BEIJING, Aug. 18 /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 second quarter ended June 30, 2008.
Second Quarter 2008 Highlights(1)
-- Total revenues were RMB334.4 million (USD48.8 million), an increase of
10.3% from 1Q08 and 157.8% from 2Q07
-- Gross profit was RMB293.3 million (USD42.8 million), an increase of
10.4% from 1Q08 and 182.2% from 2Q07
-- Operating profit was RMB166.0 million (USD24.2 million), an increase of
2.7% from 1Q08 and 204.7% from 2Q07
-- Net income was RMB164.5 million (USD24.0 million), an increase of 3.9%
from 1Q08 and 214.1% from 2Q07
-- Basic and diluted earnings per ADS were RMB2.93 (USD0.43) and RMB2.76
(USD0.40), respectively, as compared to basic and diluted earnings per
ADS of RMB2.83 and RMB2.67, respectively, in 1Q08, and basic and
diluted earnings per ADS of RMB1.67 and RMB1.06, respectively, in 2Q07
-- Aggregate average concurrent users (ACU) for games under operation were
approximately 619,000, as compared to 660,000 in 1Q08 and 446,000 in
2Q07
-- Active paying customers (APC) for games under the item-based revenue
model were approximately 1,530,000, as compared to 1,701,000 in 1Q08
and 1,036,000 in 2Q07
-- Average revenue per active paying customer (ARPU) for games under the
item-based revenue model was RMB188, an increase of 24.9% from 1Q08 and
92.2% from 2Q07
-- Launched closed beta testing for “Pocketpet Journey West,” the
Company’s latest pet-themed 3D MMORPG, on June 26, 2008
-- Launched expansion packs for the Company’s MMORPGs, including “Crown
the World Throne” and “Samsara in the Six Realms” for “Zhu Xian,”
“Overlord of the Continent” for “Chi Bi” and “Burning Anger of the
God’s” for “Perfect World II”
-- Held the “Innovation and Intelligence College Tour,” a series of
promotions at various colleges in a number of big cities in China, to
provide innovative and interactive experience to online game players at
college
-- Entered into a new overseas licensing agreement in April 2008 with
Soft-World International Corp. to license “Zhu Xian” in Taiwan, Hong
Kong and Macau
-- Entered into a new overseas licensing agreement in April 2008 with C&C
Media Co., Ltd. to license “Zhu Xian” in Japan
-- Entered into a new licensing agreement in May 2008 with Cubinet
Interactive(s) Pte. Ltd. to license “Chi Bi” in Vietnam, Thailand,
Malaysia and Singapore
-- Entered into new licensing agreements in June 2008 with Taiwan Index
Corporation Ltd. to license “Chi Bi” in Taiwan and Gamania Digital
Entertainment (H.K.) Co., Ltd. to license “Chi Bi” in Hong Kong and
Macau, both of which are subsidiaries of Gamania Digital Entertainment
Co., Ltd, a major online game developer, publisher and operator in
Taiwan
-- Entered into a new licensing agreement in June 2008 with IP E-Game
Ventures Inc. to operate “Zhu Xian” in the Philippines
-- Launched “Perfect World II” in Brazil through Level Up! Interactive
S.A. in May 2008
-- Launched “Perfect World II” in Russia Federation and other Russian
speaking territories through Nival Online LLC in June 2008
-- Launched “Zhu Xian” in Taiwan, Hong Kong and Macau through Soft-World
International Corp. at the end of June 2008
-- Established the Company’s wholly owned U.S. subsidiary, Perfect World
Entertainment Inc., in April 2008
-- Made a strategic investment in Chengdu Seasky Digital Entertainment Co.,
Ltd., a company principally engaged in the design and development of
online games in China, in April 2008
(1) 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 June 30, 2008, which was RMB6.8591 to USD1.00.
The percentages stated are calculated based on RMB.
“We are pleased to report our continued strong growth in the second quarter of 2008, which came in line with our raised guidance,” commented Mr. Michael Chi, Chairman and Chief Executive Officer of Perfect World. “I believe our ability to enhance our game development platform, quickly introduce new games and expansion packs to the market, and diversify our product portfolio will further enhance the sustainability of our pipeline of games and continue to be a key growth driver for us. Our results were strong despite the impact of the Sichuan earthquake and the related three day suspension of our service. Because of this, our ACU and APC dropped, but we were actually able to increase our ARPU through a series of successful marketing campaigns and the launch of new expansion packs for ‘Zhu Xian,’ ‘Chi Bi’ and ‘Perfect World II.’ As a result, I believe our efforts helped to solidify our leading position in the domestic online game market.”
