SHANGHAI, March 26, 2015 /PRNewswire-FirstCall/ --The9
Limited (NASDAQ: NCTY) ("The9"), an online game developer and
operator, announced its unaudited financial results for the six
months ended December 31, 2014
today.
Financial Highlights:
- Net revenues in the second half of 2014 amounted to
RMB36.9 million (US$5.9 million), representing an increase of
34.4% from RMB27.4 million
(US$4.4 million) in the first half of
2014 and a decrease of 37.2% from RMB58.7
million (US$9.5 million) in
the second half of 2013.
- In the second half of 2014, net profit attributable to holders
of ordinary shares was RMB34.2
million (US$5.5 million). In
the first half of 2014 and the second half of 2013, net loss
attributable to holders of ordinary shares was RMB141.9 million (US$22.9
million) and RMB244.4 million
(US$39.4 million), respectively.
Management Comments:
Jun Zhu, Chairman and Chief
Executive Officer of The9, said, "Red 5 launched Firefall in
July 2014 in North
America and Europe. We have
high expectations for Firefall in the China
market. In August 2014,
Shanghai Oriental Pearl Culture Development Co. Ltd., a
wholly-owned subsidiary of Shanghai Oriental Pearl (Group) Co.,
Ltd. (SH: 600832), closed its
investment in Red 5 and became a minority shareholder of Red 5.
Also in August 2014, Qihoo 360
Technology Co., Ltd. (NASDAQ: QIHU) and us established a 50-50 joint venture System
Link Corporation Limited to publish and operate Firefall in
China for a five-year term. Under
this license agreement, System Link is expected to pay to us no
less than an aggregate of US$160
million including license fee and royalties during the term
of the agreement. All these show the great potential of Firefall in
China. We are dedicating our best
resources to prepare for the launch of Firefall in China and we target to launch Firefall in
China in the second half of 2015.
In addition, we are also planning to launch several mobile games in
2015. In August 2014, we sold Huopu
Cloud, a subsidiary which developed and held a proprietary web
game, for a total consideration of RMB200
million. This sale has proven our in-house game development
capability has been recognized by the market."
Discussion of The9's Unaudited 2014 Second
Half Results
Net Revenues
Our net revenues in the second half of 2014 amounted to
RMB36.9 million (US$5.9 million), representing an increase of
34.4% from RMB27.4 million
(US$4.4 million) in the first half of
2014 and a decrease of 37.2% from RMB58.7
million (US$9.5 million) in
the second half of 2013. The increase over the first half of 2014
was mainly due to increase of revenue from Firefall in North America and Europe, and partly offset by decrease of
revenue from various MMO, web and social games in China. The decrease from the second half of
2013 was mainly due to the decrease of revenue from Planetside
2.
Gross Loss
Our gross loss in the second half of 2014 amounted to
RMB7.2 million (US$1.2 million), compared with RMB14.3 million (US$2.3
million) and RMB5.2 million
(US$0.8 million) in the first half of
2014 and in the second half of 2013, respectively. The gross loss
in the second half of 2014 reflected lower level of revenue
generated coupled with the continued incurrence of a relatively
fixed portion of our costs, such as overhead, depreciation and
rental charges.
Operating Expenses
In the second half of 2014, our operating expenses, excluding
gain from disposal of subsidiaries, were RMB151.8 million (US$24.5
million), which decrease by 0.8% from RMB153.0 million (US$24.7
million) in the first half of 2014 and decrease by 39.9%
from RMB252.6 million (US$40.7 million) in the second half of 2013. The
decrease compared to the first half of 2014 was primarily due to
the net effect of the increase in marketing expenses in the second
half relating to the launch of Firefall in the North America and Europe, and reversal of an allowance provided
on a long-term receivable from a supplier recognized in the second
half of 2013. The decrease compared to the second half of 2013 was
primarily due to the cost cutting on product development, marketing
expenses and general and administrative expenses, and the reversal
of an allowance provided on a long-term receivable from a supplier
recognized in the second half of 2013. In addition, in the first
half of 2014, we also recorded a gain on disposal of
subsidiaries of RMB165.4 million
(US$26.7 million) in the second half
of 2014 in connection with the disposal of Huopu Cloud Computing
Terminal Technology Co., Ltd., a wholly-owned subsidiary, as well
as certain other subsidiary, which was recorded as a deduction to
operating expense.
