___________________
Form 6-K
___________________
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington D.C.
20549
REPORT
OF FOREIGN ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF
1934
For
the month of November, 2010
Commission File Number:
001-33759
GIANT
INTERACTIVE GROUP INC.
2/F
No. 29 Building, 396 Guilin Road
Shanghai
200233
People’s Republic of
China
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F.
Form
20-F þ Form
40-F o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): o
Indicate
by check mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of
1934. Yes o No
þ
If “Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):82- N/A
Giant Interactive Group
Inc.
Form
6-K
TABLE OF
CONTEN
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Description
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Page
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Signature
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3
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Exhibit
99.1 — Third
Quarter Fiscal 2010 Results Dated November 16, 2010
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4
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Exhibit
99.2 — 2010
Third Quarter Results Presentation Dated November 17, 2010
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15
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2
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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Giant
Interactive Group Inc.
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By:
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/s/
Eric He
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Name:
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Eric
He
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Title:
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Chief
Financial Officer
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Date:
November 17, 2010
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3
Exhibit
99.1
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FOR
IMMEDIATE RELEASE
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GIANT
INTERACTIVE ANNOUNCES
THIRD
QUARTER FISCAL 2010 RESULTS
SHANGHAI, PRC — November 16,
2010 — 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 third fiscal quarter ended September 30,
2010.
Third
Quarter 2010 Highlights:
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Ÿ
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Net
revenue was RMB338.7 million (US$50.6 million), an increase of 5.3% from
the second quarter 2010 and an increase of 16.7% from the third quarter
2009.
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Ÿ
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Gross
profit was RMB288.5 million (US$43.1 million), an increase of
5.0% from the second quarter 2010 and an increase of 17.9% from the third
quarter 2009. Gross profit margin for the third quarter 2010
was 85.2%.
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Ÿ
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Net
income attributable to the Company’s shareholders was
RMB208.7 million (US$31.2 million), an increase of 12.2%
from the second quarter 2010 and an increase of 5.6% from the third
quarter 2009. The margin of net income attributable to the Company’s
shareholders for the third quarter 2010
was 61.6%.
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Ÿ
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Basic
and diluted earnings per American Depositary Share (“ADS”) or one ordinary
share were RMB0.92 (US$0.14) and RMB0.89 (US$0.13),
respectively, compared to basic and diluted earnings per ADS of RMB0.82
and RMB0.79, respectively, for the second quarter 2010, and basic and
diluted earnings per ADS of RMB0.87 and RMB0.84, respectively, for the
third quarter 2009.
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Ÿ
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Non-GAAP
net income attributable to the Company’s shareholders excluding non-cash
share-based compensation was RMB220.9 million (US$33.0 million),
an increase of 14.4% from the second quarter 2010 and an increase of 7.5%
from the third quarter 2009. The margin of non-GAAP net income
attributable to the Company’s shareholders excluding non-cash share-based
compensation was 65.2%.
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Ÿ
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Basic
and diluted non-GAAP earnings excluding non-cash share-based compensation
per ADS were RMB0.97 (US$0.15) and RMB0.95 (US$0.14),
respectively, compared to basic and diluted non-GAAP earnings per ADS of
RMB0.85 and RMB0.82, respectively, for the second quarter 2010, and
basic and diluted non-GAAP earnings per ADS of RMB0.91 and RMB0.88,
respectively, for the third quarter
2009.
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Ÿ
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Active Paying Accounts (“APA”)
for online games was 1,497,000, an increase of 4.4% from the second
quarter 2010 and an increase of 35.1% from the third quarter
2009.
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Ÿ
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Average Revenue Per User (“ARPU”)
for online games was RMB225.0, an increase of 0.8% from the second quarter 2010
and a decrease of 13.4% from the third quarter
2009.
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Ÿ
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Average Concurrent Users (“ACU”)
for online games was 538,000, a decrease of 19.7% from the second quarter 2010
and an increase of 26.3% from the third quarter
2009.
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Ÿ
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Peak Concurrent Users (“PCU”) for
online games was 1,466,000, a decrease of 11.5% from the second quarter 2010
and an increase of 14.5% from the third quarter
2009.
