China Mobile Games and Entertainment Group Limited ("We," "CMGE" or
the "Company") (Nasdaq:CMGE), the largest publisher and a leading
developer of mobile games in China, today reported its unaudited
financial results for the fourth quarter and full year ended
December 31, 2014.
Fourth Quarter 2014 Financial Highlights
- Revenues were RMB417.8 million (US$67.3 million1), compared
with RMB146.4 million in the fourth quarter of 2013 and RMB357.6
million in the third quarter of 2014, and exceeded guidance for the
quarter of RMB380.0 million by about 10%. Revenues were 185.4%
higher year-over-year and 16.8% higher quarter-over-quarter.
- Net income attributable to China Mobile Games and Entertainment
Group Limited's ordinary shareholders ("net income attributable to
CMGE") was RMB67.4 million (US$10.9 million), compared with RMB34.2
million in the fourth quarter of 2013 and RMB75.5 million in the
third quarter of 2014.
- Non-GAAP2 net income attributable to CMGE was RMB87.9 million
(US$14.2 million), compared with RMB34.5 million in the fourth
quarter of 2013 and RMB83.2 million in the third quarter of 2014.
Non-GAAP net income attributable to CMGE was 154.8% higher
year-over-year and 5.7% higher quarter-over-quarter. In the fourth
quarter of 2014, the Company incurred an additional share-based
compensation expense of RMB12.7 million (US$2.1 million) for
performance based share options issued to employees as financial
performance targets for 2014 were achieved.
- Basic and diluted earnings per American Depositary Share3
("ADS") were RMB2.16 (US$0.35) and RMB2.04 (US$0.33), respectively,
compared with basic and diluted earnings per ADS of RMB1.28 and
RMB1.18, respectively, in the fourth quarter of 2013. Basic and
diluted earnings per ADS were RMB2.42 and RMB2.30, respectively, in
the third quarter of 2014.
- Non-GAAP basic and diluted earnings per ADS were RMB2.81
(US$0.45) and RMB2.66 (US$0.43), respectively, compared with
non-GAAP basic and diluted earnings per ADS of RMB1.28 and RMB1.19,
respectively, in the fourth quarter of 2013. Non-GAAP basic and
diluted earnings per ADS were RMB2.67 and RMB2.54, respectively, in
the third quarter of 2014.
Full Year 2014
Financial Highlights
- Revenues were RMB1,264.7 million (US$203.8 million),
representing an increase of 258.3% compared with RMB353.0 million
in 2013.
- Net income attributable to CMGE was RMB232.1 million (US$37.4
million), representing an increase of 904.8% compared with RMB23.1
million in 2013.
- Non-GAAP net income attributable to CMGE was RMB272.1 million
(US$43.9 million), representing an increase of 585.4% compared with
RMB39.7 million in 2013.
- Basic and diluted earnings per ADS were RMB7.67 (US$1.24) and
RMB7.22 (US$1.16), respectively, compared with basic and diluted
earnings per ADS of RMB0.98 and RMB0.89, respectively, in
2013.
- Non-GAAP basic and diluted earnings per ADS were RMB8.99
(US$1.45) and RMB8.47 (US$1.36), respectively, compared with
Non-GAAP basic and diluted earnings per ADS of RMB1.74 and RMB1.67,
respectively, in 2013.
- Cash and cash equivalents were RMB349.3 million (US$56.3
million) and short-term investments were RMB42.4 million (US$6.8
million) as of December 31, 2014.
Fourth Quarter Select Operating Data
- Total paying user accounts4 for social games were 6.3 million,
compared with 3.2 million in the fourth quarter of 2013 and 6.2
million in the third quarter of 2014. Average revenue per paying
user account ("ARPU") for social games was RMB47.0, compared with
RMB36.6 in the fourth quarter of 2013 and RMB45.9 in the third
quarter of 2014.
- Total paying user accounts5 for single-player games (excluding
single-player game bundles) were 7.2 million, compared with 2.8
million in the fourth quarter of 2013 and 4.0 million in the third
quarter of 2014. ARPU for single-player games (excluding
single-player game bundles) was RMB12.8, compared with RMB7.4 in
the fourth quarter of 2013 and RMB17.2 in the third quarter of
2014.
- Total subscriptions6 for single-player game bundles were 0.6
million in the fourth quarter of 2014, compared with 1.1 million in
the fourth quarter of 2013 and 0.6 million in the third quarter of
2014. Average revenue per subscription for single-player game
bundles was RMB4.7, compared with RMB4.9 in the fourth quarter of
2013 and RMB4.9 in the third quarter of 2014.
- Average monthly active users ("MAUs")7 for the fourth quarter
of 2014 were 71.5 million, compared with 28.0 million in the fourth
quarter of 2013 and 36.6 million in the third quarter of 2014.
Average daily active users ("DAUs")8 for the fourth quarter of 2014
were 6.9 million, compared with 9.8 million in the fourth quarter
of 2013 and 5.3 million in the third quarter of 2014.
Full Year 2014 Select Operating Data
- Total paying user accounts for social games were 21.1 million,
a significant increase from 7.7 million in 2013. Full-year ARPU was
RMB43.8, compared with RMB28.9 in 2013.
- Total paying user accounts for single-player games (excluding
game bundles) were 18.5 million, compared with 13.7 million in the
2013. Full-year ARPU was RMB14.4, compared with RMB4.3 in
2013.
- Total subscriptions for bundles were 3.2 million in 2014,
a decrease from 6.1 million in 2013, and average revenue per
subscription was RMB4.1, compared with RMB5.1 in 2013.
- Average MAUs for 2014 were 36.7 million, compared with 12.9
million in 2013. Average DAUs for 2014 were 4.7 million, compared
with 1.7 million in 2013.
- As of 31 December 2014, the Company had a diversified portfolio
of 668 single player games and 83 social games.
"During 2014 we have achieved many significant milestones," said
Mr. Ken Jian Xiao, Chief Executive Officer of CMGE. "First, we
further advanced our leadership position in the China mobile game
publishing industry, as reflected by our leading and expanding
share of gross billings according to Analysys International.
Second, we increased our revenue and Non-GAAP profitability
sequentially and on a year-to-year basis. Finally, we significantly
grew our player base, from 28.0 million MAUs in the fourth quarter
of 2013 to 71.5 million MAUs in the fourth quarter in 2014."
As of December 31, 2014, the Company had over 1,500 employees,
with offices located in Shenzhen, Guangzhou, Beijing, Chengdu,
Shanghai, Hong Kong, Taipei, Tokyo and Seoul. The Company has grown
rapidly in 2014 in both its publishing business and self-developed
games. Moreover, throughout the course of the year, the Company has
strengthened its intellectual property ("IP") and overseas
strategy. Building on the core principles of "product innovation"
and "user satisfaction," the Company has firmly established a
diverse and comprehensive mobile gaming ecosystem that includes its
self-developed games, publishing business, IP, game support
platform and distribution platform.
