Last night's ER didn't go over very well on this recent IPO. Missed consensus earnings and revs, and I missed the short this morning, thought ER was tonight.
http://stockcharts.com/h-sc/ui?s=GA&p=D&b=5&g=0&id=p44651262281
Giant Interactive Group, Inc.
2nd Floor No 29 Building
396 Guilin Road
Shanghai, 200233
China - Map
Phone: 86 21 6451 5001
Web Site: http://www.ztgame.com.cn
DETAILS
Index Membership: N/A
Sector: Services
Industry: Business Services
Full Time Employees: 797
BUSINESS SUMMARY
Giant Interactive Group, Inc. develops and operates online games in the People's Republic of China. It focuses on massively multiplayer online (MMO) games that are played through networked game servers, in which thousands of players are able to connect and interact. The company's games include ZT Online, a two-dimensional online role-playing game; ZT Online PTP, a pay-to-play MMO game and is based on the ZT Online free-to-play game; and Giant Online, a military-themed MMO game. It markets and sells prepaid game cards and game points through Internet cafes, software stores, supermarkets, bookstores, newspaper stands, and convenience stores, as well as through its official game Web site. The company was founded in 2004 and is based in Shanghai, the People's Republic of China.
-----------------------------------------------------------------------------
Giant Interactive Group Inc. Announces Third Quarter 2007 Results
Monday November 19, 4:13 pm ET
SHANGHAI, China, Nov. 19 /Xinhua-PRNewswire/ -- Giant Interactive Group Inc. (NYSE: GA - News), one of China's leading online game developers and operators in terms of revenues, announced today its unaudited financial results for the third quarter ended September 30, 2007.
Third Quarter 2007 Highlights:
-- Net revenue for the third quarter of 2007 was RMB405.2 million
(US$54.1 million), an increase of 164.2% over the third quarter of
2006 and 9.5% over the second quarter of 2007.
-- Gross profit for the third quarter of 2007 was RMB359.8million
(US$48.0million), an increase of 152.8% over the third quarter of 2006
and 8.5% over the second quarter of 2007. Gross profit margin for the
third quarter of 2007 was 88.8%.
-- Net income for the third quarter of 2007 was RMB290.2 million (US$38.7
million), an increase of 152.6% over the third quarter of 2006 and
9.8% over the second quarter of 2007. Net income margin for the third
quarter of 2007 was 71.6%.
-- Net income per ordinary share for the third quarter of 2007 was
RMB1.44 (US$0.19), compared to RMB0.57 for the third quarter of 2006.
After the recent initial public offering, each ADS represents one
ordinary share.
-- Active Paying Accounts ("APA") for ZT Online in the third quarter of
2007 reached 1,318,000, an increase of 88.9% from the third quarter of
2006 and 5.6% from the second quarter of 2007.
-- Average Revenue Per User ("ARPU") for ZT Online in the third quarter
of 2007 was RMB305.2, an increase of 38.8% from the third quarter of
2006 and 3.3% from the second quarter of 2007.
-- Average Concurrent User ("ACU") for ZT Online in the third quarter of
2007 was 481,000, an increase of 77.6% from the third quarter of 2006
and a decrease of 6.6% from the second quarter of 2007.
-- Peak Concurrent User ("PCU") for ZT Online in the third quarter of
2007 was 888,000, an increase of 59.2% from the third quarter of 2006
and a decrease of 17.2% from the second quarter of 2007.
Mr. Yuzhu Shi, Chairman and Chief Executive Officer of Giant Interactive Group Inc. ("Giant"), commented, "2007 has been a historic year for Giant, highlighted by our successful listing on the NYSE on November 1, 2007. Our listing represents a major milestone towards our goal of becoming the largest online game developer and operator in Asia. Our passion for games remains the main driving force behind our strategy, while our strong R&D and technology capabilities, extensive distribution and marketing support network and clear insight into the Chinese mass market continue to underpin our growth. As such, we are pleased to announce strong earnings for the third quarter of 2007 with 164.2% growth in net revenue and a 152.6% increase in net income, as well as continued strong high gross profit and net income margins. Our ZT Online game continued to deliver solid performance with the successful launch of the expansion packs and with the execution of our marketing strategy of targeting new users in medium and smaller cities. The increases in both APA and ARPU demonstrate the continued expansion of our paying player base and increasing player loyalty to ZT Online. The development of our second major game, Giant Online, is on track and feedback from closed beta testing has been very positive."
"We are excited for our future prospects." Mr. Shi continued, "We believe with the recent milestones and our unwavering commitment to game play, we are well positioned to enhance our market leadership."
Third Quarter 2007 Unaudited Financial Results
Total net revenue.
Total net revenues for the third quarter of 2007 were RMB405.2 million (US$54.1 million), representing a 9.5% increase compared to RMB370.2 million in the second quarter of 2007, and a 164.2% increase compared to RMB153.4 million in the third quarter of 2006.