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4
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FOR
IMMEDIATE RELEASE
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Mr. Yuzhu
Shi, Giant’s Chairman and Chief Executive Officer commented, “In the third
quarter 2010, we witnessed both top and bottom line growth on a sequential and
year-over-year basis. Our improving financial results were underpinned by
steady growth from our flagship ZT Online Series of games,
resulting in a year-over-year improvement across most of our key operating
metrics, and in particular, the expansion of our paying player
base.
“We
firmly recognize the need to invest in our future in order to offer the most
innovative and unique features and gaming experiences. As such, our R&D
efforts have focused on enhancing the content in our existing products, to keep
them fresh for our core user base. Furthermore, efforts to develop
and test our pipeline games, such as ZT Online 2 and our licensed games
Elsword and Allods Online, remain
underway and are an integral element of our diversification initiative. As
we work to optimize each of our new and existing games, we are also actively
pursuing international licensing agreements to further expand our player base
and diversify our revenue streams. I am pleased to report that we
currently have licensing agreements for some of our games in Taiwan, Japan,
Brazil and Turkey, and look to extend this list to include other regions around
the world in the near future.
“Our
progress in building a broader, more sustainable player base has translated into
strengthening financial performance. Our operations and finances
remain fundamentally sound, providing us with a solid platform to pursue our
growth initiatives. Looking ahead, we expect to again deliver steady
revenue growth supported by the continuing health of our ZT Online Series of games,
with additional growth opportunities in the coming year as some of our pipeline
games begin to gain traction.”
Third
Quarter Fiscal 2010 Unaudited Financial Results
Net
Revenue. Net revenue for the third quarter 2010 was RMB338.7
million (US$50.6 million), representing a 5.3% increase from RMB321.7 million in
the second quarter 2010 and a 16.7% increase from RMB290.2 million in the third
quarter 2009.
Revenue
from online games in the third quarter totaled RMB327.4 million (US$48.9
million), representing a 4.3% increase from RMB313.8 million in the second
quarter 2010 and a 13.8% increase from RMB287.5 million in the third quarter
2009. Online game net revenue increased sequentially primarily due to
the growth of the ZT Online
Series of games.
ACU for
online games in the third quarter 2010 was 538,000, representing a 19.7%
sequential decrease compared to the second quarter of 2010 and a 26.3% increase
over the third quarter 2009. PCU for online games in the third
quarter 2010 was 1,466,000, representing an 11.5% sequential decrease and a
14.5% increase over the third quarter 2009. ACU and PCU were down on
a sequential basis due to our cleanup of gold farming and robot accounts in the
ZT Online Series of
games. ARPU for online games in the third quarter 2010 increased 0.8%
sequentially and decreased 13.4% year-over-year quarterly to
RMB225.0. ARPU remained steady on a sequential basis, but remained at
lower than historic levels as Giant’s newer games target various audiences with
a broader range of spending habits. APA for online games in the third
quarter 2010 increased 4.4% sequentially and increased 35.1% from the third
quarter 2009 to 1,497,000. The sequential and year-over-year
increases in APA are attributable to the increase in paying accounts within the
Company’s ZT Online
Series of games.
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FOR
IMMEDIATE RELEASE
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Cost of
Services. Cost of services was RMB50.2 million (US$7.5
million), representing an increase of 7.1% from the second quarter 2010 and a
10.5% increase from the third quarter 2009. The sequential increase
of cost of services was mainly due to a RMB1.5 million increase of sales tax as
a result of higher revenue in the third quarter 2010.
Gross Profit and
Gross Margin. Gross profit for the third quarter 2010 was
RMB288.5 million (US$43.1 million), representing a 5.0% sequential increase and
a 17.9% year-over-year quarterly increase. Gross margin for the third
quarter 2010 was 85.2%, essentially flat compared to 85.4% in the second quarter
2010 and slightly up from 84.3% in the third quarter 2009.
Operating
Expenses. Total operating expenses for the third quarter 2010 were
RMB94.3 million (US$14.1 million), representing a slight increase of 0.1% from
RMB94.2 million in the second quarter 2010 and an increase of 77.5% from RMB53.1
million in the third quarter 2009. The year-over-year increase in
operating expenses is mainly attributable to higher R&D
expenditure.