Publishing business
According to Analysys International, the Company ranked No. 1 in
terms of gross billings among China's mobile game
publishers for six straight quarters from July 2013 to December
2014, and was estimated to have approximately 20.1% of the mobile
game publishing's market share in China during the fourth quarter
of 2014. Since establishing our third-party publishing business in
the middle of 2013, the Company has successfully published more
than ten mobile games each with monthly gross billings over RMB10
million, including Despicable me: Minion Rush (神偷奶爸:小黄人快跑), Crisis
Action (全民枪战), Super Hero (超级英雄), Tian Tian Ying Xiong (天天英雄) and
Jue Zhan Sha Cheng (决战沙城). In particular, Jue Zhan Sha Cheng
(决战沙城), a MMORPG mobile game, has been showing improving monthly
gross billings in recent months. In addition, the Company recently
published four new games, including The King of Fighters' 97
(拳皇97对战版), Monster Hunter- the Great Hunting Quest (怪物猎人:大狩猎),
Pleasant Goat and Big Big Wolf Rush(喜羊羊快跑) and Uncharted Waters
V(大航海时代5).
Crisis Action (全民枪战), one of the world's first First Person
Shooting ("FPS") mobile games, has been very successful. In
addition, on January 29, 2015, we published Pleasant Goat and Big
Big Wolf Rush (喜羊羊快跑) ("Pleasant Goat"), the world's first 3D
running game based on the Pleasant Goat and Big Big Wolf Rush
(喜羊羊快跑) IP rights that we acquired. In its first day of launch,
Pleasant Goat reached 2.85 million downloads in a single day.
Pleasant Goat also generated monthly gross billings of over RMB20
million during its first month of being published. During February
of 2015, Uncharted Waters V (大航海时代5), which we published in
cooperation with Tecmo Koei became one of the few successful
Japanese mobile games published in China in the first quarter of
2015.
In 2014, the Company also published high-quality mobile games
outside of China. The Company has established offices in Hong Kong,
Taiwan, Korea and Japan to focus on the localization of the games
it publishes as well as actively pursue collaboration opportunities
with overseas marketing platforms. Throughout 2014, the Company
published more than 10 mobile games overseas, including in Hong
Kong, Macau, Taiwan, Korea, Thailand and Russia. Such games include
Wu Shuang San Guo (无双三国), Wonder Hero (英雄本色), Age of Tank (坦克世界),
Chao Shen Xue Yuan (超神学园), Chao Shen Lian Meng (超神联盟), Da Hua Xi
You (大话西游), Wei Shou Lai Xi (尾兽来袭), Jin Gu Bang OL (金箍棒OL) and Dark
Creator (暗黑创世神), many of which have performed well in these markets
on both Android and iOS. Rise of Darkness (全民破坏神), an MMORPG mobile
game published by Tencent in Mainland China, for which the Company
has the rights to publish in the United States, Canada, Australia
and the United Kingdom, is expected to be launched in the United
States and Canada in April of 2015. The Company currently has a
strong overseas publishing pipeline and is preparing to publish the
following games overseas in 2015: The Creator (无间狱), Blood
Reincarnation (战国阴阳师), War Valley: Age of Valor (战谷:勇者时代) and Clash
Of Galaxy.
In recognition of the success of its publishing business, for
the 2014 Golden Plume Awards, the Company was named "The 10 Best
Game Enterprises". Moreover, the Company's game Crisis Action was
named "The Most Popular Social Game".
Self-developed games
According to Analysys International, the Company was ranked a
Top 10 developer in China in both the third and the fourth quarter
of 2014. In 2014, the Company's self-developed MMORPG mobile game
Wonder Hero (英雄本色) was ranked first in popularity rankings on Kakao
Talk, Naver, T-store, N-store within 48 hours after its launch in
Korea. Currently, the Company has multiple games in its
self-development pipeline. New Legend of Sword and Fairy (新仙剑奇侠传),
co-developed with Softstar Technology (大宇资讯), will begin closed
beta testing in April of 2015. Naruto: Shinobi Masters (火影忍者:忍者大师),
co-developed with GREE, is in its final stage of development. The
Company is also currently developing a Shaolin Temple- themed ARPG
mobile game as well as a RPG game that is adapted from the popular
online fiction Ze Tian Ji (择天记) co-developed with 7Cool (无锡七酷网络).
Both games are scheduled to enter closed beta testing in Q2 2015.
In addition, in 2014, the highly anticipated ARPG mobile game The
Creator (无间狱), which the Company co-developed with Shanghai Yin He
Shu Wu (上海银河数娱), won the 2014 Unity3D Vision Award.
The Company also has numerous games in various stages of
self-development and co-development based on IP rights the Company
acquired, including, among others, One Piece: The Path of Powers
(海贼王), Samurai Showdown (侍魂), Ikkyuu San (聪明的一休), Si Da Ming Bu
(四大名捕) and Hello Kitty (凱蒂猫). These games are expected to be
launched during 2015. We are looking forward to strong overall
growth of our self-developed games in 2015.
Intellectual property
Throughout 2014, the Company established a series of strategic
partnerships with IP owners in Japan, the US and Taiwan and sourced
several classic IPs such as Naruto (火影忍者), One Piece (海贼王), Dragon
Ball Z (龙珠Z), Ikkyuu San (聪明的一休), Hello Kitty (凱蒂猫) and Samurai
Showdown (侍魂), among others. In addition, the Company made a
strategic investment in Inplay, a leading Korean developer of
mobile and PC games of which Warner Brothers is a major
shareholder.
Recently, in the area of manga, the Company has acquired the
rights from North Star Pictures to develop mobile games based on
the popular Japanese manga Fist of the North Star (北斗神拳).
In the area of classic games, the Company has been authorized by
Softstar Technology (大宇资讯) to co-develop a 3D mobile game version
of New Legend of Sword and Fairy (新仙剑奇侠传), a game that is widely
recognized as a classic Chinese culture-themed RPG. In the area of
online fiction, the Company has been authorized to develop a
hard-core mobile game based on the popular online fiction Si Da
Ming Bu Zhi Da Dui Jue (四大名捕之大对决).
Long-life-cycle product strategy
In 2014, in addition to further developing our existing
competitive products, the Company has also developed two product
lines each with long life-cycles, including poker games and
e-sports games. Both of these products performed exceptionally well
in 2014. In addition, the Company entered into a strategic
cooperation with Jin Huan Tian Lang (金环天朗), a leading mobile poker
game developer in China in which the Company made a strategic
investment in 2014, to focus on building a social platform with
multiple social functions and interactive services.