Online game net revenues for the third quarter of 2007 were RMB404.0 million (US$53.9 million), an increase of 9.7% from RMB368.4 million in the second quarter of 2007, and an increase of 163.4% from RMB153.4 million in the third quarter of 2006. The significant year-over-year increase in online game net revenues was mainly due to the strong performance achieved by ZT Online, especially from our recent expansion pack release in the third quarter of 2007. Although both ACU and PCU had a slight decrease in the third quarter of 2007 as compared to those in the second quarter of 2007 due to the game rule change instituted by us to discourage "gold farming" activities in June of 2007, we believe that the recent expansion pack Zhong Zhi Cheng Cheng ("ZZCC") released in July has enhanced our player interactivity and loyalty to the game, and helped drive APA and ARPU up by 5.6% and 3.3%, respectively, from the second quarter 2007. In addition, the ZZCC expansion pack has led to improved ACU and PCU during the course of the third quarter 2007.
Cost of Services.
Cost of services for the third quarter of 2007 was RMB45.4 million (US$6.1 million), representing a 311.2% increase over the same period last year, and an increase of 17.7%, over the second quarter of 2007. The quarter-over- quarter rise in cost of services was mainly due to a RMB2.8 million increase in co-location and Internet access costs, a RMB1.7 million increase in depreciation of servers and an increase of RMB0.8 million in compensation costs. The increased costs related to these items were a result of the expansion of our business, including the purchase of additional servers to provide better service and performance for current game players and the expansion of our infrastructure capabilities in advance of the launch of both ZT Online expansion packs and Giant Online.
Gross Profit and Gross Margin.
Gross profit for the third quarter of 2007 was RMB359.8 million (US$48.0 million), representing a RMB28.2 million sequential increase and a significant RMB217.5 million year-over-year increase. Gross margin for the third quarter of 2007 was 88.8%, down slightly from 92.8% in the third quarter of 2006 and 89.6% in the second quarter 2007. The slight decrease in gross margin was mainly due to increased investment in services, as we further developed infrastructure and technology platforms in anticipation of the launch of both ZT Online expansion packs and Giant Online.
Operating Expenses.
Total operating expenses for the third quarter of 2007 were RMB70.2 million (US$9.4 million), representing an increase of 3.3% from RMB67.9 million in the second quarter of 2007, and an increase of 152.6% from RMB27.8 million in the third quarter of 2006. The sequential increase in operating expenses is mainly attributable to the rise in research and product development and sales and marketing expenses, while the year-over-year increase in operating expenses was primarily a result of continuous investment to accelerate our business expansion.
Research and product development expenses were RMB7.2 million (US$1.0 million), an increase of 118.9% from RMB3.3 million in the previous quarter, and up 141.8% from RMB3.0 million in the third quarter of 2006. The increased expenses resulted from the hiring of additional senior game architects and engineers in an effort to further strengthen R&D capabilities, enrich our game designs and drive the launch of expansion packs for ZT Online and Giant Online.
Sales and marketing expenses increased to RMB59.6 million (US$8.0 million) for the third quarter 2007, up 34.3% from RMB44.4 million in the previous quarter and up 169.9% from RMB22.1million in the third quarter of 2006. We have significantly expanded our liaison personnel from 1,300 as of June 30, 2007 to 2,500 as of October 1, 2007, in order to accelerate our marketing campaigns aimed at increasing penetration in China's medium and small cities. We have also added 220 liaison offices during the third quarter, bringing the total number of our liaison offices to be over 470 as of September 30, 2007, and increased our advertising initiatives to support our sales and marketing efforts in these cities.
General and administrative expenses were RMB20.1 million (US$2.7 million) in the third quarter of 2007, representing a sequential decrease of 0.6% from RMB20.2 million. The relative stability of general and administrative expenses quarter-over-quarter is mainly attributable to our ongoing efforts to optimize operational and cost efficiency.
Income Tax Expense.
There was no income tax expense to report in the third quarter of 2007 due to the current tax holiday we are experiencing.
Net Income.
Net income for the third quarter of 2007 was RMB290.2 million (US$38.7 million), a year-over-year increase of 152.6% from RMB114.9 million, a quarter-over-quarter increase of 9.8% from RMB264.2 million. Net income margin was up slightly to 71.6% for the third quarter of 2007, as compared to 71.4% in the preceding quarter and 74.9% in the third quarter of 2006.
Cash and Cash Equivalents.
Cash and cash equivalents as of September 30, 2007 grew to RMB1,170 million (US$156.1 million) from RMB98.9 million as of June 30, 2007. This increase was mainly due to the receipt of RMB900.0 million from Jiante, a related party of the Company, as payment for advances provided by Giant earlier in 2007.
Advance from Distributors.
Advance from distributors increased by RMB55.2 million from RMB63.4 million as of June 30, 2007 to RMB118.6 million (US$15.8 million) as of September 30, 2007, which was mainly due to the increase in sales of prepaid game cards at the end of September 2007. Since the first week of October was Chinese National Holiday and there was no sale of prepaid game cards in that week, all the cards were sold just before the National Holiday.