Research
and product development (“R&D”) expenses for the third quarter 2010
increased 58.8% sequentially to RMB52.6 million (US$7.9 million) from RMB33.1
million in the second quarter 2010 and increased 114.3% year-over-year quarterly
from RMB24.5 million in the third quarter 2009. The sequential and
year-over-year increase in R&D expenses was mainly due to increased
compensation for R&D personnel as well as an increase in R&D headcount
to support the development of new game projects.
Sales and
marketing (“S&M”) expenses were RMB37.4 million (US$5.6 million) in the
third quarter 2010, a sequential decrease of 17.5% from RMB45.4 million in the
second quarter 2010, as the Company launched fewer new games and marketing
campaigns during the third quarter 2010. S&M expenses were up
23.2% year-over-year from RMB30.4 million as the company had limited its market
activities last year.
General
and administrative expenses (“G&A”) for the third quarter 2010 were RMB33.7
million (US$5.0 million), up 30.8% from RMB25.7 million in the second quarter
2010, and up 25.0% from RMB26.9 million in the third quarter
2009. The sequential and year-over-year increases were mainly caused
by incremental compensation expenses recorded for the repricing of certain
incentive based share options and the Company’s granting of restricted shares
during the second quarter 2010.
Financial
Incentive. The financial incentive, which mainly relates to
sales tax received from the municipal government, was RMB29.4 million (US$4.4
million) in the third quarter 2010, a sequential increase of 193.9% and a
year-over-year increase of 2.3%. These proceeds mainly relate to the sales tax
accounted for in the Company’s cost of services and is treated as a deduction in
operating expenses.
Interest
Income. Interest income for the third quarter 2010 was RMB37.1
million (US$5.5 million), compared to RMB30.5 million in the second quarter 2010
and RMB23.1 million in the third quarter 2009.
6
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FOR
IMMEDIATE RELEASE
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Income
Tax. Income tax expense for the third quarter 2010 was RMB21.8
million (US$3.3 million), compared to income tax expense of RMB20.0 million in
the second quarter 2010 and income tax expense of RMB18.1 million in the
third quarter 2009.
Net Income
Attributable to the Company’s Shareholders. Net income
attributable to the Company’s shareholders for the third quarter 2010 was
RMB208.7 million (US$31.2 million), an increase of 12.2% from RMB186.0 million
in the second quarter 2010 and a year-over-year quarterly increase of 5.6% from
RMB197.7 million. Net income attributable to the Company’s shareholders
increased sequentially as a result of the increase in online game revenue and
the increase of interest income during the third quarter 2010. The margin of net
income attributable to the Company’s shareholders was 61.6% for the third
quarter 2010, compared to 57.8% in the second quarter 2010 and 68.1% in the
third quarter 2009.
Cash,
Cash Equivalents, Short-Term Investments and Held-To-Maturity
Investments. As
of September 30, 2010, Giant’s cash, cash equivalents, short-term investments
and held-to-maturity securities totaled RMB5,753.3 million (US$859.9 million),
compared to RMB5,496.9 million as of June 30, 2010. The sequential
increase consists of cash generated by the Company’s operating
business.
Share Repurchase Program. In
August 2009, Giant implemented a share repurchase plan, authorizing the Company
to repurchase up to US$150.0 million of its ADSs. In August, 2010,
the Board of Directors decided to extend the term of the plan, which
would have expired on August 30, 2010, for one additional year, unless further
extended or shortened by the Board of Directors, as under the board resolution
and as defined by SEC regulations. To date, the Company did not
repurchase any shares under the plan
Business
Highlights and Outlook
ZT Online Series
— During the
third quarter 2010, Giant made significant enhancements to daily tasks and
introduced engaging group PK and tag-team PK battles, casual card gameplay and
new equipment called ‘Thunder Wings’ to the original ZT Online. In
September 2010, the Company released a new expansion pack to ZT Online Classic Edition,
which features a new group tournament and more functions within the battle
system. The first expansion pack for ZT Online Green Edition,
featuring animals for transportation and battle, has been rolling out at a
steady pace. In addition, Giant continued to add new gameplay such as
the ‘Brotherhood Union’, ‘Homeland Transfer’ and ‘Random Acquisition of Skills’
to keep current gamers engaged and to attract new players.
