BEIJING, Nov. 10 /Xinhua-PRNewswire/ -- Perfect World Co., Ltd.
(Nasdaq: PWRD) ("Perfect World" or the "Company"), a leading online game developer and operator in China, today announced its unaudited financial results for the third quarter ended September 30, 2008.
Third Quarter 2008 Highlights*
-- Total revenues were RMB381.8 million (USD56.2 million), an increase of
14.2% from 2Q08 and 78.5 % from 3Q07
-- Gross profit was RMB 334.5 million (USD 49.3 million), an increase of
14.1 % from 2Q08 and 87.5 % from 3Q07
-- Operating profit was RMB 200.0 million (USD29.5 million), an increase
of 20.5% from 2Q08 and 71.8 % from 3Q07
-- Net income was RMB 198.8 million (USD29.3 million), an increase of
20.9% from 2Q08 and 61.2 % from 3Q07
-- Basic and diluted earnings per ADS were RMB3.53 (USD0.52) and RMB3.34
(USD0.49), respectively, as compared to basic and diluted earnings per
ADS of RMB2.93 and RMB2.76, respectively, in 2Q08, and basic and
diluted earnings per ADS of RMB2.51 and RMB2.18, respectively, in 3Q07
-- Aggregate average concurrent users (ACU) for games under operation in
mainland China were approximately 717,000, an increase of 15.8% from
2Q08 and 39.8% from 3Q07
-- Active paying customers (APC) for games operated in mainland China
under the item-based revenue model were approximately 1,610,000, an
increase of 5.3% from 2Q08 and 16.1% from 3Q07
-- Average revenue per active paying customer (ARPU) for games operated in
mainland China under the item-based revenue model was RMB196, an
increase of 4.2% from 2Q08 and 44.5% from 3Q07
-- Launched unlimited closed beta testing for "Pocketpet Journey West",
the Company's pet-themed 3D massively multiplayer online role playing
game ("MMORPG") on July 17, 2008
-- Rolled out expansion packs including "The Return of the Storm" for
"Legend of Martial Arts", "Hot Dance Party 2.0" and "Dream Club" for
"Hot Dance Party", "Mazy Treasure Island" for "Perfect World", and
"Asura Battlefield" for "Perfect World II"
-- Launched "Perfect Carnival", a series of large-scale campaigns
including a cooperation with Intel to promote Perfect World's brand,
promotion activities at the ChinaJoy Game Show and the celebration of
the first anniversary of Perfect World's listing on Nasdaq
-- Entered into agreements with respective overseas operators to license
"Perfect World II" in around forty countries in Europe, "Hot Dance
Party" in Vietnam, Thailand, Malaysia and Singapore, and "Legend of
Martial Arts" in Korea
-- Launched open beta testing for "Perfect World II" in North America in
the name of "Perfect World International" through the Company's U.S.
subsidiary in September 2008
-- Launched "Perfect World II" in Indonesia in August 2008, "Chi Bi" in
Malaysia and Singapore in August 2008, and "Chi Bi" in Taiwan, Hong
Kong and Macau in September 2008 through various overseas operators
* The U.S. dollar (USD) amounts disclosed in this press release are
presented solely for the convenience of the reader. The
conversion of Renminbi (RMB) into USD in this release is based on
the noon buying rate in The City of New York for cable transfers
in RMB per USD as certified for customs purposes by the Federal
Reserve Bank of New York as of September 30, 2008, which was
RMB6.7899 to USD1.00. The percentages stated are calculated
based on RMB.
"We are pleased to announce strong third quarter results, which once again came in line with our expectations," commented Mr. Michael Chi, Chairman and Chief Executive Officer of Perfect World. "Our proprietary game development platform continues to be successful in quickly introducing new games and expansion packs to the market. As we continue to strategically focus on developing a sustainable pipeline of games that capitalize on the growth of the online game market in China, we will be well positioned to increase user base and drive growth."
