HONG KONG, Nov. 21, 2014 /PRNewswire/ -- Tian Ge Interactive
Holdings Limited ("Tian Ge" or the "Company", 1980.HK), a leading
provider of comprehensive Internet services in China, today announced the unaudited
consolidated results for the Third Quarter of 2014 ended
September 30, 2014.
Highlights of the Third Quarter of 2014
- Total revenues up 23.9% to RMB173.1
million from RMB139.7 million
in the corresponding period of 2013.
- Revenues from Live Social Video Platform increased by 16.8% to
RMB161.5 million, from RMB138.3 million, however the actual growth rate
should have reached 23.8% year-over-year ("YoY") excluding the VAT
effect as our revenues are now recorded as net off 6% VAT tax after
June 1, 2014.
- Revenues from Games and Others increased seven-fold by
recording a 731.9% growth to RMB11.6
million from RMB1.4 million in
the corresponding period of 2013.
- Gross profit up 26.2% to RMB153.1
million from RMB121.3 million.
Gross margin increased to 88.5% from 86.8% in the corresponding
period of 2013.
- Adjusted EBITDA increased by 32.1% to RMB80.7 million. Adjusted EBITDA margin increased
to 46.6%.
- Adjusted net profit significantly increased by 44.4% to
RMB71.6 million and adjusted net
margin increased to 41.4% from 35.5% in the corresponding period of
2013.
- Adjusted diluted earnings per share were RMB0.05 remains the same as in the previous
quarter.
- Adjusted basic earnings per share slightly decreased to
RMB0.06.
Live Social Community Platform statistics
for the Third Quarter of 2014
- Monthly Active Users ("MAU") were 14.4 million, an increase of
6.9% from 13.4million in the previous quarter or an increase of
23.1% from 11.7 million in the corresponding period of 2013.
- Monthly Paying Users were 335,000, an increase of 0.9% from
332,000 in the previous quarter or an increase of 30.9% from
256,000 in the corresponding period of 2013.
- Monthly Average Revenue Per User ("ARPU") was RMB161, compared to RMB158 in the previous quarter or RMB180 in the corresponding period of 2013.
- Number of Rooms was 29,676, an increase of 0.8% from 29,449 in
the previous quarter or an increase of 11.1% from 26,710 in the
corresponding period of 2013.
- Number of Hosts was 39,309, an increase of 2.2% from 38,448 in
the previous quarter or an increase of 21.0% from 32,493 in the
corresponding period of 2013.
Business Review
Our encouraging performance in the third quarter was mainly
driven by continued solid growth of growth in the number of our
live social community platform, and our mobile game. Our mobile MAU
in the third quarter of 2014 increased to 10.0% from 7.4% in the
previous quarter.
During the reviewing period, we launched an open beta version of
our new live social video embedded RPG game, JS Beauty, in
September. Early results are encouraging as we are able to leverage
our established host ecosystem and resources to attract new users,
and our innovative socialization features could potentially
increase monetization, user engagement and user life cycle.
The introduction and expansion of games on our platform allows
us to leverage our large social video community, diversify our
revenue mix and drive future growth. We believe that our large and
rapidly growing user base enhances cross-promotion potential and
minimizes customer acquisition costs.
In view of our O2O karaoke test locations results have been
positive and we are evaluating opportunities to possibly expand our
testing with additional partners with regional or national
scale.
Commented on the third quarter performance, Mr. Mike Fu, Chairman and CEO of Tian Ge, stated,
"We achieve another solid growth in our platforms, revenue and
earnings. Our growth in mobile MAU in the third quarter witnesses
the success of our mobile strategy. Going forward, we intend to
leverage our strong position in music and entertainment and large
user base to expand into new content genres including finance,
health, live social video embedded games, and e-commerce."
Financial Review
Revenues
For the third quarter of 2014, the Company registered 23.9% YoY
growth in revenues to RMB173.1million, driven by continued solid growth
of our Live Social Video Platform, and from the continued success
of Tian Ge's mobile game "Three Kingdoms". Revenues from our Live
Social Video Platform was primarily led by an approximate 30.9%
growth in our monthly paying users and partially offset by a 10.6%
decline in our monthly ARPU.
