
to the Company's shareholders 774,773,451 1,115,090,192 163,361,635
GAAP net earnings per ADS
- Basic 11.50 20.57 3.01
- Diluted 10.91 19.28 2.82
Non-GAAP net earnings per ADS
- Basic 13.79 22.11 3.24
- Diluted 13.08 20.73 3.04
ADSs used in calculating net
earnings per ADS
- Basic 56,197,546 50,427,766 50,427,766
- Diluted 59,247,630 53,800,873 53,800,873
For further information, please contact
Perfect World Co., Ltd.
Vivien Wang
Investor Relations Officer
Tel: +86-10-5885-1813
Fax: +86-10-5885-6899
Email: [email protected]
Web: http://www.pwrd.com
Christensen Investor Relations
Kathy Li
Tel: +1-480-614-3036
Fax: +1-480-614-3033
Email: [email protected]
Roger Hu
Tel: +852-2117-0861
Fax: +852-2117-0869
Email: [email protected]
SOURCE Perfect World Co., Ltd.
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