"Recently, we have had many promising business developments such as a successful launch of open beta testing for 'Pocketpet Journey West.' We continue to focus on strengthening our pipeline, with five MMORPGs currently under in-house development. We plan to launch closed beta testing for 'Battle of the Immortals,' a new adventure themed MMORPG, by the end of this year. We also recently acquired an online game named 'Meteor Online' and an exclusive license of the sales and publishing rights to an online game developed based on XiaoAoJiangHu, which are both further additions to our strong pipeline."
"Our overseas development efforts have also progressed, as we remain fully committed to expanding our presence globally. In September, we launched open beta testing for 'Perfect World II' in the name of 'Perfect World International' in North America through our wholly-owned U.S. subsidiary. Furthermore, we successfully launched our games in multiple Asian countries through respective overseas operators in the past quarter. We also signed various new licensing agreements in Asia and Europe, which has served to increase our global footprint. I am also excited to announce that we recently took a minority stake in a newly established Chinese media and entertainment company. We believe that this strategic investment will not only benefit our game development capabilities by providing us with the newest game ideas, but also create synergies through co-promotion techniques. We are confident in our ability to execute our stated growth strategy and have announced a share repurchase program of up to USD100 million of our ADSs through October 2009. We will continue to emphasize on strengthening our proprietary game development platform to deepen our position as a leading player in the Chinese online game market. At the same time, we are also rapidly expanding our position in the global online gaming market through promising collaborations with overseas partners."
Third Quarter 2008 Financial Results
Total Revenues
Total revenues were RMB381.8 million (USD56.2 million) in 3Q08, an increase of 14.2%, or RMB47.4 million, from RMB334.4 million in 2Q08 and an increase of 78.5%, or RMB167.9 million, from RMB213.9 million in 3Q07.
Online game operation revenues were RMB324.5 million (USD 47.8 million) in 3Q08, an increase of 8.4%, or RMB 25.1 million, from RMB299.4 million in 2Q08 and an increase of 64.3%, or RMB127.0 million, from RMB197.4 million in 3Q07. The sequential increase in online game operation revenues was primarily attributable to the successful launch of unlimited closed beta testing for "Pocketpet Journey West", the successful launch of expansion packs for some of the Company's existing games and the positive market response from recent marketing campaigns.
The ACU for games under operation in mainland China was approximately 717,000 in 3Q08, an increase of 15.8%, or 98,000, from 619,000 in 2Q08 and an increase of 39.8%, or 204,000, from 513,000 in 3Q07. The APC for games operated in mainland China under the item-based revenue model was approximately 1,610,000 in 3Q08, an increase of 5.3%, or 80,000, from 1,530,000 in 2Q08 and an increase of 16.1%, or 223,000, from 1,387,000 in 3Q07. The ARPU for games operated in mainland China under the item-based revenue model was RMB196 in 3Q08, an increase of 4.2%, or RMB8, from RMB188 in 2Q08 and an increase of 44.5%, or RMB60, from RMB136 in 3Q07.
Overseas licensing revenues were RMB57.3 million (USD8.4 million) in 3Q08, an increase of 63.7%, or RMB22.3 million, from RMB35.0 million in 2Q08 and an increase of 249.0%, or RMB40.9 million, from RMB16.4 million in 3Q07. The increase from 2Q08 was mainly due to an increase in usage-based royalty fees in relation to the launch of "Zhu Xian" in Taiwan in June 2008, and an increase in initial license fee associated with the launch of "Chi Bi" in Malaysia in August 2008 and in Taiwan in September 2008.
Cost of Revenues
The cost of revenues was RMB47.3 million (USD7.0 million) in 3Q08, an increase of 14.9%, or RMB6.1 million, from RMB41.1 million in 2Q08 and an increase of 33.5%, or RMB11.9 million, from RMB35.4 million in 3Q07. The increase from 2Q08 was mainly due to an increase in VAT and other related taxes, and an increase in staff costs in connection with the U.S. and Beijing operation.