Cost of Revenues and Gross Margins
Cost of revenues experienced a slight increase of 8.7% to
RMB20.0 million in the third quarter
of 2014 as compared with the corresponding period in 2013. The
slight increase was primarily due to the higher costs related to
the launch and operation of our mobile game "Three Kingdoms" and
offset by the saving of business tax and surcharges after the VAT
reform as mentioned in the above section. As a result, gross
margin for the third quarter of 2014 was 88.5%, compared with 86.8%
in the corresponding period in 2013.
Selling & Marketing Expenses
Selling and marketing expenses increased by 56.5% to
RMB61.2 million for the third quarter
of 2014 from RMB39.1 million in the
corresponding period in 2013, primarily due to the increase of
promotion and advertising expenses applied to (a) our existing Live
Social Video Platforms, including to promote our live social mobile
traffic; (b) our newly launched mobile games and beta-testing soft
launched live social video-embedded games, and (c) an increase in
share-based compensation.
Administrative Expenses
Administrative expenses increased by 199.2% to RMB36.8million for the third quarter of 2014 from
RMB12.3 million in the corresponding
period in 2013, primarily due to an increase in share-based
compensation of RMB17.0 million and
listing expenses related to our IPO
of RMB8.2 million. The increase is
partially offset by the decrease of business tax and related
surcharges of RMB3.8 million
benefiting from the VAT reform effective from June 1, 2014.
Research & Development Expenses
Research and development expenses increased by 38.6% year over
year to RMB23.0 million for the third
quarter of 2014 from RMB16.6 million
in the corresponding period in 2013, primarily due to the increase
in employee cost and new research and development investment in
mobile games.
Operating Profit
Operating profit decreased by 14.7% to RMB48.5 million for the third quarter of 2014
from RMB56.9 million in the
corresponding period in 2013, primarily due to (a) the increase in
share-based compensation expenses to RMB19.5million for the third quarter of 2014
compared with RMB0.9million for the
corresponding period in 2013, largely related to "Pre-IPO RSU
Scheme" adopted on May 22, 2014 as
disclosed in our Global Offering prospectus dated June 25, 2014 and (b) the impact of RMB8.2million of listing expenses related to our
IPO. Excluding these effects, operating profit would have increased
31.8% YoY.
Impact of Convertible Redeemable Preferred Shares
As disclosed and discussed in our recent Global Offering
prospectus dated June 25, 2014 and in
accordance with IFRS reporting standards, we incurred a fair value
loss of convertible redeemable preferred shares of RMB23.1million and RMB79.0million for the three months ended
September 30, 2014 and 2013,
respectively. The loss and changes in fair value are the result of
the continued increase in the equity value of the Company. Upon
completion of the IPO on July 9,
2014, these convertible redeemable preferred shares were
automatically converted into Ordinary shares on a one-to-one basis
and there will be no fair value gain or loss associated with these
shares to be recognized in periods afterwards.
Adjusted EBITDA
Adjusted EBITDA increased by 32.1% to RMB80.7 million from RMB61.1 million in the corresponding period of
2013. Adjusted EBITDA margin was 46.6%, compared to 43.7% in the
corresponding period of 2013. Adjusted EBITDA represents operating
profit adjusted to exclude non-cash share-based compensation
expenses, listing expenses, depreciation and amortization.
Adjusted Net Profit and Earnings Per Share
For the third quarter of 2014, adjusted net profit increased by
44.4% to RMB71.6 million from
RMB49.6million in the corresponding
period of 2013. Adjusted diluted earnings per share is RMB0.05, same as in the corresponding period of
2013.
Adjusted net profit is not defined under IFRS, and eliminates
the effect of non-cash fair value changes of convertible redeemable
preferred shares, gains on repurchase of preferred shares,
dividends related to redeemable preferred shares, listing expenses
and non-cash share based compensation expenses.
Balance Sheet / Net Cash Position
As of September 30, 2014, the
Company had cash, cash equivalents, term deposits with initial
terms over three months and RMB-denominated principal-protected
structured deposits (recorded under current available-for-sale
financial assets) in the aggregate amount of RMB1,878.3 million. The Company adopts
conservative treasury policies in cash and financial management,
and does not use any financial instruments for hedging
purposes.