In 2014, the Company published various e-sports mobile games,
including Crisis Action (全民枪战), Charming Dancer (天天炫舞) and, King of
Fighters' 97 (拳皇97对战版). As one of the world's first FPS competitive
mobile games and an official mobile game title in the World E-sport
Championship Games, Crisis Action (全民枪战) has performed very well as
part of the regularly held online competitions titled "Hero
Leagues," which attracts many players. Another unique 3D
dance-themed game, Charming Dancer (天天炫舞), with its simple
operation, catchy characters and real-time communication tools, has
won popularity among players and was awarded the 2014 GMGC Best
Visual Award.
In addition, the Company also commenced closed beta testing on
the Android platform for the battle game The King of Fighters' 97
(拳皇97对战版) in January 2015. This version of The King of Fighters' 97
(拳皇97对战版) preserves the 36 characters from the original game while
adding exciting and upgraded visual effects and multiple game play
modes for improved player experience. Similarly, the Company will
also upgrade the arcade game Samurai Showdown 2 (侍魂 2) on Android
platforms.
Distribution
platform
In 2014, the Company's proprietary game center developed
steadily with total registered users reaching 24 million by
December 31, 2014. In addition, the Company's highest monthly
downloads and total downloads for the year were approximately 100
million and over 700 million, respectively. By pre-installing game
center applications on the handsets of users mainly from third-tier
and fourth-tier cities in China, the Company has achieved successes
in promoting its single-player games and mobile poker games. In
particular, we have achieved the annual targets we set to
pre-install our game center application and/or games on more than
80 million smartphones by the end of 2014.
In 2014, through strategic cooperation with China Unicom, the
Company has also expanded into the field of television games. In
October of 2014,the Company and International Data Group
collectively established the "Future Family Fun Alliance" on China
Unicom's WoStore (沃商店), which has aggregated over forty core
enterprises in the family entertainment industry, including content
providers, electrical appliance manufacturers, game controller
manufacturers, chipset manufacturers, third party platforms and
media, among others, to develop and distribute mobile games and
other forms of entertainment on a smart television platform.
Game support
platform
In 2014, the Company also established a game support platform.
"Super SDK" combines social chatting, cross promotion, data mining
and other functions. It links game developers with multiple
distribution channels while simultaneously increasing user
stickiness and increasing the efficiency of developers in
distributing and marketing their games. In order to further
consolidate its game support platform, the Company strategically
invested in Shenzhen Yunva Technology ("Yunva Technology") in 2014.
In the fourth quarter of 2014, Yunva Technology launched "YAYA Yu
Yin" 3.0, which has enriched the social functions and incorporated
a game distribution function. YAYA Yu Yin attracted an average
50,000 newly registered users during the fourth quarter of 2014.
For improved game experience, Super SDK has incorporated YAYA Yu
Yin. In addition, Beijing Super Flash Software Co. Ltd, in which
the Company also made a strategic investment, launched its
"Mobimirage" game engine (the "Mirage Engine") in the third quarter
of 2014. The Mirage Engine is a 2D/3D cross-platform mobile game
engine. With an average three to five month game research and
development period, it has already launched several successful
games, including Jue Zhan Sha Cheng (决战沙城), which was
self-developed by us, Heng Sao Xi You (横扫西游), which was exclusively
published by Tencent.
Integrated ecosystem focusing
on product innovation and user satisfaction
For every segment of the mobile game industry in which it is
involved, the Company has either made strategic investments or
established operating subsidiaries with a goal to develop an
integrated ecosystem focused on product innovation and user
satisfaction. Such strategic investments and subsidiaries include
Inplay, 51 PK (51PK游戏对战平台), Yunva Technology, Super Flash and Jin
Huan Tian Lang (金环天朗), among others. Among all of the Company's
investment projects, its strategic investment in Angel Fund Success
Capital (志成资本) has been instrumental in making the Company's
overall investment strategy in the mobile game industry more
complete. Since its inception in June 2014, Success Capital (志成资本)
has invested in 18 projects including in mobile game developers,
television game developers, game art production companies, game
music production companies, gaming media as well as game IP
integrators.
In 2014, with product innovation and user satisfaction as its
core principles, the Company has successfully established an
integrated ecosystem, bringing together self-developed games, game
publishing, IP, a game support platform and distribution platform.
Through this ecosystem, the Company will continue to strive to
provide players with more interesting games and high quality
services and thereby create a gaming brand to foster loyalty among
our players.
Mr. Ken Chang, the Company's Chief Financial Officer, added
"I am pleased to report that CMGE again achieved record quarterly
revenue and significant growth in operational performance in the
fourth quarter of 2014. Our game revenue grew 185.4% year-over-year
or 16.8% quarter-over-quarter, while our Non-GAAP net profit grew
146.9% year-over-year or 6.2% quarter-over-quarter. Our operating
data for social games was exceptional in the fourth quarter of
2014. Thanks to the success of social games such as Crisis Action
(全民枪战) and Jue Zhan Sha Cheng (决战沙城), MAUs have expanded
significantly from 36.6 million in the prior quarter to 71.5
million in the fourth quarter of 2014."
Fourth Quarter 2014
Results
Revenues
Total net revenues were RMB417.8 million (US$67.3 million) in
the fourth quarter of 2014, an increase of 185.4% from RMB146.4
million from the same period last year and an increase of 16.8%
from RMB357.6 million in the prior quarter. The sequential and
year-over-year increase was mainly due to the continued success of
our self-developed and published games, including the recent
successes of Jue Zhan Sha Cheng (决战沙城) and Crisis Action (全民枪战),
which have both driven an increase in the number of paying users
and ARPU. The continued success of our social games has increased
ARPU for social games by 2.4% to RMB47.0 in the fourth quarter of
2014 from RMB 45.9 in the third quarter of 2014. Meanwhile, our
single-player games have also recognized an increase of 80.0% in
paying users to 7.2 million in the fourth quarter of 2014 from 4.0
million in the third quarter of 2014.
Cost of Revenues
Cost of revenues was RMB171.7 million (US$27.7 million) in the
fourth quarter of 2014, an increase of 218.0% from RMB54.0 million
in the fourth quarter of 2013 and an increase of 36.7% from
RMB125.6 million in the third quarter of 2014. The sequential
increase was primarily due to an increase in amortization expenses
for published games and licensed IPs. The year-over-year increase
was mainly due to the increases in payments made to mobile carrier
channels and revenue sharing to distribution channels as our
overall revenue continued to grow, as well as an increase in
amortization expenses.
The Company's overall gross margin was 58.9% during the fourth
quarter of 2014, compared with 63.1% in the fourth quarter of 2013
and 64.9% in the third quarter of 2014. Gross margin decreased
quarter-over-quarter primarily as a result of the higher
amortization expenses incurred on licensing fees for published
games and licensed IPs. The year-over-year decrease was mainly due
to an increase in payments made to mobile carrier channels and
revenue sharing with distribution channels and the higher
amortization expenses.