Gross Profit and Gross Margin
Gross profit was RMB334.5 million (USD49.3 million) in 3Q08, an increase of 14.1%, or RMB41.3 million, from RMB293.3 million in 2Q08, and an increase of 87.5%, or RMB156.1 million, from RMB178.5 million in 3Q07. Gross margin was 87.6% in 3Q08, as compared to 87.7 % in 2Q08 and 83.4% in 3Q07.
Operating Expenses
Operating expenses were RMB134.5 million (USD19.8 million) in 3Q08, an increase of 5.7%, or RMB7.2 million, from RMB127.3 million in 2Q08, and an increase of 116.9%, or RMB72.5 million, from RMB62.0 million in 3Q07. The sequential increase in operating expenses was mainly attributed to higher R&D expenses and general and administrative expenses, partially offset by a decrease in sales and marketing expenses.
R&D expenses increased by 49.2%, or RMB15.5 million, from RMB31.5 million in 2Q08 to RMB47.0 million (USD6.9 million) in 3Q08. This was primarily due to an increase in staff cost associated with the expansion in Shanghai and Beijing.
Sales and marketing expenses decreased by 16.9%, or RMB12.5 million, from RMB73.8 million in 2Q08 to RMB61.4 million (USD9.0 million) in 3Q08. This was primarily attributable to a deduction in advertising and promotional expenses associated with a more effective marketing campaign strategy.
General and administrative expenses increased by 18.8%, or RMB4.1 million, from RMB22.0 million in 2Q08 to RMB26.1 million (USD3.8 million) in 3Q08. This was primarily due to an increase in staff cost in connection with the expansion in Shanghai and Beijing.
Operating Profit
Operating profit was RMB200.0 million (USD29.5 million) in 3Q08, an increase of 20.5%, or RMB34.0 million, from RMB166.0 million in 2Q08, and an increase of 71.8%, or RMB83.6 million, from RMB116.4 million in 3Q07.
Total Other Income
Total other income was RMB7.6 million (USD1.1 million) in 3Q08, an increase of 99.1%, or RMB3.8 million, from RMB3.8 million in 2Q08, and a decrease of 18.6%, or RMB1.7 million, from RMB9.3 million in 3Q07. The difference from 2Q08 was primarily due to a one-time donation of RMB3.0 million to the Sichuan earthquake relief efforts in 2Q08.
Income Tax Expense
Income tax expense was RMB8.8 million (USD1.3 million) in 3Q08, an increase of 66.4%, or RMB3.5 million, from RMB5.3 million in 2Q08 and an increase of 268.3%, or RMB6.4 million, from RMB2.4 million in 3Q07. Income tax expense represents withholding income tax for overseas licensing revenues. The increase from 2Q08 was mainly due to the increase in overseas licensing revenues.
Net Income
Net income was RMB198.8 million (USD29.3 million) in 3Q08, an increase of 20.9%, or RMB34.3 million, from RMB164.5 million in 2Q08, and an increase of 61.2%, or RMB75.5 million, from RMB123.3 million in 3Q07. Basic and diluted earnings per ADS were RMB3.53 (USD0.52) and RMB3.34 (USD0.49), respectively, in 3Q08, as compared to basic and diluted earnings per ADS of RMB2.93 and RMB2.76, respectively, in 2Q08, and basic and diluted earnings per ADS of RMB2.51 and RMB2.18, respectively, in 3Q07.
Cash and Cash Equivalents
As of September 30, 2008, the Company had RMB1.3 billion (USD195.9 million) of cash and cash equivalents, an increase of 17.5%, or RMB198.4 million, from RMB1.1 billion as of June 30, 2008. The increase was mainly due to the net cash inflow generated from the Company's online game operations and overseas licensing.
Recent Developments
Open Beta Testing for "Pocketpet Journey West"
The Company launched open beta testing for "Pocketpet Journey West," the Company's pet-themed 3D MMORPG on October 16, 2008.