Interest Income
Interest income in the second half of 2014 was RMB1.9 million (US$0.3
million), compared to RMB1.5
million (US$0.2 million) in
the first half of 2014 and RMB2.6
million (US$0.4 million) in
the second half of 2013. The fluctuation of interest income was
typically in line with our cash balances.
Other Income (Expenses), Net
Other expenses in the second half of 2014 was RMB5.4 million (US$0.9
million), compared to other income of RMB3.3 million (US$0.5
million) in the first half of 2014 and other income of
RMB7.0 million (US$1.1 million) in the second half of 2013. Other
expenses in the second half of 2014 mainly represented foreign
exchange losses. Other income in the first half of 2014 mainly
represented foreign exchange gains. Other income in the second half
of 2013 mainly represented a refund of game license fee.
Net Profit (Loss) attributable to holders of ordinary
shares
In the second half of 2014, net profit attributable to holders
of ordinary shares was RMB34.2
million (US$5.5 million). In
the first half of 2014 and the second half of 2013, net loss
attributable to holders of ordinary shares was RMB141.9 million (US$22.9
million) and RMB244.4 million
(US$39.4 million), respectively.
Basic net profit per shareand per ADS in the second half of 2014
was RMB1.48 (US$0.25), compared to basic net loss per share
of RMB6.13 (US$0.99) in the first half of 2014 and basic net
loss per share of RMB10.64
(US$1.71) in the second half of
2013.
Currency Convenience Translation
The translation of Renminbi (RMB) into US dollars (US$) in this
press release are presented solely for the convenience of the
readers at the noon buying rate in the City of New York for cable transfers in
Renminbi per U.S. dollar as certified for customs purposes by the
H.10 weekly statistical release of the Federal Reserve Board as of
December 31, 2014, which was
RMB 6.2046 to US$1.00. Such
translations should not be construed as representations that the
RMB amounts represents, or have been or could be converted into,
US$ at that or any other rate. The percentages stated in this press
release are calculated based on the RMB amounts.
About The9 Limited
The9 Limited is an online game developer and operator in
China. The9 develops and operates,
directly or through its affiliates, its proprietary MMO, web and
mobile games including Firefall, TianTianWanDiaoChan and
Dao Feng. In 2010, The9 established
its wireless business unit to focus on mobile internet business. In
2013, The9 formed a joint venture with Shanghai ZTE to develop and
operate home entertainment set top box business.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
the business outlook and quotations from management in this press
release contain forward-looking statements. The9 may also make
written or oral forward-looking statements in its periodic reports
to the U.S. Securities and Exchange Commission on Forms 20-F and
6-K, etc., in its annual report to shareholders, in press releases
and other written materials and in oral statements made by its
officers, directors or employees to third parties. Statements that
are not historical facts, including statements about The9's beliefs
and expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
important factors could cause actual results to differ materially
from those contained in any forward-looking statement. Potential
risks and uncertainties include, but are not limited to, political
and economic policies of the Chinese government, the laws and
regulations governing the online game industry, information
disseminated over the Internet and Internet content providers in
China, intensified government
regulation of Internet cafes, The9's ability to retain existing
players and attract new players, license, develop or acquire
additional online games that are appealing to users, anticipate and
adapt to changing consumer preferences and respond to competitive
market conditions, and other risks and uncertainties outlined in
The9's filings with the U.S. Securities and Exchange Commission,
including its annual reports on Form 20-F. The9 does not undertake
any obligation to update any forward-looking statement, except as
required under applicable law.