“We successfully launched closed beta testing for ‘Pocketpet Journey West,’ our latest pet-themed 3D MMORPG in June 2008. Given the positive feedback we have received and to allow more online game players to enjoy this game, we also launched unlimited closed beta testing on July 17, 2008. We target to launch open beta testing at the end of third quarter or early fourth quarter of 2008. Developing a sustainable pipeline to capture the opportunities brought by the growth of the online game market continues to be our key strategic focus. We currently have five MMORPGs under development, including one that is expected to be launched by the end of 2008, and another that is expected to be launched at the end of 2008 or early 2009. In terms of overseas development, we signed a number of new licensing agreements in the past quarter, which extended the global reach of our products and demonstrated our commitment to expanding our business globally. Moreover, we plan to launch “Perfect World II” through our U.S. subsidiary in North America and we have scheduled the launch of closed beta testing on August 19, 2008. Our efforts to customize this game for the North American market are expected to facilitate its successful launch. I’m also pleased to announce that we are in the process of developing a Chinese literature website to provide online reading and related services. I believe this website will help create synergy within our business model, capture innovative ideas, and facilitate the growth of our online community. We remain committed to executing our growth strategies and I believe our continued stream of new game releases along with a steady flow of new expansion packs will not only strengthen our position as a leading player in the Chinese online game market, but also help position us in the long-term as a leading player in the global online gaming market.”
Second Quarter 2008 Financial Results
Total Revenues
Total revenues were RMB334.4 million (USD48.8 million) in 2Q08, an increase of 10.3%, or RMB31.3 million, from RMB303.2 million in 1Q08 and an increase of 157.8%, or RMB204.7 million, from RMB129.7 million in 2Q07.
Online game operation revenues were RMB299.4 million (USD43.6 million) in 2Q08, an increase of 13.2%, or RMB34.9 million, from RMB264.5 million in 1Q08 and an increase of 168.5%, or RMB187.9 million, from RMB111.5 million in 2Q07. The sequential increase in online game operation revenues was primarily attributable to a full quarter of revenue contribution from Chi Bi, the successful launch of expansion packs for some of the Company’s existing MMORPGs and the positive market response from recent marketing campaigns. In addition, as the user base of the Company’s games keep expanding while the accumulated number of inactive accounts has also continued to grow, in 2Q08 we began to enforce our rights to close a player’s game account that has been inactive for 360 consecutive days. Revenues recognized from the inactive accounts were approximately RMB8.4 million in 2Q08. The Company will continue to implement this policy and recognize revenues from inactive accounts on a quarterly basis.
The ACU was approximately 619,000 in 2Q08, as compared to 660,000 in 1Q08 and 446,000 in 2Q07. The APC for games under the item-based revenue model was approximately 1,530,000 in 2Q08, as compared to 1,701,000 in 1Q08 and 1,036,000 in 2Q07. The ARPU for games under the item-based revenue model was RMB188 in 2Q08, an increase of 24.9%, or RMB37, from RMB151 in 1Q08 and an increase of 92.2%, or RMB90, from RMB98 in 2Q07. While ACU and APC decreased by 6.2% and 10.1% from 1Q08, which was mainly due to the Sichuan earthquake, the following three day suspension of game service, and the continued impact after the earthquake for a certain period of time, the Company still managed to increase ARPU by 24.9% through a series of successful promotions and the launch of new expansion packs for “Zhu Xian,” “Chi Bi,” and “Perfect World II.”
Overseas licensing revenues were RMB35.0 million (USD5.1 million) in 2Q08, a decrease of 9.5%, or RMB3.7 million, from RMB38.7 million in 1Q08 and an increase of 92.6%, or RMB16.8 million, from RMB18.2 million in 2Q07. The decrease from 1Q08 was mainly due to a decrease in usage-based royalty fees from the Taiwan market, partially offset by an increase in initial license fee in relation to the launch of “Zhu Xian” in Taiwan, Hong Kong and Macau on June 30, 2008.