Asset Transfer and License Agreement with InterServ
In October 2008, the Company entered into an agreement with Global InterServ (B.V.I.) Inc., a subsidiary of InterServ International Inc. (GTSM: 6169), a Taiwan-based game developer ("InterServ"), to acquire an online game named Meteor Online, an exclusive license of the sales and publishing rights to an online game developed based on XiaoAoJiangHu, the famous book authored by Louis Cha, and a license to use InterServ's cross-platform game development engine. The aggregate transaction consideration is approximately USD15.0 million, and the Company will not pay additional royalties for the above licenses. These additions are expected to further diversify the Company's pipeline and enhance its game portfolio.
New Expansion Pack
The Company launched "Horseback Fighters" expansion pack for "Chi Bi" on October 23, 2008.
New Overseas Licensing Agreement
The Company entered into a new overseas licensing agreement in October 2008 with C&C Media Co., Ltd. to license "Chi Bi" in Japan.
New Overseas Launches
The Company launched "Legend of Martial Arts" in Thailand in October 2008 and "Zhu Xian" in Japan in November 2008 through respective overseas operators.
Minority Investment in Beijing Perfect World Cultural Communication Co., Ltd.
Perfect World invested RMB3.0 million for a minority stake in Beijing Perfect World Cultural Communication Co., Ltd., a newly established Chinese media and entertainment company. This new company was named after Perfect World in order to leverage Perfect World's well-established brand name. This strategic investment is expected to benefit the Company by providing the newest ideas for game content generation while creating synergies through co-promotion activities.
Share Repurchase Program
The board has duly authorized Perfect World to repurchase up to USD100 million of its own American Depositary Shares ("ADSs") during the period from October 2008 to October 2009.
Business Outlook
Based on the Company's current operations, total revenues for the fourth quarter of 2008 are expected to be between RMB401 million and RMB420 million. This represents an increase of 5% - 10% on a sequential basis and reflects expected growth from existing games and newly launched "Pocketpet Journey West."
In terms of pipeline, the Company currently has five MMORPGs under in-house development. Closed beta testing for "Battle of the Immortals" is expected to be launched by the end of 2008.
Conference Call
Perfect World will host a conference call and live webcast at 8:00 a.m. Eastern Standard Time (EST) (9:00 p.m., Beijing time) on Monday, November 10, 2008.
The dial-in details for the live conference call are as follows:
U.S. Toll Free Number: 1-866-586-2813
International Dial-in Number: +61-2-8524-6650
Mainland China Toll Free Number: 10-800-361-0079
Hong Kong Toll Free Number: 80-096-5808
U.K. Toll Free Number: 080-0056-9662
Conference ID: PWRD
A live and archived webcast of the conference call will be available on the Investor Relations section of Perfect World's website at http://www.pwrd.com .
A telephone replay of the call will be available after the conclusion of the conference call through 10:00 a.m. Eastern Standard Time, November 17, 2008.
The dial-in details for the replay are as follows:
U.S. Toll Free Number: 1-866-214-5335
International Dial-in Number: +61-2-8235-5000
Conference ID: PWRD
About Perfect World Co., Ltd. ( http://www.pwrd.com )
Perfect World Co., Ltd. (Nasdaq: PWRD) is a leading online game developer and operator in China. Perfect World primarily develops three-dimensional ("3D") online games based on the proprietary Angelica 3D game engine and game development platform. The Company's strong technology and creative game design capabilities, combined with extensive local knowledge and experience, enable it to frequently and rapidly introduce popular games that are designed to cater to changing customer preferences and market trends in China. The Company's current portfolio of self-developed online games includes 3D massively multiplayer online role playing games ("MMORPGs"): "Perfect World," "Legend of Martial Arts," "Perfect World II," "Zhu Xian," "Chi Bi" and "Pocketpet Journey West;" and a 3D online casual game: "Hot Dance Party." While most revenues are generated in China, the Company's games have been licensed to leading game operators in a number of countries and regions in Asia, Europe and South America. The Company plans to continue to explore new and innovative business models and remains deeply committed to maximizing shareholder value over time.