All bank borrowings had been repaid before September 30, 2014.
Capital Expenditures
For the third quarter of 2014, our capital expenditures were
approximately RMB24.4 million,
including approximately RMB7.0
million related to the purchase of our new office space
located in Shanghai, which had
transferred to our fixed assets in August
2014 with total amount of approximately RMB15.0 million; approximately RMB8.9 million related to the pre-payment of new
office space located in Beijing,
and RMB8.5 million related to other
office equipment, servers, etc.
Outlook
Looking forward, in order to strengthen our game business, we
scheduled to launch "Power Pets", the second and newest RPG
style mobile game licensed from a third party developer. We expect
to release in total, 6 to 8 self-developed and third-party
developed mobile games through 2015, some of which could enable
interactive video functionality.
Our mobile strategy will continue to take full advantage of the
technological and infrastructure improvements in China, including the ongoing recent rollout of
4G services, which will support high-quality video streams on
mobile devices.
We plan to pursue business expansion by carefully considering
partnerships, acquisitions and industrial consolidations with big
industry players and/or potential partners. We will initially
target companies with large user bases and similar interactive
product offerings, or those in our upstream and downstream markets.
We received strong interest for new vertical cooperation
opportunities from our existing cornerstone investors and strategic
partners. We aim to leverage our strong technological capabilities
and infrastructure, large and loyal user base and established
social ecosystem to successfully expand into new markets and
sectors.
Conference Call Information
The Company will host a conference call at 7:30 p.m. ET on November
23, 2014 (8:30 a.m. Beijing
Time on November 24, 2014) to review
the Company's financial results and answer questions. You may
access the live interactive call via:
- 1-888-346-8982 (U.S. Toll Free)
- 1-412-902-4272 (International)
- 852-301-84992 (Hong Kong-LocalToll Free)
- 800-905945 (Hong Kong Toll Free)
- 4001-201203 (China Toll
Free)
- 86-105-357-3132 (Beijing-Local Toll Free)
Please dial-in approximately 5 minutes in advance to facilitate
a timely start.
A replay will be available until 9:00
p.m. ET on September 2, 2014
and may be accessed via:
- Dial-in number: 1-877-344-7529 (US Toll Free),
1-412-317-0088 (International Toll) and 855-669-9658 (Canada Toll
Free)
- Replay Access Code: 10056457
- Replay link:
http://mms.prnasia.com/tiange/20141123/default.aspx
A live and archived webcast of the call will be available on the
Company's website at
http://www.tiange.com/enInvestor/Index1.html.
About Tian Ge
Tian Ge develops and operates innovative real-time video
technologies that empower users to engage and interact with each
other through video, voice, text and exchange of virtual items. The
Company's mission is to bring optimism and joy to the masses
through live social video interaction. Tian Ge was founded in
Hangzhou, China in 2008 and went
public on the Hong Kong Stock Exchange in July 2014.
The Company currently operates eight "many-to-many" live social
video communities, including 9158 Video Community and Sina Show, the two primary communities; and one
"one-to-many" community, Sina Showcase. Tian Ge's users are able to
meet and stay connected with others who share similar backgrounds,
interests, cultures and dialects.
The Company's communities offer a diverse range of room genres
including music, talk show, social networking, finance and
education. Users join and engage in real-time activities including
karaoke, birthday parties, talent contests, and annual
celebrations.
For more information, please visit www.tiange.com
For enquiries, please contact:
Kenneth Ke
Tel: +86 571 8832 3560
Email: IR@tiange.com
Non-IFRS Financial Measures – Adjusted Net Profit and
EBITDA
To supplement our consolidated results of the Company prepared
in accordance with IFRS, adjusted net profit and adjusted EBITDA
are used as additional financial measures. These financial measures
are presented because they are used by management to evaluate
operating performance. The Company also believes that these
non-IFRS measures provide useful information to help investors and
others understand and evaluate the Company's consolidated results
of operations in the same manner as management and in comparing
financial results across accounting periods and to those of our
peer companies.