Cost of Revenues
The cost of revenues was RMB41.1 million (USD6.0 million) in 2Q08, an increase of 9.5%, or RMB3.6 million, from RMB37.5 million in 1Q08 and an increase of 59.6%, or RMB15.4 million, from RMB25.8 million in 2Q07. The increase from 1Q08 was mainly due to an increase in VAT and other related taxes, staff costs and server repair and maintenance expenses.
Gross Profit and Gross Margin
Gross profit was RMB293.3 million (USD42.8 million) in 2Q08, an increase of 10.4%, or RMB27.7 million, from RMB265.6 million in 1Q08, and an increase of 182.2%, or RMB189.3 million, from RMB103.9 million in 2Q07. Gross margin was 87.7% in 2Q08, as compared to 87.6 % in 1Q08 and 80.1% in 2Q07.
Operating Expenses
Operating expenses were RMB127.3 million (USD18.6 million) in 2Q08, an increase of 22.4%, or RMB23.3 million, from RMB104.0 million in 1Q08, and an increase of 157.3%, or RMB77.9 million, from RMB49.5 million in 2Q07. The sequential increase in operating expenses was mainly attributed to higher R&D expenses, sales and marketing expenses and general and administrative expenses.
R&D expenses increased by 34.6%, or RMB8.1 million, from RMB23.4 million in 1Q08 to RMB31.5 million (USD4.6 million) in 2Q08. This was primarily due to an increase in staff cost and share-based compensation associated with the expansion in Shanghai and Beijing.
Sales and marketing expenses increased by 21.7%, or RMB13.2 million, from RMB60.7 million in 1Q08 to RMB73.8 million (USD10.8 million) in 2Q08. This was largely due to an increase in advertising and promotional expenses associated with the launch of “Hot Dance Party” and the pre-launch of “Pocketpet Journey West,” and an expansion of the promotional team on the ground at internet cafes across China.
General and administrative expenses increased by 10.3%, or RMB2.1 million, from RMB19.9 million in 1Q08 to RMB22.0 million (USD3.2 million) in 2Q08. This was primarily due to an increase in staff cost in connection with the newly established U.S. subsidiary and an increase in professional fees.
Operating Profit
Operating profit was RMB166.0 million (USD24.2 million) in 2Q08, an increase of 2.7%, or RMB4.4 million, from RMB161.6 million in 1Q08, and an increase of 204.7%, or RMB111.5 million, from RMB54.5 million in 2Q07.
Total Other Income
Total other income was RMB3.8 million (USD0.6 million) in 2Q08, an increase of 57.7%, or RMB1.4 million, from RMB2.4 million in 1Q08, and an increase of 381.3%, or RMB3.0 million, from RMB0.8 million in 2Q07. The increase from 1Q08 was primarily due to a decrease in realized foreign exchange loss of approximately RMB8.6 million, partially offset by a decrease in interest income of approximately RMB3.6 million and a one-time donation of RMB3.0 million to the Sichuan earthquake relief efforts in 2Q08. The lower foreign exchange loss and the drop in interest income were both primarily due to the lower U.S. dollar cash balance following the payments for the newly purchased office premises.
Income Tax Expense
Income tax expense was RMB5.3 million (USD0.8 million) in 2Q08, a decrease of 6.7%, or RMB0.4 million, from RMB5.6 million in 1Q08 and an increase of 82.2%, or RMB2.4 million, from RMB2.9 million in 2Q07. Income tax expense represents withholding income tax for overseas licensing revenues. The decrease from 1Q08 was mainly due to the decrease in overseas licensing revenues.
Net Income
Net income was RMB164.5 million (USD24.0 million) in 2Q08, an increase of 3.9%, or RMB6.1 million, from RMB158.4 million in 1Q08, and an increase of 214.1%, or RMB112.1 million, from RMB52.4 million in 2Q07. Basic and diluted earnings per ADS were RMB2.93 (USD0.43) and RMB2.76 (USD0.40), respectively, in 2Q08, as compared to basic and diluted earnings per ADS of RMB2.83 and RMB2.67, respectively, in 1Q08, and basic and diluted earnings per ADS of RMB1.67 and RMB1.06, respectively, in 2Q07.
Cash and Cash Equivalents
As of June 30, 2008, the Company had RMB1.1 billion (USD165.0 million) of cash and cash equivalents, a decrease of 28.8%, or RMB456.7 million, from RMB1.6 billion as of March 31, 2008. The decrease was mainly due to the payments of consideration for the acquisition of the new office premises, the cash outflow for investment in structured deposit, and the investment made in Chengdu Seasky Digital Entertainment Co., Ltd., partially offset by the net cash inflow generated from the Company’s online game operations and overseas licensing.