Safe Harbor Statements
This press release contains forward-looking statements. These statements constitute forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the management's quotations and "Business Outlook" contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, our limited operating history, our ability to develop and operate new games that are commercially successful, the growth of the online game market and the continuing market acceptance of our games and in-game items in China and elsewhere, our ability to protect our intellectual property rights, our ability to respond to competitive pressure, our ability to maintain an effective system of internal control over financial reporting, changes of the regulatory environment in China, and economic slowdown in China and/or elsewhere. Further information regarding these and other risks is included in Perfect World's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. All information provided in this press release and in the attachments is as of November 10, 2008, and Perfect World does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Perfect World Co., Ltd.
Consolidated Balance Sheets
Audited Unaudited Unaudited
December 31, September 30, September 30,
2007 2008 2008
RMB RMB USD
Assets
Current assets
Cash and cash equivalents 1,496,032,993 1,329,808,557 195,850,978
Short-term investments -- 50,000,000 7,363,879
Accounts receivable 16,796,527 34,134,930 5,027,310
Prepayments and other
assets 22,112,949 38,338,390 5,646,386
Deferred tax assets 731,142 1,521,495 224,082
Total current assets 1,535,673,611 1,453,803,372 214,112,635
Non current assets
Equity investments -- 23,028,711 3,391,613
Property, equipment, and
software, net 107,331,206 170,416,267 25,098,494
Construction in progress -- 712,404,995 104,921,279
Intangible assets, net 1,723,048 960,210 141,417
Prepayments and other
assets 20,283,302 4,618,819 680,248
Deferred tax assets 730,180 721,304 106,232
Total assets 1,665,741,347 2,365,953,678 348,451,918
Liabilities and Shareholders'
Equity
Current liabilities
Accounts payable 23,464,378 21,801,788 3,210,914
Advances from customers 49,672,384 76,108,227 11,209,035
Salary and welfare payable 30,901,115 43,593,154 6,420,294
Taxes payable 13,374,892 20,139,464 2,966,091
Accrued expenses and other
liabilities 14,175,638 29,166,367 4,295,552
Deferred revenues 123,310,935 218,882,033 32,236,415
Deferred government grants 1,100,000 1,600,000 235,644
Total current liabilities 255,999,342 411,291,033 60,573,945
Deferred revenues 19,365,787 13,339,550 1,964,617
Other long-term payable -- 28,000,000 4,123,772
Total liabilities 275,365,129 452,630,583 66,662,334
Commitments
Shareholders' Equity
Ordinary shares (US$0.0001 par
value, 10,000,000,000 shares
authorized, 91,309,730 Class A
ordinary shares and 187,975,990
Class B ordinary shares issued
and outstanding as of December 31,
2007; 77,385,480 Class A ordinary
shares and 207,847,340 Class B
ordinary shares issued and
outstanding as of
September 30, 2008) 221,081 222,900 32,828
Additional paid-in capital 1,124,169,036 1,159,787,490 170,810,688
Statutory reserves 29,919,175 29,919,175 4,406,424
Accumulated other
comprehensive loss (31,771,062) (66,091,160) (9,733,746)
Retained earnings 267,837,988 789,484,690 116,273,390
Total Shareholders' Equity 1,390,376,218 1,913,323,095 281,789,584
Total Liabilities and
Shareholders' Equity 1,665,741,347 2,365,953,678 348,451,918
Perfect World Co., Ltd.