Currency Convenience Translation
Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB7.4928 on September 28, 2007 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.
Business Highlights and Outlook
ZT Online-The latest expansion pack, Zhong Zhi Cheng Cheng ("ZZCC") for ZT Online was released in July 2007 and has been well received by the players. We believe that this pack has greatly improved the community features of ZT Online by further enhancing the interactivity amongst players through development and expansion of collaborative and combative features in the game. It further enhances the retention of players and player loyalty to the game.
With unwavering commitment to game play, we continue to develop new enhancements and features to deliver a better gaming experience. Another expansion pack of ZT Online is expected to be released in the fourth quarter of 2007, and beta testing of it is already in progress. The new version includes innovations in online game design to further enhance the geographical and dimensional interactive experience for players. Also, the ZT Online PTP version is aimed at deepening our penetration into other uncaptured niche segment and public beta testing has been in process since September.
Giant Online-Engineering testing, internal tests and closed beta testing for this highly anticipated game were successfully completed by the end of August. The dual version beta test commenced in September with over 100,000 daily registered volunteer participants and concurrent user of 30,000 as of the end of the third quarter of 2007. Giant Online has already been commercially launched in the fourth quarter of 2007 and we anticipate to start ramping up users by the first quarter of 2008.
King of Kings III-Developments to launch King of Kings III, which Giant acquired from a Taiwan-based company, continues to remain on schedule and will soon enter into the internal testing phase.
Initial Public Offering-On November 1, 2007, Giant Interactive Group successfully listed on the New York Stock Exchange in an initial public offering of 57,197,423 shares and a new issuance of 1,612,903 shares to a third-party cornerstone investor. After inclusion of an additional 8,579,613 ADSs, representing the over-allotment shares, the total offering size was approximately US$1.04 billion.
Fourth Quarter Guidance-Based on the current outlook, Giant expects to generate total net revenues for the fourth quarter in the range of RMB425 million to RMB430 million.
Conference Call
Giant Interactive Group senior management will host a conference call at 8:00 a.m. (Eastern) / 5:00 a.m. (Pacific) / 9:00 p.m. (Beijing) on Tuesday, November 20, 2007 to discuss its 2007 third quarter financial results and recent business activity. The conference call may be accessed by calling +1- 866-202-1971 (US) or +1-617-213-8842 (International), with pass code 68099188.
A live webcast of the conference call and replay will be available on the investor relations page of Giant Interactive Group's website at http://www.giantig.com/investors/earningsannouncements.html.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is preliminary and subject to adjustments. Adjustments to the financial statements may be identified when audit work is performed for the year-end audit, which could result in significant differences from this preliminary unaudited financial information.
About Giant Interactive Group Inc.
Giant Interactive Group Inc. (NYSE: GA - News) is one of China's leading online game developers and operators in terms of revenues, focusing on massively multiplayer online role-playing games. Giant's game, ZT Online, was voted the most popular online game in China in 2006 according the International Data Corporation. Giant has three additional online games that it intends to commercially launch, including ZT Online PTP, Giant Online and King of Kings III. Giant has built a nationwide distribution network to sell the prepaid game cards and game points required to play its games, which as of September 30, 2007 consisted of over 200 distributors, and reached over 116,500 retail outlets, including internet cafes, software stores, supermarkets, bookstores, newspaper stands and convenience stores located throughout China. For more information, please visit Giant Interactive Group on the web at http://www.giantig.com.
Safe Harbor Statement
Statements in this release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements and among others, include our anticipated operating results for the fourth quarter 2007, our continued efforts to develop and launch our new games and expand our distribution and marketing network, anticipated success of our ZT expansion packs and ZT Online PTP and Giant Online. These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and financial condition and other circumstances may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Among the factors that could cause our actual results to differ from what we currently anticipates may include our ability to develop, purchase or license additional online games that are attractive to our players, our dependence on one online game, which currently accounted for all of our historical net revenues, our ability to respond to competition, our need to implement and maintain effective internal control over financial reporting, our limited operating history and unproven long-term potential of our online game business model and our uncertainties with respect to the PRC legal and regulatory environments. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in our prospectus filed with the Securities and Exchange Commission on November 1, 2007, and is available on the Securities and Exchange Commission's website at http://www.sec.gov. For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations and prospects, see "Risk Factors" beginning on page 12 of our prospectus. Our actual results of operations for the third quarter of 2007 are not necessarily indicative of our operating results for any future periods. Any projections in this release are based on limited information currently available to us, which is subject to change. Although such projections and the factors influencing them will likely change, we undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release. Such information speaks only as of the date of this release.