Recent Developments
Chinese Literature Website
The Company is in the process of developing a Chinese literature website to provide online reading and related services. The website is expected to help the Company capture innovative ideas, create synergy within its business model and facilitate the growth of the Company’s online community.
Launched Unlimited Closed Beta Testing for “Pocketpet Journey West”
The Company launched unlimited closed beta testing for “Pocketpet Journey West” which allows users to buy in-game items on July 17, 2008.
Rolled Out New Expansion Packs
The Company launched “The Return of the Storm” expansion pack for “Legend of Martial Arts” on July 24, 2008, the “Hot Dance Party 2.0” expansion pack on August 5, 2008, the “Mazy Treasure Island” expansion pack for “Perfect World” on August 6, 2008, and the “Asura Battlefield” expansion pack for “Perfect World II” on August 13, 2008.
Scheduled to Launch “Perfect World II” through Perfect World Entertainment Inc. in North America
The Company will launch a localized version of “Perfect World II” through its wholly owned U.S. subsidiary, Perfect World Entertainment Inc., in North America in the name of “Perfect World International.” The closed beta testing has been scheduled on August 19, 2008, while the game’s official website has already been successfully launched.
Entered into New Overseas Licensing Agreements with Games-Masters.com Ltd. for “Perfect World II”
On July 24, 2008, the Company signed new licensing agreements with Games-Masters.com Ltd., a game operator in the United Kingdom, to license “Perfect World II” in around forty European countries.
Entered into a New Overseas Licensing Agreement with Cubinet Interactive(s) Pte. Ltd. for “Hot Dance Party”
On August 10, 2008, the Company entered into a new overseas licensing agreement with Cubinet Interactive(s) Pte. Ltd. to license “Hot Dance Party” in Vietnam, Thailand, Malaysia and Singapore.
Launched “Chi Bi” in Malaysia and Singapore through Cubinet Interactive(s) Pte. Ltd.
On August 6, 2008, “Chi Bi” was launched in Malaysia and Singapore through Cubinet Interactive(s) Pte. Ltd. and was introduced in Chinese.
Launched “Perfect World II” in Indonesia through PT. LYTO Datarindo Fortuna of Indonesia
On August 11, 2008, “Perfect World II” was launched in Indonesia through PT. LYTO Datarindo Fortuna of Indonesia.
Appointed Mr. Han Zhang as an Independent Director to the Company’s Board of Directors
Mr. Han Zhang was appointed as an independent director to the Company’s Board of Directors in July 2008. After the changes of the board of directors, Perfect World has met the requirement of the Nasdaq Stock Market, Marketplace Rules that a majority of the directors shall be independent directors. Perfect World’s current board members are Mr. Michael Chi, founder, chairman and Chief Executive Officer, Mr. Ge Song, director, and three independent directors, Mr. Louis T. Hsieh, Dr. Bing Xiang and Mr. Han Zhang. The three independent directors are also members of the Company’s audit committee.
Business Outlook
Based on the Company’s current operations, total revenues for the third quarter of 2008 are expected to be between RMB368 million and RMB385 million. This represents an increase of 10% - 15% on a sequential basis and reflects the impact of domestic revenue growth, including new revenue from “Pocketpet Journey West,” and an increase in overseas licensing revenue, which will include revenue from several expected commercial launches of the Company’s games in various overseas markets.
The Company expects to launch open beta testing for “Pocketpet Journey West” at the end of third quarter or early fourth quarter of 2008. In terms of pipeline, the Company currently has five MMORPGs under development, including one that is expected to be launched by the end of 2008, and another that is expected to be launched at the end of 2008 or early 2009.
Conference Call
Perfect World will host a conference call and live webcast at 8:00 a.m. Eastern Daylight Time (EDT) (8:00 p.m., Beijing time) on Monday, August 18, 2008.
The dial-in details for the live conference call are as follows:
-- U.S. toll free number: +1-866-362-4829
-- International dial-in number: +1-617-597-5346
-- China toll free number: 10-800-130-0399
Passcode: 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 Daylight Time, August 25, 2008.