For further information, please contact:
Ms. Phyllis Sai
Manager, Investor Relations
The9 Limited
Tel: +86 (21) 5172-9990
Email: IR@corp.the9.com
Website: http://www.corp.the9.com/
-- Tables follow --
THE9
LIMITED
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UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME INFORMATION
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(Expressed
in Renminbi - RMB and US Dollars - US$, except share
data)
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Six month
ended Jun 30
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Six month
ended December 31
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2014
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2013
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2014
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2014
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RMB
(unaudited)
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RMB
(unaudited)
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RMB
(unaudited)
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US$
(Note)
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Revenues:
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Online
game services
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22,199,785
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52,415,966
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33,217,915
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|
5,353,756
|
Other
revenues
|
|
5,547,325
|
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7,069,176
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3,874,540
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624,462
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27,747,110
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59,485,142
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37,092,455
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5,978,218
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|
|
|
|
|
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Sales
Taxes
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|
(326,865)
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|
(774,716)
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(235,809)
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(38,005)
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|
|
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|
Net
Revenues
|
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27,420,245
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58,710,426
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36,856,646
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5,940,213
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|
Cost of
revenue
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(41,706,220)
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(63,913,645)
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|
(44,076,349)
|
|
(7,103,818)
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|
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|
Gross
loss
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(14,285,975)
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(5,203,219)
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(7,219,703)
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(1,163,605)
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Operating
Expenses:
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|
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|
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Product
development
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(79,550,315)
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(100,558,324)
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(76,702,721)
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(12,362,235)
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Sales
and marketing
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(18,270,728)
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(49,663,417)
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(33,487,372)
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(5,397,185)
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General
and administrative
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(51,629,447)
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(66,923,309)
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(59,527,803)
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(9,594,139)
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Impairment on
equipment , intangible assets, other assets and
allowance(reversal of allowance) of long-term
receivable
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(3,555,845)
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(35,466,122)
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17,927,763
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2,889,431
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Gain on
disposal of subsidiaries
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0
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0
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165,392,382
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26,656,413
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|
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Total operating
expenses
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(153,006,335)
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(252,611,172)
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13,602,249
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2,192,285
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Other operating
Income
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50,000
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55,372
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25,000
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4,029
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Income (loss)
from operations
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(167,242,310)
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(257,759,019)
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6,407,546
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1,032,709
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Investment
income from cost method investment
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0
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0
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1,142,353
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184,114
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Interest
income, net
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1,482,111
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2,605,392
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|
1,932,448
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|
311,454
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Other
income(expense),net
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3,276,714
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6,985,096
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(5,382,192)
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(867,452)
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Profit (Loss)
before income tax expense, gain on investment disposal, impairment
loss on investments and share of loss in equity
investments
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(162,483,485)
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(248,168,531)
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4,100,155
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660,825
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Income tax
expense
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0
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0
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0
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0
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Profit (Loss)
before gain on investment disposal, impairment loss on investments
and share of loss in equity investments
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(162,483,485)
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(248,168,531)
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4,100,155
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660,825
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Gain on disposal of equity investee and available-for-sale investment
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9,403,451
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0
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23,750,001
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3,827,805
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Impairment loss
on investments
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0
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(15,181,566)
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0
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0
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Share of loss
in equity investments
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(879,476)
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(411,547)
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(2,833,054)
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(456,606)
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Net profit
(loss)
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(153,959,510)
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(263,761,644)
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25,017,102
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4,032,024
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Net loss
attributable to noncontrolling
interest
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(12,046,743)