GIANT INTERACTIVE GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
Audited Unaudited Unaudited Unaudited
December 31, June 30, September 30, September 30,
2006 2007 2007 2007
(RMB) (RMB) (RMB) (US$)
ASSETS
Current assets:
Cash and cash
equivalents 451,371,402 98,945,878 1,169,962,910 156,144,954
Prepayments and
other current
assets 12,558,672 35,300,293 42,754,330 5,706,055
Due from related
parties 2,500,000 903,851,800 4,807,033 641,554
Inventories 228,361 477,760 1,120,255 149,511
Deferred tax
assets -- 10,118,925 11,927,813 1,591,903
Total current
assets 466,658,435 1,048,694,656 1,230,572,341 164,233,977
Non-current
assets:
Property and
equipment, net 36,491,280 87,255,876 113,529,232 15,151,777
Intangible assets,
net 1,643,545 9,985,102 78,430,555 10,467,456
Long-term deposits 10,600 10,600 10,600 1,415
Deferred initial
public offering
costs -- 5,891,309 35,400,000 4,724,536
Total non-current
assets 38,145,425 103,142,887 227,370,387 30,345,183
Total assets 504,803,860 1,151,837,543 1,457,942,728 194,579,160
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Payables and
accrued expenses 47,044,135 55,657,409 82,756,614 11,042,818
Due to a related
party 2,496,391 27,115 --
Advance from
distributors 52,614,687 63,443,283 118,556,151 15,822,677
Deferred revenue 136,712,130 219,825,997 260,762,879 34,801,794
Unrecognized tax
benefits -- 10,118,925 11,927,813 1,591,903
Total current
liabilities 238,867,343 349,072,729 474,003,457 63,261,192
Non-current
liabilities:
Long-term loans 16,074,720 20,544,221 -- --
Total liabilities 254,942,063 369,616,950 474,003,457 63,261,192
Commitments and
contingencies
Shareholders'
equity
Ordinary shares
(par value
US$0.0000002
per share;
500,000,000
shares
authorized as
at December 31,
2006, June 30,
2007, September
30, 2007
respectively;
200,000,000 ,
200,000,000 and
204,590,000
shares issued
and outstanding
at December 31,
2006, June 30,
2007, September
30, 2007,
respectively) 318 318 325 43
Additional paid-in
capital 46,404,700 66,034,341 143,971,228 19,214,610
Statutory reserves 43,890,273 43,890,273 43,890,273 5,857,660
Accumulated other
comprehensive
income 145,906 546,088 2,397,187 319,932
Retained earnings 159,420,600 671,749,573 793,680,258 105,925,723
Total
shareholders'
equity 249,861,797 782,220,593 983,939,271 131,317,968
Total liabilities
and shareholders'
equity 504,803,860 1,151,837,543 1,457,942,728 194,579,160
GIANT INTERACTIVE GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three months ended
September June 30, September September
30, 2006 2007 30, 2007 30, 2007
(RMB) (RMB) (RMB) (US$)
Net revenue:
Online game 153,362,452 368,446,793 404,032,797 53,922,805
Overseas licensing
revenue -- 1,775,855 1,213,862 162,004
Total net revenue 153,362,452 370,222,648 405,246,659 54,084,809
Cost of services (11,052,633) (38,617,474) (45,449,384) (6,065,741)
Gross profit 142,309,819 331,605,174 359,797,275 48,019,068
Operating (expenses)
income:
Research and product
development expenses (2,986,269) (3,297,974) (7,219,369) (963,508)
Sales and marketing
expenses (22,088,487) (44,393,221) (59,626,591) (7,957,852)
General and
administrative
expenses (4,188,440) (20,209,385) (20,093,497) (2,681,707)
Government financial
incentives 1,490,000 -- 16,779,300 2,239,390
Total operating
expenses (27,773,196) (67,900,580) (70,160,157) (9,363,677)
Income from operations 114,536,623 263,704,594 289,637,118 38,655,392
Interest income 358,913 599,849 837,133 111,725
Other expenses (10,467) (56,663) (263,366) (35,149)
Income before income
tax expenses 114,885,069 264,247,780 290,210,885 38,731,967
Income tax benefits -- -- -- --
Net income 114,885,069 264,247,780 290,210,885 38,731,967
Other comprehensive
income
Foreign currency
translation -- 248,880 1,851,099 247,050
Comprehensive income 114,885,069 264,496,660 292,061,984 38,979,018
Earnings per share:
Basic 0.57 1.32 1.44 0.19
Diluted 0.57 1.32 1.38 0.18
Weighted average
ordinary shares:
Basic 200,000,000 200,000,000 201,572,283 201,572,283
Diluted 200,000,000 200,589,316 210,476,214 210,476,214
For more information, please contact:
Investor Contact:
Eric He, CFO
Giant Interactive Group Inc.