The dial-in details for the replay are as follows:
-- U.S. toll free number: +1-888-286-8010
-- International dial-in number: +1-617-801-6888
Passcode: 63027279
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, and changes of the regulatory environment in China. 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 August 18, 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, June 30, June 30,
2007 2008 2008
RMB RMB USD
Assets
Current assets
Cash and cash equivalents 1,496,032,993 1,131,400,752 164,948,864
Short-term investments -- 50,000,000 7,289,586
Accounts receivable 16,796,527 19,016,592 2,772,462
Prepayments and other
assets 22,112,949 40,938,393 5,968,479
Deferred tax assets 731,142 1,477,246 215,370
Total current assets 1,535,673,611 1,242,832,983 181,194,761
Non current assets
Equity investments -- 20,442,737 2,980,382
Property, equipment, and
software, net 107,331,206 168,533,256 24,570,754
Construction in progress -- 692,382,498 100,943,636
Intangible assets, net 1,723,048 1,214,489 177,062
Prepayments and other
assets 20,283,302 6,032,581 879,500
Deferred tax assets 730,180 652,685 95,156
Total assets 1,665,741,347 2,132,091,229 310,841,251
Liabilities and
Shareholders’ Equity
Current liabilities
Accounts payable 23,464,378 67,638,032 9,861,065
Advances from customers 49,672,384 56,884,847 8,293,340
Salary and welfare payable 30,901,115 25,121,261 3,662,472
Taxes payable 13,374,892 18,966,567 2,765,168
Accrued expenses and other
liabilities 14,175,638 25,549,193 3,724,861
Deferred revenues 123,310,935 188,445,878 27,473,849
Deferred government grants 1,100,000 1,450,000 211,398
Total current liabilities 255,999,342 384,055,778 55,992,153
Deferred revenues 19,365,787 17,663,835 2,575,241
Other long-term payable -- 28,000,000 4,082,168
Total liabilities 275,365,129 429,719,613 62,649,562
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;
77,810,480 Class A ordinary
shares and 207,242,555
Class B ordinary shares
issued and outstanding as
of June 30, 2008) 221,081 222,772 32,478
Additional paid-in capital 1,124,169,036 1,146,215,203 167,108,688
Statutory reserves 29,919,175 29,919,175 4,361,968
Accumulated other
comprehensive loss (31,771,062) (64,666,477) (9,427,837)
Retained earnings 267,837,988 590,680,943 86,116,392
Total Shareholders’ Equity 1,390,376,218 1,702,371,616 248,191,689
Total Liabilities and
Shareholders’ Equity 1,665,741,347 2,132,091,229 310,841,251
Perfect World Co., Ltd.
Unaudited Consolidated Statements of Operations
Three months ended
June 30, March 31, June 30, June 30,
2007 2008 2008 2008
RMB RMB RMB USD
Revenues
Online game
operation
revenues 111,527,683 264,480,379 299,397,364 43,649,657
Overseas licensing
revenues 18,179,553 38,680,078 35,015,395 5,104,955
Total Revenues 129,707,236 303,160,457 334,412,759 48,754,612
Cost of revenues (25,762,448) (37,541,866) (41,121,388) (5,995,158)
Gross profit 103,944,788 265,618,591 293,291,371 42,759,454
Operating expenses
Research and
development
expenses (10,899,521) (23,418,800) (31,513,638) (4,594,428)
Sales and
marketing
expenses (32,289,398) (60,666,589) (73,823,711) (10,762,886)
General and
administrative
expenses (6,291,902) (19,943,688) (21,996,244) (3,206,870)
Total operating
expenses (49,480,821)(104,029,077)(127,333,593) (18,564,184)
Operating profit 54,463,967 161,589,514 165,957,778 24,195,270
Other income/(expenses)
Investment loss -- -- (292,263) (42,610)
Interest income 764,249 11,647,866 8,082,012 1,178,290
Others, net 25,544 (9,236,970) (3,988,788) (581,532)
Total other income 789,793 2,410,896 3,800,961 554,148
Profit before tax 55,253,760 164,000,410 169,758,739 24,749,418
Income tax expense (2,892,291) (5,646,822) (5,269,372) (768,230)
Net Profit 52,361,469 158,353,588 164,489,367 23,981,188
Cumulative
unearned
dividends
of Series
A Preferred
Share (765,382) -- -- --
Net profit
attributable to
ordinary
shareholders 51,596,087 158,353,588 164,489,367 23,981,188
Net earnings per
share, basic 0.33 0.57 0.59 0.09
Net earnings per
share, diluted 0.21 0.53 0.55 0.08
Net earnings per ADS,
basic 1.67 2.83 2.93 0.43
Net earnings per ADS,
diluted 1.06 2.67 2.76 0.40
Shares used in
calculating basic net
earnings per share 154,285,720 279,610,748 281,166,704 281,166,704
Shares used in
calculating diluted
net earnings per share 246,869,700 296,103,511 297,747,140 297,747,140
Total share-based
compensation cost
included in:
Cost of revenues (30,956) (388,707) (674,389) (98,320)
Research and
development
expenses (366,928) (2,840,305) (5,167,248) (753,342)
Sales and
marketing
expenses (232,961) (729,651) (1,191,446) (173,703)
General and
administrative
expenses (563,479) (3,956,386) (4,822,002) (703,008)
Perfect World Co., Ltd.
