UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 


 

FORM 6-K

 


 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2014

 

Commission File Number: 001-33587

 


 

PERFECT WORLD CO., LTD.

 


 

Perfect World Plaza, Building 306, 86 Beiyuan Road

Chaoyang District, Beijing 100101

People’s Republic of China

(86 10) 5780-5700

(Address of principal executive offices)

 


 

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     x

 

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

 

 

 



 

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.

 

 

 

Perfect World Co., Ltd.

 

 

 

 

 

By:

/s/ Kelvin Wing Kee Lau

 

Name:

Kelvin Wing Kee Lau

 

Title:

Chief Financial Officer

 

Date: November 26, 2014

 

2



 

EXHIBIT INDEX

 

 

 

Page

Exhibit 99.1 — Press release

 

4

 

3



Exhibit 99.1

 

 

PERFECT WORLD ANNOUNCES THIRD QUARTER 2014 UNAUDITED FINANCIAL RESULTS

 

(Beijing, China — November 25, 2014) — Perfect World Co., Ltd. (NASDAQ: PWRD) (“Perfect World” or the “Company”), a leading online game developer and operator based in China, today announced its unaudited financial results for the third quarter ended September 30, 2014.

 

Third Quarter 2014 Highlights1

 

·                          Total revenues were RMB974.3 million (USD158.7 million), compared with RMB928.4 million in the previous quarter and RMB820.2 million in the same quarter last year.

 

·                          Gross profit was RMB672.4 million (USD109.5 million), compared with RMB678.6 million in the previous quarter and RMB637.7 million in the same quarter last year.

 

·                          Operating loss was RMB23.3 million (USD3.8 million), compared with operating profit of RMB128.2 million in the previous quarter and RMB115.1 million in the same quarter last year.  Excluding the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact, non-GAAP operating profit2 was RMB42.4 million (USD6.9 million), compared with RMB138.4 million in the previous quarter and RMB135.7 million in the same quarter last year.

 

·                          Net income attributable to the Company’s shareholders was RMB60.7 million (USD9.9 million), compared with RMB161.7 million in the previous quarter and RMB120.9 million in the same quarter last yearExcluding the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact, non-GAAP net income attributable to the Company’s shareholders2 was RMB126.4 million (USD20.6 million), compared with RMB171.9 million in the previous quarter and RMB141.5 million in the same quarter last year.

 

·                          Basic and diluted earnings per ADS3 were RMB1.22 (USD0.20) and RMB1.20 (USD0.19), respectively, compared with RMB3.26 and RMB3.21, respectively, in the previous quarter, and RMB2.47 and RMB2.41, respectively, in the same quarter last yearExcluding the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact, non-GAAP basic and diluted earnings per ADS2 were RMB2.55 (USD0.42) and RMB2.49 (USD0.41),

 


1  The U.S. dollar (USD) amounts disclosed in this press release, except for those transaction amounts that were actually settled in U.S. dollars, are presented solely for the convenience of the reader.  The conversion of Renminbi (RMB) into USD in this release is based on the noon buying rate in The City of New York for cable transfers in RMB per USD as certified for customs purposes by the Federal Reserve Bank of New York as of September 30, 2014, which was RMB6.1380 to USD1.00.  The percentages stated in this press release are calculated based on the RMB amounts.

 

2  As used in this press release, non-GAAP operating profit, non-GAAP net income attributable to the Company’s shareholders and non-GAAP earnings per ADS are defined to exclude the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact from operating profit, net income attributable to the Company’s shareholders and earnings per ADS, respectively.  See “Non-GAAP Financial Measures” and “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.

 

3  Each ADS represents five ordinary shares.

 

4



 

respectively, compared with RMB3.47 and RMB3.41, respectively, in the previous quarter, and RMB2.89 and RMB2.82, respectively, in the same quarter last year.

 

Mr. Robert Xiao, CEO of Perfect World commented, “We are pleased to announce our third quarter results.  Total revenues rose by 5% quarter-over-quarter, which came in line with our expectations.  The sequential revenue growth was mainly attributed to our newly launched mobile games ‘CrossGate Mobile’ and ‘Forsaken World. ‘DOTA2,’ a world-class title for which we have obtained exclusive rights to operate in mainland China, also continued to perform well.”

 

“During the third quarter, we continued to expand our portfolio by launching new games and releasing expansion packs for our existing games.  In addition to launching ‘CrossGate Mobile’ early in the quarter, we launched ‘Legend of the Condor Heroes,’ a 3D MMORPG based on one of Louis Cha’s classic martial arts novels, and the mobile game ‘Touch’ toward the end of the quarter.  We also launched the console version of ‘Neverwinter’ in mainland China through the Xbox One platform, and we are working on localizing a PC version of the game for China.  Moreover, we have a variety of upcoming titles in our mobile game pipeline, such as ‘Forever Mars,’ ‘Dawn after Dark,’ ‘Swordsman Mobile,’ and ‘Saint Seiya Mobile.’ ”

 

“Research and development continues to be our main competitive advantage.  In order to further bolster our competitive edge in this area, we recently restructured our R&D teams to form five new subsidiaries.  We believe this new structure will help better incentivize top talent, support game design flexibility, allow faster reaction to changing market trends, and boost game development productivity.”