Giant Online
— During the third quarter 2010, Giant released a new expansion pack
featuring battles in space for Giant Online and focused
efforts on developing in-game activities. To fulfill players'
continuous pursuit of new game content, the Company unlocked a new military rank
called 'Major General' in the fourth quarter 2010. The Taiwanese
version of Giant Online
entered into official open beta testing at the end of September
2010.
King of Kings III
— The Company
launched the first expansion pack for King of Kings III, which
includes a dragon theme, during the third quarter 2010. A second
expansion pack, which will feature improved game mechanics and twenty-seven
advanced professions derived from the three original basic roles, will be
introduced towards the end of 2010.
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FOR
IMMEDIATE RELEASE
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ZT Online 2
— As the
Company’s revolutionary flagship product, ZT Online 2 not only
introduces new gameplay to the ZT Online Series, but also
adopts innovative artwork methods such as particle effects, photo backdrop and
overlap to increase the overall graphical quality of the game. In
terms of game content, Giant combined casual game elements such as a farm game
system and a magical pet raising system with hardcore PK elements to satisfy
various gamer needs. In addition, a revised in-game economy will be
introduced for ZT Online
2. In October 2010, the game underwent a server-pressure test
with limited persistent accounts. The purpose of the test was to
check the capability of servers and collect feedback from the
market. ZT Online
2 is expected to begin unlimited closed beta testing during the fourth
quarter 2010.
XT Online
— A revised
version of XT Online
was launched in August 2010 and has been well received by
gamers. Towards the end of the third quarter, the Company introduced
new instance dungeons, skills and other updates based upon gamers’
feedback. Giant’s R&D team plans to roll out new content on a
monthly basis to keep the game fresh. The Company plans to launch the open beta
test for XT Online in
2011.
Dragon Soul
— In August
2010, the Company carried out closed beta testing and many intriguing on-line
and off-line promotional activities for Dragon Soul to attract gamers
to participate. Throughout the third quarter 2010, Giant continued to add and
optimize game content and features, which include additional enhancements to the
Master-and-Apprentice system and animal pets for transportation and
battle. The first expansion pack, slated to launch towards the end of
the fourth quarter 2010, will feature a fortune-telling system, new professions
such as the Musician and additional monetization features.
The Golden Land
— During the
third quarter 2010, Giant continued to update The Golden Land, introducing
the state battlefield as a new gameplay option and adding more attributes to the
hero characters. In Taiwan, The Golden Land remained one
of the most popular webgames during the third quarter. In August
2010, The Golden Land
entered into a 3-day beta test without persistent user accounts in Japan and
received positive feedback from gamers, helping Giant further optimize the game
prior to the open beta test in Japan in October 2010. In addition,
the Company has signed license agreements to export the game to Brazil and
Turkey, and expects to conduct an internal test for the Brazil market in
November 2010.
Elsword —
Elsword is a 3D
side-scrolling, advanced casual game developed by KOG of South Korea Co., Ltd.
(“KOG”). Elsword has generated the best performance in terms of user
numbers among all the licensed games operated by Nexon Corporation, one of the
top online game companies in Korea. Elsword has also been ranked
the number one game year-round within the casual online games sector in Taiwan.
Giant plans to conduct limited engineering testing towards the end of November
2010 and will proceed to commercially launch the game in mainland China in
2011.
Allods Online
— Allods Online
is a 3D free-to-play MMORPG developed by Astrum Nival, LLC (“Astrum Nival”), a
studio owned by Mail.Ru Inc. (“Mail.Ru”). The Company is currently
localizing and tailoring the game to Chinese gamers’ preferences, and expects to
complete an initial Chinese version in the fourth quarter 2010 and launch
engineering testing during the first half of 2011.
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FOR
IMMEDIATE RELEASE
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Fourth Quarter
2010 Guidance —
For the fourth quarter 2010, the Company expects the ZT Online Series of games and other
games in our product portfolio to carry on the positive momentum experienced
thus far in 2010. As a result, the Company expects continued top-line
growth in the fourth quarter 2010.
Conference
Call
Giant’s
senior management will host a conference call on November 16, 2010 at 8:00 pm
(US Eastern Time) / 5:00 pm (US Pacific Time), which is November 17, 2010
at 9:00 am (Beijing Time) to discuss its 2010 third quarter financial
results and recent business activity. The conference call may be accessed by
calling +1 800 299 7098 (for callers in the US), +86 10 800 130
0399 (for Telecom callers in Southern China), +86 10 800 852 1490 (for
Netcom callers in Southern China), +86 10 800 152 1490 (for Telecom callers in
Northern China) or +1 617 801 9715 (for callers outside of the US and
China) and entering passcode 94977411. Please dial in approximately
10 minutes before the scheduled time of the call.