Operating Expenses
Operating expenses were RMB183.2 million (US$29.5 million) in
the fourth quarter of 2014, compared with RMB86.0 million in the
fourth quarter of 2013 and RMB158.8 million in the third quarter of
2014. Operating expenses were 43.8% of revenues for the fourth
quarter of 2014, compared with 44.4% in the prior quarter. The
increase in operating expenses was primarily a result of higher
share-based compensation expenses. Meanwhile, operating expenses as
a percentage of revenues decreased significantly year-over-year
from 58.7% due to economies of scale, which has resulted in a
smaller increase in fixed overheads relative to a significantly
higher increase in revenues.
Selling expenses were RMB103.5 million (US$16.7 million) during
the fourth quarter of 2014, compared with RMB51.9 million in the
fourth quarter of 2013 and RMB91.4 million in the third quarter of
2014. Selling expenses as a percentage of revenues was 24.8%, which
is comparable to 25.6% for the third quarter of 2014, and decreased
from 35.5% compared to the fourth quarter of 2013. Selling expenses
as a percentage of revenues decreased year-over-year as our
revenues increased significantly year-over-year. Selling expenses
increased year-over-year and sequentially due to an increase of
revenue and an expansion of online advertising activities,
including increased game promotion through web platforms,
application stores and agents.
General and administrative expenses were RMB40.8 million (US$6.6
million) in the fourth quarter of 2014, compared with RMB14.1
million in the fourth quarter of 2013 and RMB34.9 million for the
third quarter of 2014. General and administrative expenses as a
percentage of revenues were 9.8% in the fourth quarter of 2014,
which are comparable to 9.6% in the fourth quarter of 2013 and 9.8%
in the third quarter of 2014. The sequential and year-over-year
increases were mainly due to increase in share-based compensation
expenses.
Research and development expenses were RMB38.8 million (US$6.3
million) in the fourth quarter of 2014, compared with RMB19.9
million in the fourth quarter of 2013 and RMB32.5 million in the
third quarter of 2014. Research and development expenses as a
percentage of net revenues were 9.3% in the fourth quarter of 2014,
a decrease from 13.6% from the fourth quarter of 2013 and
comparable to that of 9.1% in the third quarter of 2014. The
year-over-year decrease was due to an increase in revenues.
Share-based compensation expenses totaled RMB20.5 million
(US$3.3 million) in the fourth quarter of 2014, compared with
RMB0.3 million in the fourth quarter of 2013 and RMB6.1 million in
the third quarter of 2014. Share-based compensation expenses
increased sequentially and year-over-year primarily as a result of
additional expenses of RMB12.7 million (US$2.1 million) incurred
for the performance based share options issued to employees as
financial performance targets for 2014 were achieved.
Operating Income
As a result of the foregoing, CMGE's operating income was
RMB62.9 million (US$10.1 million) in the fourth quarter of 2014,
compared with an operating income of RMB6.4 million in the fourth
quarter of 2013, representing a 882.8% increase year-over-year and
a decrease of 14.2% compared to operating income of RMB73.3 million
in the third quarter of 2014.
Non-GAAP operating income, excluding share-based compensation,
was RMB83.4 million (US$13.4 million) during the fourth quarter of
2014, an increase of 1,144.8% compared with a non-GAAP operating
income, excluding (1) share-based compensation expenses and (2)
goodwill and intangible assets impairment loss, of RMB6.7 million
in the fourth quarter of 2013, and an increase of 3.1% compared
with non-GAAP operating income, excluding (1) share-based
compensation expenses and (2) internal investigation costs, of
RMB80.9 million in the third quarter of 2014.
Other Income
There was no material other income during the third and fourth
quarters of 2014. Other income for the fourth quarter of 2013 was
RMB10.1 million and mainly represented a gain resulting from a
business acquisition for which the purchase consideration was lower
than the fair value of the new assets acquired and liabilities
assumed.
Income Tax
The Company had an income tax benefit of RMB0.1 million (US$0.02
million) for the fourth quarter of 2014, compared with an income
tax benefit of RMB0.4 million in the third quarter of 2014 and an
income tax benefit of RMB1.1 million for the fourth quarter of
2013.
Net Income attributable to
CMGE
Net income attributable to CMGE for the fourth quarter of 2014
was RMB67.4 million (US$10.9 million), compared with net income
attributable to CMGE of RMB34.2 million in the fourth quarter
of 2013 and net income attributable to CMGE of RMB75.5 million in
the third quarter of 2014. Net income attributable to CMGE was
97.1% higher year-over-year and 10.7% lower quarter-over-quarter.
Net income attributable to CMGE was lower sequentially primarily
because of an increase in share based compensation as a result of
the additional expenses of RMB12.7 million (US$2.0 million)
incurred for the performance based share options issued to
employees as financial performance targets for 2014 were achieved.
Net income attributable to CMGE was higher year-over-year because
of higher operating profit as our revenues increased while expenses
increased to a lesser extent.
Non-GAAP net income attributable to CMGE, excluding share-based
compensation, was RMB87.9 million (US$14.2 million) during the
fourth quarter of 2014, compared with a non-GAAP net income
attributable to CMGE, excluding (1) share-based compensation
expenses and (2) goodwill and intangible assets impairment loss, of
RMB34.5 million in the fourth quarter of 2013 and non-GAAP net
income attributable to CMGE, excluding (1) share-based compensation
expenses and (2) internal investigation costs, of RMB83.2 million
in the third quarter of 2014.
Basic and Diluted Earnings per
ADS
Basic and diluted earnings per ADS during the fourth quarter of
2014 were RMB2.16 (US$0.35) and RMB2.04 (US$0.33), respectively,
compared with basic and diluted earnings per ADS of RMB1.28 and
RMB1.18, respectively, in the fourth quarter of 2013, and basic and
diluted earnings per ADS during the third quarter of 2014 of
RMB2.42 and RMB2.30, respectively.
Non-GAAP basic and diluted earnings per ADS, excluding
share-based compensation, were RMB2.81 (US$0.45) and RMB2.66
(US$0.43), respectively, during the fourth quarter of 2014,
compared with non-GAAP basic and diluted earnings per ADS,
excluding (1) share-based compensation expenses and (2) goodwill
and intangible assets impairment loss, of RMB1.28 and RMB1.19,
respectively, in the fourth quarter of 2013 and non-GAAP basic and
diluted earnings per ADS, excluding (1) share-based compensation
expenses and (2) internal investigation costs, during the third
quarter of 2014 of RMB2.67 and RMB2.54, respectively.
Cash and Cash Equivalents
As of December 31, 2014, the Company had cash and cash
equivalents of RMB349.3 million (US$56.3 million), and short-term
investments were RMB42.4 million (US$6.8 million).
Ordinary Shares
The Company had 438.3 million ordinary shares outstanding (both
Class A and Class B ordinary shares, excluding the ordinary shares
or the equivalent ADSs issued to Bank of New York Mellon as a
reservation for the future exercise of options or warrants) as of
December 31, 2014, or the equivalent of 31.3 million ADSs
outstanding.