Forward-Looking Statements
This press release contains forward-looking statements relating
to the business outlook, forecast business plans and growth
strategies of the Company. These forward-looking statements are
based on information currently available to the Company and are
stated herein on the basis of the outlook at the time of this press
release. They are based on certain expectations, assumptions and
premises, some of which are subjective or beyond the Company's
control. These forward-looking statements may prove to be incorrect
and may not be realized in future. Underlying the forward-looking
statements is a large number of risks and uncertainties. Further
information regarding these risks and uncertainties is included in
the Company's other public disclosure documents available on the
corporate website.
TIAN GE
INTERACTIVE HOLDINGS LIMITED
|
CONDENSED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
FOR THE THREE AND
NINE MONTHS ENDED SEPTEMBER 30, 2014
|
|
|
|
Unaudited
|
|
Three months
ended
|
|
Nine months
ended
|
September
30,
|
September
30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
RMB'000
|
|
RMB'000
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
173,086
|
|
139,672
|
|
517,343
|
|
399,449
|
Cost of
revenue
|
(19,986)
|
|
(18,382)
|
|
(74,040)
|
|
(48,593)
|
Gross
profit
|
153,100
|
|
121,290
|
|
443,303
|
|
350,856
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
(61,227)
|
|
(39,122)
|
|
(156,051)
|
|
(116,074)
|
Administrative
expenses
|
(36,762)
|
|
(12,263)
|
|
(106,376)
|
|
(33,933)
|
Research and
development expenses
|
(22,984)
|
|
(16,632)
|
|
(56,961)
|
|
(48,211)
|
Other gains,
net
|
16,378
|
|
3,589
|
|
30,455
|
|
16,492
|
Operating
profit
|
48,505
|
|
56,862
|
|
154,370
|
|
169,130
|
|
|
|
|
|
|
|
|
Finance
income
|
3,325
|
|
1,307
|
|
6,318
|
|
35,931
|
Finance
costs
|
(725)
|
|
(559)
|
|
(2,564)
|
|
(36,363)
|
Finance income /
(costs), net
|
2,600
|
|
748
|
|
3,754
|
|
(432)
|
Fair value loss of
convertible redeemable preferred shares
|
(23,057)
|
|
(79,034)
|
|
(283,559)
|
|
(264,976)
|
|
|
|
|
|
|
|
|
Profit / (loss)
before income tax
|
28,048
|
|
(21,424)
|
|
(125,435)
|
|
(96,278)
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(7,189)
|
|
(8,938)
|
|
(27,882)
|
|
(26,024)
|
|
|
|
|
|
|
|
|
Profit / (loss)
for the period
|
20,859
|
|
(30,362)
|
|
(153,317)
|
|
(122,302)
|
|
|
|
|
|
|
|
|
Other
comprehensive income / (loss)
|
|
|
|
|
|
|
|
Item that may be
reclassified subsequently to profit or loss :
|
|
|
|
|
|
|
|
Currency translation
differences
|
(3,001)
|
|
3,213
|
|
(9,170)
|
|
12,134
|
|
|
|
|
|
|
|
|
Total
comprehensive income / (loss) for the period
|
17,858
|
|
(27,149)
|
|
(162,487)
|
|
(110,168)
|
|
|
|
|
|
|
|
|
Profit / (loss)
attributable to:
|
|
|
|
|
|
|
|
- Shareholders of the
Company
|
20,582
|
|
(30,180)
|
|
(153,771)
|
|
(122,120)
|
- Non-controlling
interests
|
277
|
|
(182)
|
|
454
|
|
(182)
|
|
20,859
|
|
(30,362)
|
|
(153,317)
|
|
(122,302)
|
|
|
|
|
|
|
|
|
Total
comprehensive income / (loss) attributable to:
|
|
|
|
|
|
|
|
- Shareholders of the
Company