A
recording of the conference call will be available starting 11:00 pm (US
Eastern Time) on November 16, 2010, by calling +1 888 286 8010 (for callers in
the US) or +1 617 801 6888 (for callers outside the US) and entering passcode
87419498.
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.ga-me.com/earningsannouncements.php.
Currency
Convenience Translation
This
release contains translations of certain Renminbi (RMB) amounts into US dollars
(US$) at the rate of US$1.00 to RMB6.6905, which was the noon buying rate as of
September 30, 2010 in the City of New York for cable transfers in Renminbi per
US dollar as certified for customs purposes by the Federal Reserve Bank of New
York. The Company makes no representation that the Renminbi or US
dollar amounts referred to in this release could have been, or could be,
converted into US dollars at such rate or at all.
Use
of Non-GAAP Financial Measures
Giant has
reported net income attributable to the Company’s shareholders for the period
indicated below on a non-GAAP basis excluding non-cash share-based
compensation. Giant believes that both management and investors
benefit from referring to these non-GAAP financial measures in assessing the
performance of Giant and when planning and forecasting future
periods. Giant computes its non-GAAP financial measures using the
same consistent method from quarter to quarter.
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FOR
IMMEDIATE RELEASE
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Readers
are cautioned not to view non-GAAP results on a stand-alone basis or as a
substitute for results under GAAP, or as being comparable to results reported or
forecasted by other companies, and should refer to the reconciliation of GAAP
results with non-GAAP results in the attached financial
information.
The table
below sets forth the reconciliation of GAAP measures to non-GAAP measures for
the indicated periods:
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Three
months ended
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September
30,
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June
30,
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September
30,
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September
30,
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2009
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2010
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2010
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2010
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(RMB)
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(RMB)
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(RMB)
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(US$)
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GAAP
net income attributable to the Company’s shareholders:
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197,735,865 | 186,022,043 | 208,654,381 | 31,186,665 | ||||||||||||
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Share-based
compensation
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7,640,287 | 7,054,023 | 12,283,800 | 1,836,006 | ||||||||||||
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Non-GAAP
net income attributable to the Company’s shareholders:
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205,376,152 | 193,076,066 | 220,938,181 | 33,022,671 | ||||||||||||
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Non-GAAP
earnings per share:
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Basic
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0.91 | 0.85 | 0.97 | 0.15 | ||||||||||||
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Diluted
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0.88 | 0.82 | 0.95 | 0.14 | ||||||||||||
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Weighted
average ordinary shares:
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Basic
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226,453,309 | 227,233,796 | 227,392,454 | 227,392,454 | ||||||||||||
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Diluted
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234,274,321 | 234,089,527 | 233,497,787 | 233,497,787 | ||||||||||||
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) is a leading online game developer
and operator in China in terms of market share according to iResearch Consulting
Group, an independent Chinese research center, and focuses on massively
multiplayer online role playing games. Currently, Giant operates
multiple games, including ZT
Online, ZT Online Green
Edition, Giant Online, King of Kings III, The Golden Land, XT Online, Dragon Soul, and My Sweetie. Giant
has several additional online games that it intends to launch, including ZT Online 2, Allods Online,
and Elsword. 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, 2010 consisted of
over 130 distributors, and reached over 96,000 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 www.ga-me.com.