Tel: +86-21-6451-5001
Investor Relations (US):
Mahmoud Siddig
Taylor Rafferty
Tel: +1-212-889-4350
Investor Relations (HK):
Ruby Yim
Taylor Rafferty
Tel: +852-3196-3712
Media Contact:
John Dooley
Taylor Rafferty
Tel: +1-212-889-4350
--------------------------------------------------------------------------------
Source: Giant Interactive Group Inc
This is a Chinese gaming stock. Looks pretty cheap to me considering it will probably be growing a lot. I belive they had one very impressive quarter.
Will probably report on this again I think it looks pretty interesting.
edit: I was thinking ahead or something, I meant to say they've had one very disappointing quarter, not a very impressive quarter. The company is buying stock back.
Yes, recent IPO, they missed on top and bottom line,, and I missed the short on it, but you're right, it may be a good time to take a closer look at them now for a possible long. Already started a thread on them, guess you missed it.
Oops, I didn't miss it I just forgot to look.
I apologize travis, just absent mindedness. I'll watch out I promise!
I don't think he'll hold it against you, after all, you're one of the MVP's (most valuable posters) here as far as I'm concerned. You're doing great, keep up the good work, and happy holidays.
Thanks for the endorsement, Sully, I appreciate it very much.
I also enjoy your posts very much. I always feel better when I'm in a stock with you...I feel like our picks are a little bit too large cap for most posters, which is too bad, because a stock doesn't have to be a small cap to go up (or even go up quickly, I'm amazed how fast some of these large caps can move)
It looks like GA may be forming a base in the low teens to make a run at the IPO price. I'd like to see some more consolidation in this range for a base to move higher.
UPGRADES & DOWNGRADES HISTORY
Date Research Firm Action From To
4-Jan-08 CIBC Wrld Mkts
initiated at sector out-perform.
Base in place....... ???
52wk Range: 9.06 - 20.46
Volume: 1,330,215
Avg Vol (3m): 1,496,850
Market Cap: 2.96B
P/E (ttm): 15.37
EPS (ttm): 0.747
Technicals
Percentage Gainer
Last Price Quote is:
14.32%above 13-day MA
8.45%above 50-day MA
RS Rating: 93
Fundamentals
Key Data:
Market Cap (M): $2,495.22
P/E Ratio: 13.05
PEG Ratio: N/A
Next Earnings: 05/21/2008
Last Analyst Rating: Buy
"GA" Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders. ;D
All history on a stock pick in 1 thread is awesome. ;)
Just trying to get threads together,so we don't have a numerous amount floating around on the same stock. ::)
Thank You....and good luck with all your trades....make some $$$ ;) ;D
GA update (I am invested):
Giant Interactive Group Inc. Schedules 2008 First Quarter Earnings Release on Thursday, May 15, 2008
Monday , May 05, 2008 08:07ET
SHANGHAI, China, May 5 /Xinhua-PRNewswire-FirstCall/ -- Giant Interactive Group Inc. (NYSE: GA) ("Giant" or the "Company"), one of China's leading online game developers and operators, announced today that it will release unaudited financial results for the first quarter ended March 31, 2008 after the US market closes on Thursday, May 15, 2008.
The earnings release will be available on Giant's website at http://www.ga-me.com/earningsannouncements.php .
Following release of the earnings announcement, Giant's senior management will host a conference call on Friday, May 16, 2008 at 8:00 am (US Eastern Standard Time) / 5:00 am (US Pacific Standard Time) / 8:00 pm (Beijing Time) to discuss its 2008 first quarter financial results and recent business activity.
The conference call may be accessed by calling +1 (866) 510-0704 (for callers in the US), +86 10 800 130 0399 (for callers in China) or +1 (617) 597-5362 (for callers outside of the US and China) and entering pass code 24395264. Please dial in approximately 10 minutes before the scheduled time of the call.
A recording of the conference call will be available through 10:00 am (US Eastern Standard Time) on May 30, 2008, by calling +1 (888) 286-8010 (for callers in the US) or +1 (617) 801-6888 (for callers outside the US) and entering pass code 63018617.
A live webcast of the conference call and recording of the conference call will be available on Giant's website at: http://www.ga-me.com/earningsannouncements.php .
From 2007 ER:
Business Highlights and Outlook
ZT Online—As a testimony to our commitment to constantly enhancing our games in accordance with gamers' changing preferences, we have begun rolling out new expansion packs and features for ZT Online. The Neighboring Friends expansion pack contains a new feature in which a gamer's physical location can now be shown to other players. This encourages users to form location-based bonds, both in the game and in real-life, taking ZT Online to a new level of interactivity. This expansion pack is being rolled out on a regional basis, with nationwide deployment to be completed in 2008. ZT Online PTP, a pay-to-play version of the original ZT Online, allows gamers to explore the award-winning ZT Online universe using a time or subscription based model. We believe the simultaneous operation of both pay-to-play and free-to-play versions will allow the game to appeal to a broader audience and expand our customer base. We began open beta testing of ZT Online PTP on January 29, 2008.