Year Ended December 31, 2014
Compared to Year Ended December 31,
2013
Net Revenues
Our net revenues increased by 258.3% to RMB1,264.7 million
(US$203.8 million) in 2014 from RMB353.0 million in 2013. This
increase was primarily due to greater revenue contribution from
both self-developed and licensed social games resulting from our
continued marketing efforts, game development, licensing and
operation.
- Our game revenue increased by 296.2% to RMB1,264.7 million
(US$203.8 million) in 2014 from RMB319.2 million in 2013, primarily
due to continued success of our self-developed games and
other popular third party published social games
- Our handset design revenue decreased to nil from RMB33.8
million in 2013 as we shifted our focus away from handset design to
focus our resources on game development, game publishing and
distribution.
Cost of Revenues
Our cost of revenues increased by 210.2% to RMB483.9 million
(US$78.0 million) in 2014 from RMB156.0 million in 2013. This
increase was largely in line with our increase in revenues.
- Our cost of revenues attributable to games increased by 288.7%
to RMB483.9 million (US$78.0 million) in 2014 from RMB124.5 million
in 2013. This increase was primarily due to an increase in
amortization of intangible assets and game licensing fees and an
increase in payments made to mobile carrier channels and revenue
sharing with distribution channels.
- Our cost of revenues attributable to handset design decreased
to nil from RMB31.5 million in 2013 due to our shift of focus to
game development, game publishing and distribution.
Gross Profit and Gross Margin
As a result of the foregoing, our gross profit increased by
296.4% to RMB780.8 million (US$125.8 million) in 2014 from RMB197.0
million in 2013. Our gross margin increased to 61.7% in 2014 from
55.8% in 2013. This increase is attributable primarily to growth in
our games publishing business, as the amount paid to mobile game
developers is netted off against revenue and not booked under cost
of revenues. In addition, the percentage of fixed amortization
costs also decreased in relation to the increase in revenue.
- Our gross profit attributable to games increased by 301.0% to
RMB780.8 million in 2014 from RMB194.7 million in 2013. Our gross
margin attributable to games increased to 61.7% in 2014 from 61.0%
in 2013.
- Due to our shift in focus to game development, game publishing
and distribution, we had nil gross profit attributable to handset
design in 2014. The gross profit attributable to handset design was
RMB2.3 million in 2013.
Operating Expenses
Our total operating expenses increased by 151.7% to RMB563.4
million (US$90.8 million) in 2014 from RMB223.8 million in 2013.
This increase was primarily due to an increase in selling expenses
and general and administrative expenses.
- Selling expenses increased by 189.1% to RMB320.9 million
(US$51.7 million) in 2014 from RMB111.0 million in 2013. Selling
expenses increased due to an increase of revenue and an expansion
of online advertising activities, including increased game
promotion through web platforms, application stores and agents.
Selling expenses as a percentage of net revenues decreased to 25.4%
in 2014 from 31.4% in 2013.
- General and administrative expenses increased by 134.7% to
RMB131.2 million (US$21.1 million) in 2014 from RMB55.9 million in
2013 primarily as a result of the higher share-based compensation
to motivate and reward our staff and the increased headcount to
support our growing operations. General and administrative expenses
as a percentage of net revenues decreased to 10.4% in 2014 from
15.8% in 2013.
- Research and development expenses increased by 105.0% to
RMB111.3 million (US$17.9 million) in 2014 from RMB54.3 million in
2013. Research and development expenses as a percentage of net
revenues decreased to 8.8% in 2014 from 15.4% in 2013 due to a
substantial year-over-year increase in revenues.
Operating Income
(Loss)
We had operating income of RMB217.4 million (US$35.0 million) in
2014, compared to an operating loss of RMB26.8 million in 2013. As
a result of the cumulative effect of the above factors, our
operating margin increased to 17.2% in 2014 from -7.6% in 2013.
Other Income
We had other income of RMB5.2 million (US$0.8 million) in 2014,
compared to other income of RMB25.7 million in 2013. Other income
in 2014 mainly represented government grants and foreign exchange
gain arising from the stronger RMB exchange rate against the US
dollar. In comparison, other income in 2013 mainly represented (i)
gain on disposal of a subsidiary engaged in the sale and
development of mobile games in 2013, (ii) gain on an acquisition
for which the purchase consideration was lower than the fair value
of the net assets acquired and liabilities assumed, and (iii)
government grants.
Changes in Fair Value of Contingently Returnable
Consideration Assets
Our changes in fair value of contingently returnable
consideration assets were nil in 2014. The amount for 2013 was a
gain of RMB24.4 million, which was primarily due to an increase in
the fair value of consideration shares to be returned to VODone
pursuant to the contingent conditions related to the acquisitions
of the 3GUU Group. Beginning in 2014, we will no longer have
changes in fair value of contingently returnable consideration
assets related to our historical reorganization as the contingently
returnable consideration assets was fully settled as of 31 December
2013.
Income Tax
We had an income tax expense of RMB1.1 million (US$0.2 million)
in 2014, compared to an income tax benefit of RMB0.2 million in
2013. Our effective tax rate was 0.49% in 2014, compared to 0.75%
in 2013, primarily due to our increased profitability.
Net Income attributable to
CMGE
As a result of the foregoing, we recorded net income
attributable to CMGE of RMB232.1 million (US$37.4 million) in 2014,
representing an increase of 904.8% from the net income attributable
to CMGE of RMB23.1 million in 2013. Our non-GAAP net income
attributable to CMGE, excluding (i) share-based compensation and
(ii) internal investigation costs, was RMB272.1 million (US$43.9
million) in 2014, compared with non-GAAP net income attributable to
CMGE, excluding (1) share-based compensation and (2) goodwill and
intangible assets impairment loss, of RMB39.7 million in 2013.
Declaration of Annual Cash Dividends
On March 26, 2015, the Company's board of directors declared
annual cash dividends in the aggregate amount of approximately
US$4.4 million to the Company's shareholders of record as of the
close of business on April 17, 2015 (Eastern Daylight Time), at
US$0.01 per Class A or Class B ordinary share, or USD0.14 per ADS,
each representing fourteen Class A ordinary shares. The cash
dividends are expected to be distributed on or about May 15,
2015.
The Company may continue to distribute annual dividends in the
future. However, the distribution of any future dividends will be
at the full discretion of the Board and will be dependent on the
Company's financial position, results of operations, available
cash, capital requirements and other factors.
Business Outlook
For the first quarter of 2015, the Company expects revenue of
RMB435.0 million (US$70.1 million). This forecast reflects the
Company's current and preliminary view on the estimated performance
of its game portfolio and on the market and operational conditions,
which may fluctuate and are subject to change.