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FOR
IMMEDIATE RELEASE
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Safe
Harbor Statement
Statements
in this release contain “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 business outlook for the fourth quarter of 2010, the ability
of ZT Online series to
attract players and extend its life cycle with the enhancements introduced in
the third quarter 2010, our expectations on the performances of our newly
launched games, our ability to successfully commercially launch our new games,
our continued efforts to successfully operate and adjust features of our
existing games, including introduction of expansion packs, and our ability to
continue to grow our business and build long-term shareholder
value. 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 anticipate may include failure by ZT Online gamers to resume
in-game spending or continue in-game spending at historical levels, our ability
to develop, purchase or license additional online games that are attractive to
our players, our ability to develop and successfully launch expansion packs for
our online games, our ability to adjust and enhance our online games to users’
preferences to generate revenues, our dependence on one online game, which
currently accounts for the majority of our historical net revenues, our ability
to respond to competition, our ability to adjust to the current global economic
crisis, 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, our uncertainties with respect to
the PRC legal and regulatory environments and volatility in the markets we
operate in. The financial information contained in this release should be
read in conjunction with the consolidated financial statements and notes thereto
included in our annual report on Form 20F for the fiscal year 2009, as filed
with the Securities and Exchange Commission on June 7, 2010, and are available
on the Securities and Exchange Commission’s website at 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 8 of our annual report for fiscal year
2009. Our actual results of operations for the third quarter 2010 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 undertake 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.
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IMMEDIATE RELEASE
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Contacts:
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Investor
Contact (Shanghai):
Rich
Chiang, IR Manager
Giant
Interactive Group, Inc.
+86
21 6451 1258
ir@ztgame.com
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Investor
Relations (US):
Mahmoud
Siddig, Director
Taylor
Rafferty
+1
(212) 889 4350
giantinteractive@taylor-rafferty.com
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Investor
Relations (HK):
Ruby
Yim, Managing Director
Taylor
Rafferty
+852
3196 3712
giantinteractive@taylor-rafferty.com
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Media
Contact (US):
Jason
Marshall
Taylor
Rafferty
+1
(212) 889 4350
giantinteractive@taylor-rafferty.com
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IMMEDIATE RELEASE
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GIANT
INTERACTIVE GROUP, INC.
CONSOLIDATED
BALANCE SHEETS
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Unaudited
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Unaudited
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Unaudited
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Unaudited
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|||||||||||||
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September
30,
|
June
30,
|
September
30,
|
September
30,
|
|||||||||||||
|
2009
|
2010
|
2010
|
2010
|
|||||||||||||
|
ASSETS
|
(RMB)
|
(RMB)
|
(RMB)
|
(US$)
|
||||||||||||
|
Current
assets:
|
||||||||||||||||
|
Cash