Giant Online—We officially commenced closed beta testing of Giant Online, our company's second internally developed game. Giant Online's most distinctive characteristic is its modern military theme, blended with many casual game components. In addition, we developed the game's direction towards more community-based features. These features promote stable community bonds and raise the stickiness of the game, helping to retain new players. On December 29, 2007, we released the game to a group of players for user testing. Direct feedback from enthusiastic beta testers has been positive and plays an instrumental role in allowing game designers to further refine the game's content and design. At the end of the first quarter of 2008, we will initiate an open beta test.
King of Kings III—King of Kings III, a 3D free-to-play medieval magical MMORPG that we acquired from a Taiwan-based company, has completed its fundamental game design and is currently undergoing engineering testing in Taiwan. The developers plan to begin focus group testing in March of 2008. King of Kings III is on schedule for release in China in 2008.
Empire of Sports—Empire of Sports is a 3D MMORPG featuring multiple sports competitions. We have secured an exclusive license from Switzerland-based Empire of Sports Ltd. to operate Empire of Sports in the Greater China region when the game is completed in 2008.
First Quarter 2008 Guidance—We believe that fewer of our targeted players will have played our games during the first quarter 2008 due to the Chinese New Year holiday. In addition, we believe that the severe winter weather experienced in locations throughout China in first quarter 2008 will have resulted in still fewer players playing our games during the period. In spite of these factors, Giant expects to generate total net revenues for the first quarter 2008 in the range of RMB448 million to RMB456 million.
Giant Interactive Announces First Quarter 2008 Results
Thursday , May 15, 2008 16:30ET
SHANGHAI, China, May 15 /Xinhua-PRNewswire/ -- Giant Interactive Group Inc. (NYSE: GA) ("Giant" or the "Company"), one of China's leading online game developers and operators, announced today its unaudited financial results for the first quarter ended March 31, 2008.
First Quarter 2008 Highlights:
-- Net revenue was RMB471.6 million (US$67.3 million), an increase of
48.7% over the first quarter 2007 and an increase of 8.5% over the
fourth quarter 2007.
-- Gross profit was RMB420.8 million (US$60.0 million), an increase of
45.5% over the first quarter 2007 and an increase of 12.9% over the
fourth quarter 2007. Gross profit margin for the first quarter 2008 was
89.2%.
-- Net income was RMB338.7 million (US$48.3 million), an increase of 36.5%
over the first quarter 2007 and an increase of 1.5% over the fourth
quarter 2007. Net income margin for the first quarter 2008 was 71.8%.
Net income grew at a slower rate than net revenue mainly due to the
occurrence of income tax expenses in the first quarter 2008.
-- Non-GAAP net income excluding non-cash share-based compensation for the
first quarter 2008 was RMB350.8 million (US$50.0 million), an increase
of 40.0% over the first quarter 2007 and 1.0% over the fourth quarter
2007. Non-GAAP net income margin excluding non-cash share-based
compensation was 74.4%.
-- Net income per American Depositary Share ("ADS") was RMB1.38
(US$0.20), compared to RMB1.24 for the first quarter 2007 and RMB1.39
for the fourth quarter 2007. Each ADS represents one ordinary share.
-- Non-GAAP net income excluding non-cash share-based compensation per ADS
was RMB1.43 (US$0.20), compared to RMB1.25 for the first quarter 2007
and RMB1.44 for the fourth quarter 2007.
-- Active Paying Accounts ("APA") for online games(1) in the first
quarter 2008 reached 1,447,000, an increase of 46.7% from the first
quarter 2007 and an increase of 3.0% from the fourth quarter 2007.
-- Average Revenue Per User ("ARPU") for online games(1) was RMB325.1,
an increase of 1.7% from the first quarter 2007 and an increase of 5.3%
from the fourth quarter 2007.
-- Average Concurrent Users ("ACU") for online games(1) was 546,000, an
increase of 21.4% from the first quarter 2007 and an increase of 6.8%
from the fourth quarter 2007.
-- Peak Concurrent Users ("PCU") for online games(1) was 1,646,000, an
increase of 88.4% from the first quarter 2007 and an increase of 67.4%
from the fourth quarter 2007.
(1) Online games include ZT Online, ZT Online PTP and Giant Online.
Mr. Yuzhu Shi, Giant Interactive Chairman and Chief Executive Officer commented, "Our growth in the first quarter 2008 was driven by the addition of offline interactive community features and by our sales and marketing expansion efforts. Throughout the first quarter, we witnessed positive reactions to ZT Online's 'Neighboring Friends' expansion pack, which completed roll out in January and is aimed at increasing interactivity among players, which in turn enhances the stickiness of the in-game community. This expansion pack played an integral role in increasing the popularity of ZT Online, which reached a record high of over 1.5 million peak concurrent users on March 1, 2008. These achievements are a testimony to our gamer-first ideology and the continued growth momentum of our flagship game. In addition, our newly self-developed game, Giant Online, was launched into open beta testing on March 28, 2008, garnering a very encouraging market response, attaining a PCU of over 237,000 within the first 24 hours of launch. This mark surpassed even that of ZT Online, following its launch into open beta in April 2006. The success of both of these self-developed games in the first quarter can be attributed to our strong R&D capabilities, focused strategy and innovative community-building efforts; our team is dedicated to providing constant enhancements to game content in order to match our players' evolving preferences. Finally, during the quarter, we continued to expand our nationwide marketing and distribution network in order to support our advertising campaigns and initiatives to continue to grow our player base."