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(19,401,046)
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(9,396,578)
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(1,514,454)
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Net loss
attributable to redeemable noncontrolling interest
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0
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0
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(20,876,617)
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(3,364,700)
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Net profit
(loss) attributable to The9 Limited
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(141,912,767)
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(244,360,598)
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55,290,297
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8,911,178
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Accretion on
redeemable noncontrollling interest
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0
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0
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21,076,744
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3,396,955
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Net profit
(loss) attributable to holders of ordinary shares
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(141,912,767)
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(244,360,598)
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34,213,553
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5,514,223
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Net profit
(loss) attributable to holders of ordinary shares per
share
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-
Basic
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(6.13)
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(10.64)
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1.48
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0.24
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Weighted
average number of shares outstanding
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-
Basic
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23,146,859
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22,968,487
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23,182,241
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23,182,241
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THE9
LIMITED
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CONSOLIDATED
BALANCE SHEETS INFORMATION
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(Expressed
in Renminbi - RMB and US Dollars - US$)
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As of December 31, 2013
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As of
December 31, 2014
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RMB
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RMB
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US$
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(audited)
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(unaudited)
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(unaudited)
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Assets
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Current
Assets
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Cash and
cash equivalents
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156,987,201
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181,482,300
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29,249,638
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Accounts
receivable
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|
19,138,096
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|
11,804,750
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1,902,581
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Advances
to suppliers, net
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4,525,549
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733,339
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|
118,193
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Prepayments and other current assets, net
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32,464,598
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|
56,573,321
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|
9,117,964
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Prepaid
royalties
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4,878,579
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0
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0
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Deferred
costs
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68,217
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9,745
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|
1,571
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Amounts
due from a related party
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0
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5,250,000
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846,146
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Total current
assets
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218,062,240
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|
255,853,455
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41,236,093
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Restricted
cash
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700,000
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0
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0
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Investments in
equity investees
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50,848,141
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39,223,925
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6,321,749
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Property,
equipment and software, net
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50,439,400
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36,346,230
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5,857,949
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Goodwill
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9,710,854
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9,746,054
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|
1,570,779
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Intangible
assets, net
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128,643,824
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|
97,539,341
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15,720,488
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Land use right,
net
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72,194,206
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70,273,296
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11,325,999
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Other long-term
assets, net
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16,080,483
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|
8,348,409
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|
1,345,519
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Total
Assets
|
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546,679,148
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|
517,330,710
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83,378,576
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|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
69,376,348
|
|
40,213,660
|
|
6,481,266
|
Other
taxes payable
|
|
1,238,852
|
|
932,431
|
|
150,281
|
Advances
from customers
|
|
18,896,049
|
|
16,833,165
|
|
2,713,014
|
Amounts
due to related
parties
|
|
4,799,753
|
|
6,304,956
|
|
1,016,174
|
Deferred
revenue
|
|
20,113,256
|
|
20,434,962
|
|
3,293,518
|
Refund
of game points
|
|
169,998,682
|
|
169,998,682
|
|
27,398,814
|
Other
payables and accruals
|
|
45,669,488
|
|
41,872,851
|
|
6,748,679
|
Total current
liabilities
|
|
330,092,428
|
|
296,590,707
|
|
47,801,746
|
Long-term
accounts payable
|
|
21,110,517
|
|
18,992,201
|
|
3,060,987
|
Deferred tax
liabilities, non-current
|
|
5,343,060
|
|
5,362,427
|
|
864,266
|
Total
Liabilities
|
|
356,546,005
|
|
320,945,335
|
|
51,726,999
|
|
|
|
|
|
|
|
Redeemable
Noncontrolling Interest
|
|
0
|
|
131,497,104
|
|
21,193,486
|
Ordinary shares
(US$0.01 par value;
23,146,859 and 23,201,601 shares issued and
outstanding as of December 31, 2013 and
December 31, 2014, respectively)
|
|
1,881,784
|
|
1,885,153
|
|
303,832
|
Additional paid-in capital
|
|
2,152,320,786
|
|
2,075,900,461
|
|
334,574,422
|
Statutory reserves
|
|
28,071,982
|
|
28,071,982
|
|
4,524,382
|
Accumulated other comprehensive loss
|
|
(8,987,041)
|
|
(8,638,604)
|
|
(1,392,290)
|
Accumulated deficit
|
|
(1,912,569,874)
|
|
(1,999,192,344)
|
|
(322,211,318)
|
The9 Limited
shareholders' equity
|
|
260,717,637
|
|
98,026,648
|
|
15,799,028
|
Noncontrolling
interests
|
|
(70,584,494)
|
|
(33,138,377)
|
|
(5,340,937)
|
Total
equity
|
|
190,133,143
|
|
64,888,271
|
|
10,458,091
|
Total
liabilities, redeemable noncontrolling interest and
equity
|
|
546,679,148
|
|
517,330,710
|
|
83,378,576
|
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|
|
|
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|
Note: The United States dollar
("US dollar" or "US$") amounts disclosed in the accompanying
financial statements are presented solely for the convenience of
the readers at the rate of US$1.00
=RMB6.2046, representing the noon
buying rate in the City of New
York for cable transfers of RMB, as certified for customs
purposes by the Federal Reserve Bank of New York, on December
31, 2014.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the9-limited-announces-unaudited-financial-information-as-of-and-for-the-six-months-ended-december-31-2014-300056430.html
SOURCE The9 Limited