and cash equivalents
|
854,016,847 | 2,673,694,945 | 605,049,628 | 90,434,142 | ||||||||||||
|
Prepayments
and other current assets
|
83,920,471 | 103,485,163 | 111,616,927 | 16,682,898 | ||||||||||||
|
Accounts
receivable
|
1,143,934 | 16,275,111 | 19,328,988 | 2,889,020 | ||||||||||||
|
Due
from a related party
|
- | 3,572 | - | - | ||||||||||||
|
Inventories
|
736,170 | 353,439 | 276,940 | 41,393 | ||||||||||||
|
Deferred
tax assets
|
69,577,691 | 76,447,887 | 87,715,173 | 13,110,406 | ||||||||||||
|
Short-term
investments
|
3,825,410,000 | 2,323,180,000 | 5,148,286,000 | 769,491,966 | ||||||||||||
|
Total
current assets
|
4,834,805,113 | 5,193,440,117 | 5,972,273,656 | 892,649,825 | ||||||||||||
|
Non-current
assets:
|
||||||||||||||||
|
Property
and equipment, net
|
187,574,442 | 149,935,585 | 151,985,957 | 22,716,681 | ||||||||||||
|
Intangible
assets, net
|
114,888,675 | 116,565,240 | 112,849,847 | 16,867,177 | ||||||||||||
|
Due
from R&D entity partners
|
- | 13,185,600 | 11,245,600 | 1,680,831 | ||||||||||||
|
Goodwill
|
6,224,587 | 6,224,587 | 6,224,587 | 930,362 | ||||||||||||
|
Investment
in an equity investee
|
- | 2,787,260 | 2,597,350 | 388,215 | ||||||||||||
|
Available-for-sale
securities
|
475,021,469 | 427,248,585 | 431,544,605 | 64,501,099 | ||||||||||||
|
Held-to-maturity
securities
|
500,000,000 | 500,000,000 | - | - | ||||||||||||
|
Deferred
tax assets
|
9,257,497 | 11,686,618 | 12,305,523 | 1,839,253 | ||||||||||||
|
Other
assets
|
85,239,597 | 102,711,524 | 102,276,802 | 15,286,870 | ||||||||||||
|
Total
non-current assets
|
1,378,206,267 | 1,330,344,999 | 831,030,271 | 124,210,488 | ||||||||||||
|
Total
assets
|
6,213,011,380 | 6,523,785,116 | 6,803,303,927 | 1,016,860,313 | ||||||||||||
|
LIABILITIES
AND SHAREHOLDERS’EQUITY
|
||||||||||||||||
|
Current
liabilities:
|
||||||||||||||||
|
Payables
and accrued expenses
|
93,434,907 | 103,541,179 | 108,370,100 | 16,197,608 | ||||||||||||
|
Advances
from distributors
|
77,997,941 | 53,588,141 | 88,112,867 | 13,169,848 | ||||||||||||
|
Deferred
revenue
|
314,761,757 | 352,121,774 | 385,348,531 | 57,596,373 | ||||||||||||
|
Unrecognized
tax benefit
|
8,821,098 | 11,838,570 | 12,028,576 | 1,797,859 | ||||||||||||
|
Tax
payable
|
1,011,813 | 9,795,947 | 20,372,954 | 3,045,057 | ||||||||||||
|
Deferred
tax liabilities
|
119,016 | 1,401,752 | 471,169 | 70,424 | ||||||||||||
|
Total
current liabilities
|
496,146,532 | 532,287,363 | 614,704,197 | 91,877,169 | ||||||||||||
|
Non-current
liabilities:
|
||||||||||||||||
|
Deferred
tax liabilities
|
- | 303,722 | 245,109 | 36,635 | ||||||||||||
|
Total
non-current liabilities
|
- | 303,722 | 245,109 | 36,635 | ||||||||||||
|
Total
liabilities
|
496,146,532 | 532,591,085 | 614,949,306 | 91,913,804 | ||||||||||||
|
Shareholders’
equity
|
||||||||||||||||
|
Ordinary
shares
|
417 | 417 | 417 | 62 | ||||||||||||
|
(par
value US$0.0000002 per share;
|
||||||||||||||||
|
500,000,000
shares authorized as at September30, 2009, June 30, 2010 and September
30, 2010 respectively; 263,110,626 shares issued and
226,441,541 shares outstanding at September 30,
2009, 263,110,626 shares issued
and 227,348,625 shares outstanding at June 30,
2010, 263,110,626 shares issued
and 227,455,322 shares outstanding at September 30,
2010)
|
||||||||||||||||
|
Additional
paid-in capital
|
6,024,441,066 | 6,054,941,806 | 6,069,015,652 | 907,109,432 | ||||||||||||
|
Statutory
reserves
|
43,890,273 | 43,890,273 | 43,890,273 | 6,560,089 | ||||||||||||
|
Accumulated
other comprehensive loss
|
(188,444,945 | ) | (247,350,587 | ) | (269,131,517 | ) | (40,225,920 | ) | ||||||||
|
Retained
earnings
|
2,008,880,649 | 2,298,814,714 | 2,507,469,095 | 374,780,524 | ||||||||||||
|
Treasury
stock
|
(2,176,792,033 | ) | (2,176,792,033 | ) | (2,176,792,033 | ) | (325,355,658 | ) | ||||||||
|
Total
shareholders’ equity