First Quarter 2008 Unaudited Financial Results
Net revenues. Net revenues for the first quarter 2008 were RMB471.6 million (US$67.3 million), representing an 8.5% increase compared to RMB434.8 million in the fourth quarter 2007, and a 48.7% increase compared to RMB317.2 million in the first quarter 2007.
Online game net revenues were RMB470.2 million (US$67.1 million), an increase of 8.5% from RMB433.6 million in the fourth quarter 2007, and an increase of 49.1% from RMB315.3 million in the first quarter 2007. The sequential rise in online game net revenues was primarily attributable to the strong performance achieved by ZT Online, supported by the newly launched "Neighboring Friends" expansion pack.
APA for online games(1) in the first quarter 2008 grew by 3.0% from the fourth quarter 2007 and by 46.7% over the first quarter 2007. ARPU for online games(1) in the first quarter 2008 increased 5.3% from the fourth quarter 2007 and 1.7% over the first quarter 2007. ACU for online games(1) in the first quarter 2008 increased 6.8% over the fourth quarter 2007 and 21.4% over the first quarter 2007. PCU for online games(1) in the first quarter 2008 showed an increase of 67.4% from the fourth quarter 2007 and an increase of 88.4% over the first quarter 2007. The year-over-year increases resulted from the success of our online games, namely ZT Online, which continues to attract new players through constant updates and expansion packs, allowing for increased interactivity among players, which encourages community cohesion.
Cost of Services. Cost of services was RMB50.8 million (US$7.2 million), representing an 81.5% increase over the same period last year, and a decrease of 18.1% from the fourth quarter 2007. The quarter-over-quarter decrease in cost of services was mainly due to a RMB6.7 million decline in business taxes, following a one-time rise in business tax in the fourth quarter 2007 due to distributors boosting their prepayments for stocking of prepaid game cards at year end. Our continuous focus on efficiency and stringent cost controls also contributed to the decrease in cost of services. The year-over-year increase in cost of services was a result of the expansion of our business, including the purchase of additional servers to provide better service and performance for current game players and the expansion of our infrastructure capabilities for the launch of both ZT Online expansion packs and Giant Online.
Gross Profit and Gross Margin. Gross profit increased sequentially by RMB48.0 million and year-over-year by RMB131.6 million to RMB420.8 million (US$60.0 million). Gross margin for the first quarter 2008 was 89.2%, down slightly from 91.2% in the first quarter 2007 and an increase of 3.5% over the fourth quarter 2007. The increase in gross margin quarter-over-quarter was mainly due to the decrease in cost of services and the continuous rise in our revenue.
Operating Expenses. Total operating expenses of RMB99.8 million (US$14.2 million) represented an increase of 6.3% from RMB93.9 million in the fourth quarter 2007, and an increase of 139.5% from RMB41.7 million in the first quarter 2007. The sequential increase in operating expenses is mainly attributable to the rise in sales and marketing expenses and general and administrative expenses, while the year-over-year increase in operating expenses was primarily a result of continued R&D and sales and marketing infrastructure expansion to accelerate our business growth.
Research and product development expenses for the first quarter 2008 were RMB11.8 million (US$1.7 million), a decrease of 9.4% from RMB13.1 million in the previous quarter, and up 254.3% from RMB3.3 million in the first quarter 2007. The sequential decrease in R&D expenses is mainly attributable to a decrease of RMB1.0 million in the share-based compensation expenses due to the accelerated amortization method. The year-over-year increase resulted from the hiring of additional senior game architects and engineers to further strengthen our R&D capabilities to enrich our game designs and generate innovative game ideas.
Sales and marketing expenses were RMB64.9 million (US$9.3 million), an increase of 11.9% from RMB58.0 million in the previous quarter and up 136.5% from RMB27.4 million in the first quarter 2007. We expanded our liaison personnel from approximately 2,500 as of December 31, 2007 to over 3,000 as of March 31, 2008 as part of our strategy to accelerate our marketing campaigns aimed at increasing penetration in China's medium and small cities. We also increased our advertising initiatives to support our sales and marketing efforts to promote the open beta launch of our new game Giant Online.
General and administrative expenses for the quarter were RMB28.1 million (US$4.0 million), representing a sequential increase of 22.7% from RMB22.9 million. The sequential rise and the year-over-year increase of general and administrative expenses were mainly attributable to the expansion of managerial personnel focusing on strategic management, accounting and finance.