Unaudited Consolidated Statements of Cash Flows
Three months ended
June 30, March 31, June 30, June 30,
2007 2008 2008 2008
RMB RMB RMB USD
Cash flows from
operating
activities:
Net profit 52,361,469 158,353,588 164,489,367 23,981,188
Adjustments for:
Share-based
compensation
cost 1,194,324 7,915,049 11,855,085 1,728,373
Depreciation and
amortization
expense 1,265,370 4,304,116 5,165,497 753,087
Exchange loss 372,415 10,345,689 1,743,894 254,245
Investment loss -- -- 292,263 42,610
Changes in assets
and liabilities:
Accounts
receivable (3,354,185) (1,268,558) (1,268,471) (184,933)
Current
prepayments and
other assets (15,605,811) (2,070,147) (14,541,991) (2,120,102)
Deferred tax
assets (146,831) (26,987) (662,787) (96,629)
Non-current
prepayments and
other assets 45,428 (1,589,347) 467,091 68,098
Accounts payable 7,022,588 13,281,828 (10,230,826) (1,491,570)
Advances from
customers 8,122,347 66,227,911 (59,015,448) (8,603,964)
Salary and
welfare
payable 6,241,361 (13,992,464) 8,203,906 1,196,062
Taxes payable 6,333,824 2,733,489 2,858,186 416,700
Accrued expenses
and other
liabilities 10,204,830 6,410,124 2,943,696 429,167
Deferred
Revenues 19,869,151 45,138,179 18,569,486 2,707,277
Deferred
government
grants 1,500,000 -- 350,000 51,027
Net cash provided
by operating
activities 95,426,280 295,762,470 131,218,948 19,130,636
Cash flows from
investing
activities:
Purchase of
property,
equipment and
software (17,947,851) (166,168,554) (511,927,172) (74,634,744)
Purchase of
short-term
investments -- -- (50,000,000) (7,289,586)
Cash paid
for equity
investments -- -- (20,735,000) (3,022,991)
Net cash used in
investing
activities (17,947,851) (166,168,554) (582,662,172) (84,947,321)
Cash flows from
financing
activities:
Exercise of
share options -- 790,616 1,388,550 202,439
Net cash provided
by financing
activities -- 790,616 1,388,550 202,439
Effect of exchange
rate changes
on cash and cash
equivalents (574,621) (38,362,024) (6,600,075) (962,236)
Net increase/
(decrease)
in cash 76,903,808 92,022,508 (456,654,749) (66,576,482)
Cash and cash
equivalents,
beginning of
the period 159,263,019 1,496,032,993 1,588,055,501 231,525,346
Cash and cash
equivalents, end
of the period 236,166,827 1,588,055,501 1,131,400,752 164,948,864
Supplemental
disclosures of
cash flow
information:
Cash paid during
the period for
income taxes (2,732,371) (5,508,722) (5,600,017) (816,436)
For further information, please contact
Perfect World Co., Ltd.
Vivien Wang
Investor Relations Officer
Tel: +86-10-5885-1813
Fax: +86-10-5885-6899
Email: ir@pwrd.com
http://www.pwrd.com
Christensen Investor Relations
Peter Homstad
Tel: +1-480-614-3026
Fax: +1-480-614-3033
Email: phomstad@christensenir.com
Jung Chang
Tel: +852-2117-0861
Fax: +852-2117-0869
Email: jchang@christensenir.com