|
5,711,975,427 | 5,973,504,590 | 6,174,451,887 | 922,868,529 | ||||||||||||
|
Non
controlling interests
|
4,889,421 | 17,689,441 | 13,902,734 | 2,077,980 | ||||||||||||
|
Total equity
|
5,716,864,848 | 5,991,194,031 | 6,188,354,621 | 924,946,509 | ||||||||||||
|
Total
liabilities and equity
|
6,213,011,380 | 6,523,785,116 | 6,803,303,927 | 1,016,860,313 | ||||||||||||
13
|
FOR
IMMEDIATE RELEASE
|
|
GIANT
INTERACTIVE GROUP, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
Three
months ended
|
||||||||||||||||
|
30-Sep
|
30-June
|
30-Sep
|
30-Sep
|
|||||||||||||
|
2009
|
2010
|
2010
|
2010
|
|||||||||||||
|
(RMB)
|
(RMB)
|
(RMB)
|
(US$)
|
|||||||||||||
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
|
Net
revenue:
|
||||||||||||||||
|
Online
game
|
287,546,644 | 313,794,352 | 327,368,323 | 48,930,323 | ||||||||||||
|
Licensing
revenue
|
2,640,216 | 7,551,922 | 11,216,816 | 1,676,529 | ||||||||||||
|
Other
revenue, net
|
14,031 | 306,533 | 82,844 | 12,382 | ||||||||||||
|
Total
net revenue
|
290,200,891 | 321,652,807 | 338,667,983 | 50,619,234 | ||||||||||||
|
Cost
of services
|
(45,436,528 | ) | (46,886,113 | ) | (50,195,467 | ) | (7,502,499 | ) | ||||||||
|
Gross
profit
|
244,764,363 | 274,766,694 | 288,472,516 | 43,116,735 | ||||||||||||
|
Operating (expenses)
income:
|
||||||||||||||||
|
Research
and product development expenses
|
(24,538,213 | ) | (33,125,895 | ) | (52,596,816 | ) | (7,861,418 | ) | ||||||||
|
Sales
and marketing expenses
|
(30,394,878 | ) | (45,393,654 | ) | (37,438,525 | ) | (5,595,774 | ) | ||||||||
|
General
and administrative expenses
|
(26,915,756 | ) | (25,729,485 | ) | (33,652,902 | ) | (5,029,953 | ) | ||||||||
|
Government
financial incentives
|
28,730,000 | 10,000,000 | 29,386,000 | 4,392,198 | ||||||||||||
|
Total
operating expenses
|
(53,118,847 | ) | (94,249,034 | ) | (94,302,243 | ) | (14,094,947 | ) | ||||||||
|
Income
from operations
|
191,645,516 | 180,517,660 | 194,170,273 | 29,021,788 | ||||||||||||
|
Interest
income
|
23,102,435 | 30,454,426 | 37,127,065 | 5,549,221 | ||||||||||||
|
Other income
(expense), net
|
748,786 | (6,227,159 | ) | (2,451,391 | ) | (366,399 | ) | |||||||||
|
Income
before income tax expenses, and share of loss of an equity
investee
|
215,496,737 | 204,744,927 | 228,845,947 | 34,204,610 | ||||||||||||
|
Income
tax expense
|
(18,051,287 | ) | (20,041,347 | ) | (21,781,031 | ) | (3,255,516 | ) | ||||||||
|
Share
of loss of an equity investee
|
- | (128,496 | ) | (189,911 | ) | (28,385 | ) | |||||||||
|
Net
income
|
197,445,450 | 184,575,084 | 206,875,005 | 30,920,709 | ||||||||||||
|
Net
loss attributable to non controlling interest
|
290,415 | 1,446,959 | 1,779,376 | 265,956 | ||||||||||||
|
Net
income attributable to the Company’s shareholders
|
197,735,865 | 186,022,043 | 208,654,381 | 31,186,665 | ||||||||||||
|
Other
comprehensive loss, net of tax
|
||||||||||||||||
|
Foreign
currency translation
|
(1,116,473 | ) | (12,480,121 | ) | (31,809,524 | ) | (4,754,432 | ) | ||||||||
|
Unrealized
holding (loss)gain
|
(3,107,122 | ) | (12,238,203 | ) | 10,028,594 | 1,498,930 | ||||||||||
|
Reclassification
adjustment
|
(1,813,513 | ) | - | - | - | |||||||||||
|
Total
other comprehensive loss, net of tax
|
(6,037,108 | ) | (24,718,324 | ) | (21,780,930 | ) | (3,255,502 | ) | ||||||||
|
Comprehensive
income
|
191,698,757 | 161,303,719 | 186,873,451 | 27,931,163 | ||||||||||||
|
Earnings
per share:
|
||||||||||||||||
|
Basic
|
0.87 | 0.82 | 0.92 | 0.14 | ||||||||||||
|
Diluted
|
0.84 | 0.79 | 0.89 | 0.13 | ||||||||||||
|
Weighted
average ordinary shares:
|
||||||||||||||||
|
Basic
|
226,453,309 | 227,233,796 | 227,392,454 | 227,392,454 | ||||||||||||
|
Diluted
|
234,274,321 | 234,089,527 | 233,497,787 | 233,497,787 | ||||||||||||
14
Exhibit
99.2
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32