Income Tax Expense. Income tax expense for the first quarter 2008 was RMB40.0 million (US$5.7 million).
Net Income. Net income for the first quarter 2008 was RMB338.7 million (US$48.3 million), a year-over-year increase of 36.5% from RMB248.1 million, and a sequential increase of 1.5% from RMB333.8 million. Net income margin was down slightly to 71.8% for the first quarter 2008, as compared to 78.2% in the first quarter 2007 and 76.8% in the preceding quarter. The lower rate of net income growth compared to previous quarters and the decrease in net margin were mainly attributed to the occurrence of income tax expenses in the first quarter 2008.
Cash and Cash Equivalents. Cash and cash equivalents as of March 31, 2008 fell to RMB5,835.0 million (US$832.1 million) from RMB7,295.5 million as of December 31, 2007. This significant decrease was mainly used to fund the repurchase of US$200 million of our ADS.
Business Highlights and Outlook
ZT Online -- As social networking communities converge with online games, we completed the roll out of the new ZT Online expansion pack, Neighboring Friends, in January to meet this trend. This expansion pack allows gamers from the same neighborhood to gather in the same shard, creating opportunities to develop real-life relationships between gamers. Due to the in-game community expanding from online to offline, Neighboring Friends has helped the popularity of ZT Online grow and reach a record high of over 1.5 million PCU in the first quarter 2008. Our team is actively engaged in preparing our next expansion pack, which will incorporate real time strategy gameplay, more micromanagement in battles, and innovative roles and skills. Additional in- game relationships and more teamplay opportunities will further focus on community building. We expect to launch the next expansion pack at the end of the second quarter 2008.
Giant Online -- We launched open beta testing of Giant Online, the Company's second internally developed game, at the end of the first quarter 2008. Giant Online was designed from the beginning with gamers' feedback in mind. Every aspect of the game, from its modern military theme to the inclusion of a wide variety of casual game components, was developed by analyzing and incorporating commentary from gamers. During the closed beta process, we continued to receive gamers' feedback, analyzed their concerns, and turned their opinions into revisions or new features. As a result, the open beta launch of Giant Online, which reached a PCU of over 237,000 on the first day of its launch, achieved an even higher PCU than that of ZT Online during its open beta launch in April 2006.
King of Kings III -- King of Kings III, a 3D free-to-play medieval magical MMORPG, is currently undergoing engineering testing for various gameplay elements in Taiwan. Features such as the battle interface, role balancing and questing system are being individually tested. We formed an in-house development team and recruited high level managers in Shanghai to collaborate with the developers in Taiwan to localize the game for mainland China. We plan to begin closed beta testing in China in the fourth quarter 2008, and open beta testing in early 2009.
Empire of Sports -- Empire of Sports is a 3D MMORPG featuring a wide range of sporting events. At the end of the first quarter 2008, the developers, Switzerland-based Empire of Sports Ltd., began a European Private Launch initially limited to 5,000 players. The developers expect to progressively enlarge the number of players to 50,000 in six months and to unlock additional features on a regular basis. The developers and our internal development team are currently adapting the game for the Greater China market. We expect to launch the game in China in the second half 2008.
Second Quarter 2008 Guidance -- Based on the current outlook, Giant expects to generate total net revenues for the second quarter in the range of RMB495 million to RMB505 million.
&
Giant Interactive 1Q net earnings rise, beat Street estimate
Thursday , May 15, 2008 17:05ET
SAN FRANCISCO, May 16, 2008 (Thomson Financial via COMTEX) -- Giant Interactive Group Inc. late Thursday reported first-quarter net earnings of RMB338.6 million ($48.3 million), or RMB1.38 (20 cents) per share, compared with RMB248.1 million, or RMB1.25, a year earlier.
The mean estimate of analysts polled by Thomson Reuters was a per-share profit of 16 cents.
Revenue for the quarter ended March 31 rose to RMB470.2 million ($67.1 million) from RMB315.3 million a year earlier, compared with the mean Street view of $63.1 million.
The company sees second-quarter revenue of RMB495 million to RMB505 million. Analysts are currently looking for revenue of $67.5 million for the quarter.
U.S.-listed shares of the Shanghai, China-based provider of online games closed the regular session up 75 cents at $16.29 but fell $1.01 to $15.28 in after-hours trading. Brigid Gaffikin bg/kh
Based on its 20% growth rate for then next few years and 2008 estimated $0.75 EPS, its fair value is $15.00.
Most solar stocks carry 100% growth rate for next year and 50% in following few years.
GA has no much upside potential.
Q1 update presentation:
http://www.ga-me.com/attachments/investors/1210939902_ICHZ892R.pdf
down in premarket ???
Bought CPSL yesterday and gained over 30% today and still holding.
This stock may trade up to $10.00.
It earned $0.10 this quarter, $0.30 first 9 months and may be over $0.40 this year.
Based on 25% growth rate it may have in next few years, this stock target is $10.00.