Conference Call
CMGE's management will host a conference call to discuss the
results at 8:00 a.m. Eastern Daylight Time on March 26, 2015 (8:00
p.m. Beijing time on the same day).
The dial-in details for the live conference call are:
U.S. Toll Free Dial-In |
+1 855-500-8701 |
Hong Kong Dial-In |
+852 3018-6776 |
China Dial-In |
400-120-0654 |
International Dial-In |
+65 6723-9385 |
Conference ID |
12493223 |
A telephone replay of the call will be available after the
conclusion of the conference call at 11:00 a.m. Eastern Daylight
Time on March 26, 2015 through 08:59 a.m. Eastern Daylight Time on
Friday, April 3, 2015. The dial-in details for the replay are:
U.S. Toll Free Dial-In |
+1 855-452-5696 |
International Dial In: |
+61 2-9003-4211 |
Conference ID |
12493223 |
A live webcast of the conference call will be available on the
investor relations section of CMGE's website at:
http://ir.cmge.com/.
About CMGE
CMGE is the largest publisher and a leading developer of mobile
games in China with integrated capabilities across the
mobile game value chain. Its fully integrated capabilities include
the development, licensing, publishing, distribution and operation
of mobile games, primarily in China. Its social games are mainly
developed for Android and iOS-based smartphones. CMGE's extensive
distribution network includes its proprietary Game Center
application, handset pre-installations, application stores and web
platforms and mobile network operators. The Company's stock is
traded on NASDAQ under the symbol CMGE. For more corporate and
product information, please visit CMGE's website
at http://www.cmge.com.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of 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," "confident" and similar statements. CMGE
may also make written or oral forward-looking statements in its
periodic reports to the U.S. Securities and Exchange
Commission, in its annual report to shareholders, in press releases
and other written materials and in oral statements made by its
officers, directors or employees to third parties. Statements that
are not historical facts, including statements about CMGE's beliefs
and expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: our growth strategies as well as our
business plans; our future development, results of operations and
financial condition; our ability to continue to develop new and
attractive products and services; our ability to continue to
develop new technologies or upgrade our existing technologies; our
ability to attract and retain users and customers and further
enhance our brand recognition; the expected growth of and trends in
the mobile game industry in China; PRC governmental policies
and regulations relating to the mobile game industry in China;
competition in the mobile game industry; and general economic and
business conditions in China. Further information regarding
these and other risks is included in our registration statement on
Form F-3, our annual report on Form 20-F and other documents filed
with the Securities and Exchange Commission. CMGE does not
undertake any obligation to update any forward-looking statement,
except as required under applicable law. All information provided
in this press release and in the attachments is as of the date of
the press release, and CMGE undertakes no duty to update such
information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement CMGE's financial results presented in accordance
with U.S. GAAP, the Company uses non-GAAP financial measures, which
are adjusted from results based on U.S. GAAP to exclude (1)
share-based compensation, (2) internal investigation costs, (3)
goodwill and intangible assets impairment loss and (4) listing
expenses. Reconciliations of non-GAAP financial measures to U.S.
GAAP financial measures are set forth in tables at the end of this
earnings release, which provide more details on the non-GAAP
financial measures.
Non-GAAP financial information is provided as additional
information to help investors compare business trends among
different reporting periods on a consistent basis and to enhance
investors' overall understanding of the historical and current
financial performance of the Company's continuing operations and
prospects for the future. Non-GAAP financial information should not
be considered a substitute for or superior to U.S. GAAP results. In
addition, calculations of this non-GAAP financial information may
be different from calculations used by other companies, and
therefore comparability may be limited.
______________________________
1 This announcement contains translations of certain Renminbi
(RMB) amounts into U.S. dollars (US$) at specified rates solely for
the convenience of the reader. Unless otherwise noted, all
translations from RMB to U.S. dollars are made at a rate of
RMB6.2046 to US$1.00, the effective noon buying rate as of December
31, 2014 in The City of New York for cable transfers of RMB as set
forth in H.10 weekly statistical release of the Federal Reserve
Board.
2 Non-GAAP measures and related reconciliations to GAAP measures
are described in the accompanying sections titled "About Non-GAAP
Financial Measures" and "Reconciliation of Non-GAAP Financial
Measures to Comparable GAAP Measures" at the end of this press
release.
3 One ADS represents 14 Class A ordinary shares of the
Company's stock.
4 Total paying users for social games represent the number of
users (as measured by user accounts) that have purchased in-game
items for the relevant period, adjusted to eliminate
double-counting of the same user accounts.
5 Total paying users for single-player games represents (i) the
number of user accounts that have purchased in-game items for the
relevant period, adjusted to eliminate double-counting of the same
user account, and (ii) the total number of games purchased through
application stores.
6 Total subscriptions represent the total number of monthly
subscriptions to our game bundles offered through mobile network
operators. A user who pays two subscription fees during one month
to subscribe to different game bundles would be counted as two
subscriptions.
7 MAUs represent the total number of user accounts that have
logged-in to or played a game during a particular month, adjusted
to eliminate double-counting of the same user account. Average MAUs
for a particular period is the average of the MAUs during that
period.
8 DAUs represent the total number of user accounts that have
logged-in to or played a game during a particular day, adjusted to
eliminate double-counting of the same user account. Average DAUs
for a particular period is the average of the DAUs during that
period.