|
17,581
|
|
(26,967)
|
|
(162,941)
|
|
(109,986)
|
- Non-controlling
interests
|
277
|
|
(182)
|
|
454
|
|
(182)
|
|
17,858
|
|
(27,149)
|
|
(162,487)
|
|
(110,168)
|
|
|
|
|
|
|
|
|
Earnings / (loss)
per share (expressed in RMB per share)
|
|
|
|
|
|
|
|
- Basic
|
0.018
|
|
(0.047)
|
|
(0.190)
|
|
(0.191)
|
- Diluted
|
0.016
|
|
(0.047)
|
|
(0.190)
|
|
(0.191)
|
|
|
|
|
|
|
|
|
Dividends
|
-
|
|
-
|
|
-
|
|
89,739
|
TIAN GE
INTERACTIVE HOLDINGS LIMITED CONDENSED CONSOLIDATED
BALANCE SHEET AS AT SEPTEMBER 30,
2014
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
Audited
|
|
|
September 30,
2014
|
|
December
31, 2013
|
|
|
RMB'000
|
|
RMB'000
|
|
Assets
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Property and
equipment
|
142,677
|
|
16,736
|
|
Intangible
assets
|
48,210
|
|
5,864
|
|
Investment in
associates
|
2,977
|
|
4,900
|
|
Available-for-sale
financial assets
|
26,910
|
|
2,300
|
|
Prepayments and other
receivables
|
27,173
|
|
110,737
|
|
Deferred income tax
assets
|
23,319
|
|
24,348
|
|
Term deposits with
initial term over 3 months
|
478,224
|
|
-
|
|
Restricted
cash
|
-
|
|
87,000
|
|
|
749,490
|
|
251,885
|
|
Current
assets
|
|
|
|
|
Trade
receivables
|
19,106
|
|
20,804
|
|
Prepayments and other
receivables
|
55,894
|
|
66,788
|
|
Available-for-sale
financial assets
|
527,627
|
|
278,140
|
|
Term deposits with
initial term over 3 months
|
485,631
|
|
21,873
|
|
Cash and cash
equivalents
|
386,812
|
|
171,896
|
|
Restricted
cash
|
-
|
|
33,000
|
|
|
1,475,070
|
|
592,501
|
|
Total
assets
|
2,224,560
|
|
844,386
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Equity attribute
to Shareholders of the Company
|
|
|
|
|
Share
capital
|
781
|
|
42
|
|
Shares held for RSU
Scheme
|
(44)
|
|
-
|
|
Reserves
|
2,481,485
|
|
205,408
|
|
Accumulated
deficits
|
(447,777)
|
|
(294,006)
|
|
|
2,034,445
|
|
(88,556)
|
|
Non-controlling
interests
|
5,351
|
|
4,897
|
|
|
|
|
|
|
Total
equity
|
2,039,796
|
|
(83,659)
|
|
|
|
|
|
|
|
|
|
|
|
TIAN GE
INTERACTIVE HOLDINGS LIMITED CONDENSED CONSOLIDATED
BALANCE SHEET AS AT SEPTEMBER 30,
2014
|
|
|
|
|
|
|
Unaudited
|
|
Audited
|
|
|
September 30,
2014
|
|
December 31,
2013
|
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
Borrowings
|
-
|
|
79,260
|
|
Convertible
redeemable preferred shares
|
-
|
|
548,471
|
|
Deferred income tax
liabilities
|
422
|
|
595
|
|
Other non-current
liabilities
|
1,400
|
|
-
|
|
|
1,822
|
|
628,326
|
|
Current
liabilities
|
|
|
|
|
Trade
payables
|
31,322
|
|
13,883
|
|
Other payables and
accruals
|
75,035
|
|
114,631
|
|
Income tax
liabilities
|
42,992
|
|
42,532
|
|
Dividend
payable
|
-
|
|
74,161
|
|
Borrowings
|
-
|
|
30,485
|
|
Customer advance and
deferred revenue
|
33,593
|
|
24,027
|
|
|
182,942
|
|
299,719
|
|
|
|
|
|
|
Total
liabilities
|
184,764
|
|
928,045
|
|
|
|
|
|
|
Total equity and
liabilities
|
2,224,560
|
|
844,386
|
|
|
|
|
|
|
Net current
assets
|
1,292,128
|
|
292,782
|
|
|
|
|
|
|
Total assets less
current liabilities
|
2,041,618
|
|
544,667
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Tian Ge Interactive Holdings Limited