Unaudited Consolidated Statements of Operations
Three months ended
September 30, June 30,
2007 2008
RMB RMB
Revenues
Online game operation revenues 197,444,414 299,397,364
Overseas licensing revenues 16,422,947 35,015,395
Total Revenues 213,867,361 334,412,759
Cost of revenues (35,405,618) (41,121,388)
Gross profit 178,461,743 293,291,371
Operating expenses
Research and development expenses (13,590,762) (31,513,638)
Sales and marketing expenses (37,904,624) (73,823,711)
General and administrative
expenses (10,539,458) (21,996,244)
Total operating expenses (62,034,844) (127,333,593)
Operating profit 116,426,899 165,957,778
Other income/(expenses)
Investment loss -- (292,263)
Interest income 9,594,555 8,082,012
Others, net (298,604) (3,988,788)
Total other income 9,295,951 3,800,961
Profit before tax 125,722,850 169,758,739
Income tax expense (2,381,058) (5,269,372)
Net Profit 123,341,792 164,489,367
Cumulative unearned dividends of
Series A Preferred Share (207,878) --
Net profit attributable to ordinary
shareholders 123,133,914 164,489,367
Net earnings per share, basic 0.50 0.59
Net earnings per share, diluted 0.44 0.55
Net earnings per ADS, basic 2.51 2.93
Net earnings per ADS, diluted 2.18 2.76
Shares used in calculating basic net
earnings per share 245,318,329 281,166,704
Shares used in calculating diluted net
earnings per share 282,331,579 297,747,140
Total share-based compensation cost
included in:
Cost of revenues (31,815) (674,389)
Research and development expenses (377,776) (5,167,248)
Sales and marketing expenses (282,867) (1,191,446)
General and administrative
expenses (1,920,586) (4,822,002)
(Cont.)
Three months ended
September 30, September 30,
2008 2008
RMB USD
Revenues
Online game operation revenues 324,484,312 47,789,262
Overseas licensing revenues 57,317,936 8,441,647
Total Revenues 381,802,248 56,230,909
Cost of revenues (47,256,941) (6,959,888)
Gross profit 334,545,307 49,271,021
Operating expenses
Research and development expenses (47,033,562) (6,926,989)
Sales and marketing expenses (61,371,931) (9,038,709)
General and administrative expenses (26,135,551) (3,849,181)
Total operating expenses (134,541,044) (19,814,879)
Operating profit 200,004,263 29,456,142
Other income/(expenses)
Investment loss (414,026) (60,977)
Interest income 7,724,046 1,137,579
Others, net 259,476 38,215
Total other income 7,569,496 1,114,817
Profit before tax 207,573,759 30,570,959
Income tax expense (8,770,012) (1,291,626)
Net Profit 198,803,747 29,279,333
Cumulative unearned dividends of
Series A Preferred Share -- --
Net profit attributable to ordinary
shareholders 198,803,747 29,279,333
Net earnings per share, basic 0.71 0.10
Net earnings per share, diluted 0.67 0.10
Net earnings per ADS, basic 3.53 0.52
Net earnings per ADS, diluted 3.34 0.49
Shares used in calculating basic net
earnings per share 281,733,114 281,733,114
Shares used in calculating diluted net
earnings per share 297,574,386 297,574,386
Total share-based compensation cost
included in:
Cost of revenues (854,899) (125,907)
Research and development expenses (5,885,419) (866,790)
Sales and marketing expenses (1,315,404) (193,730)
General and administrative expenses (5,304,841) (781,284)
Perfect World Co., Ltd.