CHINA MOBILE GAMES AND
ENTERTAINMENT GROUP LIMITED |
CONSOLIDATED BALANCE
SHEETS |
|
(Amounts in thousands
of Renminbi ("RMB") and U.S. Dollars ("US$"), except for number of
shares) |
|
As of December 31, |
As of December 31, |
|
2013* |
2014 |
2014 |
|
RMB |
RMB |
US$ |
|
|
(Unaudited) |
(Unaudited) |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
249,126 |
349,343 |
56,304 |
Restricted cash |
15,725 |
— |
— |
Short-term investments |
51,772 |
42,361 |
6,827 |
Accounts receivable |
140,049 |
553,157 |
89,153 |
Prepayment and other current assets |
91,585 |
192,855 |
31,083 |
Amount due from related party |
6,097 |
6,087 |
981 |
Deferred tax assets |
1,100 |
2,880 |
464 |
Total current assets |
555,454 |
1,146,683 |
184,812 |
|
|
|
|
Non-current assets: |
|
|
|
Property and equipment, net |
13,085 |
23,602 |
3,804 |
Goodwill |
564,841 |
564,841 |
91,036 |
Intangible assets, net |
86,891 |
212,560 |
34,258 |
Prepayments |
23,000 |
17,400 |
2,804 |
Equity method investments |
— |
17,311 |
2,790 |
Long-term investments, net |
2,000 |
128,888 |
20,773 |
Deferred tax assets |
2,714 |
5,105 |
822 |
Other non-current assets |
5,139 |
71,225 |
11,479 |
Total non-current
assets |
697,670 |
1,040,932 |
167,766 |
|
|
|
|
TOTAL ASSETS |
1,253,124 |
2,187,615 |
352,578 |
|
|
|
|
LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Short-term bank borrowing |
14,000 |
— |
— |
Accounts payable |
59,170 |
189,491 |
30,540 |
Accrued expenses and other
liabilities |
41,174 |
90,697 |
14,618 |
Deferred revenue |
12,413 |
17,824 |
2,873 |
Income tax payable. |
1,851 |
2,829 |
456 |
Amounts due to related parties |
— |
9,560 |
1,541 |
|
|
|
|
Total current
liabilities |
128,608 |
310,401 |
50,028 |
|
|
|
|
Non-current
liabilities: |
|
|
|
Unrecognized tax benefits |
9,970 |
16,270 |
2,622 |
Deferred tax liabilities |
7,793 |
4,464 |
719 |
Other non-current liabilities |
2,000 |
2,000 |
322 |
|
|
|
|
Total non-current
liabilities |
19,763 |
22,734 |
3,663 |
|
|
|
|
Total liabilities |
148,371 |
333,135 |
53,691 |
|
|
|
|
Mezzanine equity |
|
|
|
Contingently redeemable ordinary shares
(US$0.001 par value, 26,485,961 shares authorized; 26,485,961 and
nil shares issued and outstanding as of December 31, 2013 and
December 31, 2014, respectively. Aggregate liquidation preference
and redemption amount were RMB77,677 and nil as of December 31,
2013 and December 31, 2014, respectively) |
77,677 |
-- |
-- |
|
|
|
|
Shareholders' equity |
|
|
|
Class A ordinary shares (US$0.001 par
value, 750,000,000 shares authorized; 178,034,362 and 257,523,929
shares issued and outstanding as of December 31, 2013 and December
31, 2014, respectively) |
1,121 |
1,610 |
259 |
Class B ordinary shares (US$0.001 par
value, 250,000,000 shares authorized; 180,821,228 and 180,821,228
shares issued and outstanding as of December 31, 2013 and December
31, 2014, respectively) |
1,179 |
1,179 |
190 |
Additional paid-in capital |
1,003,417 |
1,604,851 |
258,655 |
Retained earnings |
19,635 |
251,759 |
40,576 |
Accumulated other
comprehensive income/(loss) |
122 |
(2,735) |
(441) |
|
|
|
|
Total China Mobile Games and
Entertainment Group Limited's equity |
1,025,474 |
1,856,664 |
299,239 |
Noncontrolling interests |
1,602 |
(2,184) |
(352) |
|
|
|
|
Total shareholders'
equity |
1,027,076 |
1,854,480 |
298,887 |
|
|
|
|
TOTAL LIABILITIES, MEZZANINE EQUITY
AND SHAREHOLDERS' EQUITY |
1,253,124 |
2,187,615 |
352,578 |
* Amounts for the year ended December 31, 2013 were derived from
December 31, 2013 audited consolidated financial statements.
|
CHINA MOBILE GAMES AND
ENTERTAINMENT GROUP LIMITED |
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME |
(Amounts in thousands
of Renminbi ("RMB") and U.S. Dollars ("US$"), |
except for number of
shares and per share data) |
|
|
|
|
|
|
|
|
|
For the Three Months
Ended |
For the Twelve Months
Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
|
2013 |
2014 |
2014 |
2014 |
2013 |
2014 |
2014 |
|
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) |
(Unaudited) |
(Unaudited) |
Net Revenues |
|
|
|
|
|
|
|
Games |
146,717 |
357,648 |
417,752 |
67,329 |
319,218 |
1,264,695 |
203,832 |
Handset design |
(281) |
— |
— |
— |
33,789 |
— |
— |
|
|
|
|
|
|
|
|
Total net revenues |
146,436 |
357,648 |
417,752 |
67,329 |
353,007 |
1,264,695 |
203,832 |
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
|
|
|
|
|
Games |
(53,944) |
(125,590) |
(171,678) |
(27,669) |
(124,506) |
(483,943) |
(77,997) |
Handset design |
(98) |
— |
— |
— |
(31,491) |
— |
— |
|
|
|
|
|
|
|
|
Total cost of revenues |
(54,042) |
(125,590) |
(171,678) |
(27,669) |
(155,997) |
(483,943) |
(77,997) |
|
|
|
|
|
|
|
|
Gross profit |
92,394 |
232,058 |
246,074 |
39,660 |
197,010 |
780,752 |
125,835 |
Operating expenses: |
|
|
|
|
|
|
|
Selling expenses |
(51,913) |
(91,436) |
(103,479) |
(16,678) |
(110,954) |
(320,887) |
(51,718) |
General and administrative expenses |
(14,144) |
(34,917) |
(40,848) |
(6,583) |
(55,925) |
(131,174) |
(21,141) |
Research and development expenses |
(19,912) |
(32,452) |
(38,827) |
(6,258) |
(54,294) |
(111,293) |
(17,937) |
Impairment of intangible assets |
— |
— |
— |
— |
(2,613) |
— |
— |
|
|
|
|
|
|
|
|
Operating income (loss) |
6,425 |
73,253 |
62,920 |
10,141 |
(26,776) |
217,398 |
35,039 |
Interest income |
915 |
2,327 |
1,656 |
267 |
3,322 |
8,241 |
1,328 |
Share of profits (losses) in equity method
investments |
— |
(780) |
(1,294) |
(209) |
— |
(1,809) |
(292) |
Other income (loss) |
10,089 |
34 |
(219) |
(35) |
25,654 |
5,238 |
844 |
Change in fair value of contingently
returnable consideration assets |
16,784 |
— |
— |
— |
24,366 |
— |
— |
|
|
|
|
|
|
|
|
Income before income taxes and
noncontrolling interests |
34,213 |
74,834 |
63,063 |
10,164 |
26,566 |
229,068 |
36,919 |
Income tax (expense) benefit |
1,083 |
358 |
148 |
24 |
197 |
(1,121) |
(180) |
|
|
|
|
|
|
|
|
Net income |
35,296 |