Unaudited Consolidated Statements of Cash Flows
Three months ended
September 30, June 30,
2007 2008
RMB RMB
Cash flows from operating activities:
Net profit 123,341,792 164,489,367
Adjustments for:
Share-based compensation cost 2,613,044 11,855,085
Depreciation and amortization expense 2,015,326 5,165,497
Exchange loss 302,708 1,743,894
Investment loss -- 292,263
Changes in assets and liabilities:
Accounts receivable (9,076,518) (1,268,471)
Current prepayments and other assets (8,160,418) (14,541,991)
Deferred tax assets (312,045) (662,787)
Non-current prepayments and other
assets (1,273,788) 467,091
Accounts payable (1,438,383) (10,230,826)
Advances from customers 26,499,279 (59,015,448)
Salary and welfare payable 3,414,273 8,203,906
Taxes payable 3,011,637 2,858,186
Accrued expenses and other
liabilities 4,194,478 2,943,696
Deferred revenues 28,155,289 18,569,486
Deferred government grants -- 350,000
Net cash provided by operating
activities 173,286,674 131,218,948
Cash flows from investing activities:
Purchase of property, equipment and
software (5,428,898) (511,927,172)
Purchase of short-term investments -- (50,000,000)
Cash paid for equity investments -- (20,735,000)
Net cash used in investing activities (5,428,898) (582,662,172)
Cash flows from financing activities:
Exercise of share options -- 1,388,550
Proceeds from IPO, net of issuance
costs 1,018,570,591 --
Net cash provided by financing
activities 1,018,570,591 1,388,550
Effect of exchange rate changes on
cash and cash equivalents (9,026,267) (6,600,075)
Net increase/(decrease) in cash 1,177,402,100 (456,654,749)
Cash and cash equivalents,
beginning of the period 236,166,827 1,588,055,501
Cash and cash equivalents,
end of the period 1,413,568,927 1,131,400,752
Supplemental schedule of non-cash
financing activities:
Conversion of Series A preferred
shares into common shares 61,796,533 --
Supplemental disclosures of cash
flow information:
Cash paid during the period for
income taxes (2,005,418) (5,600,017)
(Cont.)
Three months ended
September 30, September 30,
2008 2008
RMB USD
Cash flows from operating activities:
Net profit 198,803,747 29,279,333
Adjustments for:
Share-based compensation cost 13,360,563 1,967,711
Depreciation and amortization
expense 5,989,719 882,153
Exchange loss 212,346 31,274
Investment loss 414,026 60,977
Changes in assets and liabilities:
Accounts receivable (15,080,639) (2,221,040)
Current prepayments and other
assets 2,560,308 377,076
Deferred tax assets (107,018) (15,761)
Non-current prepayments and
other assets 481,283 70,882
Accounts payable (9,795,333) (1,442,633)
Advances from customers 19,223,380 2,831,173
Salary and welfare payable 18,471,056 2,720,372
Taxes payable 1,172,897 172,741
Accrued expenses and other
liabilities 3,573,703 526,326
Deferred revenues 26,051,626 3,836,820
Deferred government grants 150,000 22,092
Net cash provided by operating
activities 265,481,664 39,099,496
Cash flows from investing activities:
Purchase of property, equipment
and software (62,749,284) (9,241,562)
Purchase of short-term
investments -- --
Cash paid for equity investments (3,000,000) (441,833)
Net cash used in investing
activities (65,749,284) (9,683,395)
Cash flows from financing
activities:
Exercise of share options 264,090 38,895
Proceeds from IPO, net of
issuance costs -- --
Net cash provided by financing
activities 264,090 38,895
Effect of exchange rate changes
on cash and cash equivalents (1,588,665) (233,976)
Net increase/(decrease) in cash 198,407,805 29,221,020
Cash and cash equivalents,
beginning of the period 1,131,400,752 166,629,958
Cash and cash equivalents, end
of the period 1,329,808,557 195,850,978
Supplemental schedule of
non-cash financing activities:
Conversion of Series A preferred
shares into common shares -- --
Supplemental disclosures of cash
flow information:
Cash paid during the period for
income taxes (4,365,085) (642,879)
For more information, please contact:
Perfect World Co., Ltd.
Vivien Wang
Investor Relations Officer
Tel: +86-10-5885-1813
Fax: +86-10-5885-6899
Email: ir@pwrd.com
Web: http://www.pwrd.com
Christensen Investor Relations
Kathy Li
Tel: +1-480-614-3036
Fax: +1-480-614-3033
Email: kli@christensenir.com
Roger Hu
Tel: +852-2117-0861
Fax: +852-2117-0869
Email: rhu@christensenir.com