75,192 |
63,211 |
10,188 |
26,763 |
227,947 |
36,739 |
|
|
|
|
|
|
|
|
Accretion of contingently redeemable
ordinary shares |
(920) |
— |
— |
— |
(3,174) |
— |
— |
|
|
|
|
|
|
|
|
Net income attributable to
shareholders |
34,376 |
75,192 |
63,211 |
10,188 |
23,589 |
227,947 |
36,739 |
|
|
|
|
|
|
|
|
Net income (loss) attributable to
noncontrolling interests |
146 |
(338) |
(4,220) |
(680) |
503 |
(4,177) |
(673) |
Net income attributable to China
Mobile Games and Entertainment Group Limited's ordinary
shareholders |
34,230 |
75,530 |
67,431 |
10,868 |
23,086 |
232,124 |
37,412 |
|
|
|
|
|
|
|
|
Other comprehensive income
(loss): |
|
|
|
|
|
|
|
Foreign currency translation
adjustment |
(1,397) |
24 |
(2,863) |
(461) |
542 |
(3,332) |
(537) |
Unrealized gains on available-for-sale
investments |
— |
— |
475 |
77 |
— |
475 |
77 |
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
(1,397) |
24 |
(2,388) |
(384) |
542 |
(2,857) |
(460) |
|
|
|
|
|
|
|
|
Comprehensive income |
32,979 |
75,216 |
60,823 |
9,804 |
24,131 |
225,090 |
36,279 |
|
|
|
|
|
|
|
|
Comprehensive income (loss)
attributable to noncontrolling interests |
503 |
(337) |
(4,221) |
(680) |
451 |
(4,177) |
(673) |
Comprehensive income attributable to
China Mobile Games and Entertainment Group Limited's ordinary
shareholders |
32,476 |
75,553 |
65,044 |
10,484 |
23,680 |
229,267 |
36,952 |
|
|
|
|
|
|
|
|
Earnings per ADS: |
|
|
|
|
|
|
|
Basic |
1.28 |
2.42 |
2.16 |
0.35 |
0.98 |
7.67 |
1.24 |
Diluted |
1.18 |
2.3 |
2.04 |
0.33 |
0.89 |
7.22 |
1.16 |
Weighted average number of
ADS: |
|
|
|
|
|
|
|
Basic |
24,773,953 |
31,151,151 |
31,289,118 |
31,289,118 |
22,826,916 |
30,259,888 |
30,259,888 |
Diluted |
26,851,708 |
32,769,323 |
33,079,081 |
33,079,081 |
23,827,162 |
32,130,215 |
32,130,215 |
|
|
|
|
|
|
|
|
Cash dividends declared per
ADS |
— |
— |
0.87 |
0.14 |
— |
0.87 |
0.14 |
|
CHINA MOBILE GAMES AND
ENTERTAINMENT GROUP LIMITED |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Amounts in thousands
of Renminbi ("RMB") and U.S. Dollars ("US$")) |
|
|
|
|
|
|
|
|
|
For the Three
Months Ended |
For the Twelve
Months Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
|
2013 |
2014 |
2014 |
2014 |
2013 |
2014 |
2014 |
|
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) |
(Unaudited) |
(Unaudited) |
Net cash provided (used in) operating
activities |
(53,497) |
(62,679) |
66,261 |
10,679 |
(60,663) |
(20,160) |
(3,250) |
Net cash used in investing
activities |
(29,617) |
(47,526) |
(101,173) |
(16,305) |
(77,561) |
(365,268) |
(58,870) |
Net cash provided by financing
activities |
108,011 |
5,419 |
1,880 |
303 |
260,427 |
488,590 |
78,747 |
|
|
|
|
|
|
|
|
Exchange rate effect on cash and cash
equivalents |
(2,046) |
21 |
(2,859) |
(461) |
(1,813) |
(2,945) |
(475) |
Net increase (decrease) in cash and
cash equivalents |
22,851 |
(104,765) |
(35,891) |
(5,784) |
120,390 |
100,217 |
16,152 |
Cash and cash equivalents, beginning
of the period |
226,275 |
489,999 |
385,234 |
62,088 |
128,736 |
249,126 |
40,152 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of the
period |
249,126 |
385,234 |
349,343 |
56,304 |
249,126 |
349,343 |
56,304 |
|
|
Reconciliations of
Non-GAAP Financial Measures to Comparable GAAP
Measures |
(Amounts in thousands
of Renminbi ("RMB") except for per ADS data) |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
For the three months ended |
For the three months ended |
|
December 31, 2013 |
September 30, 2014 |
December 31, 2014 |
|
GAAP |
Adjustment (a) |
Non-GAAP |
GAAP |
Adjustment (b) |
Non-GAAP |
GAAP |
Adjustment (c) |
Non-GAAP |
|
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
Operating expenses |
85,969 |
(306) |
85,663 |
158,805 |
(7,649) |
151,156 |
183,154 |
(20,460) |
162,694 |
Income from operations |
6,425 |
306 |
6,731 |
73,253 |
7,649 |
80,902 |
62,920 |
20,460 |
83,380 |
Operating margin |
4.4% |
|
4.6% |
20.5% |
|
22.6% |
15.1% |
|
20.0% |
Net income |
35,296 |
306 |
35,602 |
75,192 |
7,649 |
82,841 |
63,211 |
20,460 |
83,671 |
Net margin |
24.1% |
|
24.3% |
21.0% |
|
23.2% |
15.1% |
|
20.0% |
Net income attributable to
CMGE |
34,230 |
306 |
34,536 |
75,530 |
7,649 |
83,179 |
67,431 |
20,460 |
87,891 |
Net margin attributable to CMGE |
23.4% |
|
23.6% |
21.1% |
|
23.3% |
16.1% |
|
21.0% |
Diluted earnings per ADS(b) |
1.18 |
|
1.19 |
2.30 |
|
2.54 |
2.04 |
|
2.66 |
|
For the twelve months ended December 31, 2013 |
For the twelve months ended December 31, 2014 |
|
GAAP |
Adjustment (d) |
Non-GAAP |
GAAP |
Adjustment (b) |
Non-GAAP |
|
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
Operating expenses |
223,786 |
(16,633) |
207,153 |
563,354 |
(39,928) |
523,426 |
Income (loss) from operations |
(26,776) |
16,633 |
(10,143) |
217,398 |
39,928 |
257,326 |
Operating margin |
-7.6% |
|
-2.9% |
17.2% |
|
20.3% |
Net income |
26,763 |
16,633 |
43,396 |
227,947 |
39,928 |
267,875 |
Net margin |
7.6% |
|
12.3% |
18.0% |
|
21.2% |
Net income attributable to CMGE |
23,086 |
16,633 |
39,719 |
232,124 |
39,928 |
272,052 |
Net margin attributable to CMGE |
6.5% |
|
11.3% |
18.4% |
|
21.5% |
Diluted earnings per ADS(d) |
0.89 |
|
1.67 |
7.22 |
|
8.47 |
|
|
|
|
|
|
|
(a) Adjustment to exclude the
share-based compensation expense and goodwill and intangible assets
impairment loss of each period. |
(b) Adjustment to exclude the
share-based compensation expense and internal investigation costs
of each period. |
(c) Adjustment to exclude the
share-based compensation expense of each period. |
(d) Adjustment to exclude the
share-based compensation expense, goodwill and intangible assets
impairment loss and listing expense of each period. |
(e) 1 ADS = 14 Ordinary
Shares. |
CONTACT: For investor and media inquiries, please contact:
China Mobile Games and Entertainment Group Limited
Tel: +852 2700 6108
E-mail: ir@cmge.com
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