 

“During the quarter, we continued to make progress in launching our games in various markets through our overseas partners and subsidiaries.  At the same time, we face fierce competition in the global market.  In view of U.S. subsidiary’s recent performance and near-term business outlook that are below our expectations, we recognized acquisition-related impairments in this quarter.  However, we are still confident in the long-term prospects of our U.S. subsidiary given its strong R&D and operational capabilities as well as promising pipeline.   With our extensive overseas network that covers more than 100 countries and regions around the world, we remain committed to further expanding our overseas penetration and bolstering our global presence.”

 

“We are constantly on the lookout to identify new market trends as we endeavor to position ourselves to capture growth opportunities in the global market.  We believe our strategies will bring long term value to our shareholders as we seek to create captivating entertainment experiences for gamers worldwide.”

 

5



 

Third Quarter 2014 Financial Results

 

Total Revenues

 

Total revenues were RMB974.3 million (USD158.7 million), compared with RMB928.4 million in the previous quarter and RMB820.2 million in the same quarter last year.

 

Online game operation revenues, which include both domestic and overseas online game operations, were RMB919.5 million (USD149.8 million), compared with RMB861.1 million in the previous quarter and RMB750.2 million in the same quarter last year.  The increase from the previous quarter was mainly due to the strong performance of the Company’s mobile games, such as the newly launched “CrossGate Mobile” and “Forsaken World.”

 

The aggregate average concurrent users (ACU) for PC games under operation in mainland China was approximately 623,000, compared with 661,000 in the previous quarter and 778,000 in the same quarter last year.

 

Licensing revenues were RMB38.6 million (USD6.3 million), compared with RMB48.9 million in the previous quarter and RMB39.1 million in the same quarter last year.  The decrease from the previous quarter was mainly because the Company had fewer major new game launches through its partners in overseas markets in 3Q14.

 

Other revenues were RMB16.2 million (USD2.6 million), compared with RMB18.3 million in the previous quarter and RMB30.9 million in the same quarter last year.

 

Cost of Revenues

 

Cost of revenues was RMB301.9 million (USD49.2 million), compared with RMB249.8 million in the previous quarter and RMB182.5 million in the same quarter last year.  The increase from the previous quarter was mainly due to an increase in revenue sharing, particularly with mobile game distribution channels as a result of the strong performance of the Company’s mobile games in 3Q14.

 

Gross Profit and Gross Margin

 

Gross profit was RMB672.4 million (USD109.5 million), compared with RMB678.6 million in the previous quarter and RMB637.7 million in the same quarter last year.  Gross margin was 69.0%, compared with 73.1% in the previous quarter and 77.8% in the same quarter last year.

 

Operating Expenses

 

Operating expenses were RMB695.7 million (USD113.3 million), compared with RMB550.3 million in the previous quarter and RMB522.6 million in the same quarter last year.  The increase in operating expenses from the previous quarter was mainly due to an increase in sales and marketing expenses, the goodwill impairment and the impairment of intangibles via acquisitions associated with the Company’s U.S. subsidiary, as well as higher R&D expenses in 3Q14.

 

6



 

R&D expenses were RMB280.8 million (USD45.7 million), compared with RMB259.8 million in the previous quarter and RMB236.0 million in the same quarter last year. The increase from the previous quarter was primarily due to an increase in staff cost.

 

Sales and marketing expenses were RMB267.1 million (USD43.5 million), compared with RMB197.8 million in the previous quarter and RMB210.2 million in the same quarter last year.  The increase from the previous quarter was primarily due to an increase in advertising and promotional expenses associated with several recently-launched new games.

 

General and administrative expenses were RMB117.3 million (USD19.1 million), compared with RMB92.8 million in the previous quarter and RMB76.4 million in the same quarter last year.    The increase from the previous quarter was mainly due to the impairment of intangibles via acquisitions associated with the Company’s U.S. subsidiary.

 

Goodwill impairment was RMB30.5 million (USD5.0 million), as compared with Nil in the previous quarter and Nil in the same quarter last year.  The increase was primarily due to the goodwill impairment associated with the Company’s U.S. subsidiary.

 

Operating Loss/Profit

 

Operating loss was RMB23.3 million (USD3.8 million), compared with operating profit of RMB128.2 million in the previous quarter and RMB115.1 million in the same quarter last year.  Excluding the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact, non-GAAP operating profit was RMB42.4 million (USD6.9 million), compared with RMB138.4 million in the previous quarter and RMB135.7 million in the same quarter last year.

 

Total Other Income

 

Total other income was RMB100.7 million (USD16.4 million), compared with RMB42.1 million in the previous quarter and RMB26.6 million in the same quarter last year.  The increase from the previous quarter was largely due to an investment gain, including the gain of approximately RMB28.5 million from the sale of 30,326,005 class A ordinary shares of Shanda Games Limited, and a foreign exchange gain recognized in 3Q14.

 

Income Tax Expense

 

Income tax expense was RMB29.1 million (USD4.7 million), compared with RMB10.5 million in the previous quarter and RMB14.1 million in the same quarter last year.  The increase from the previous quarter was primarily because some of the Company’s controlled entities that are subject to higher tax rates earned more pre-tax profit than the previous quarter.

 

Net Income Attributable to the Company’s Shareholders

 

Net income attributable to the Company’s shareholders was RMB60.7 million (USD9.9 million), compared with RMB161.7 million in the previous quarter and RMB120.9 million in the same quarter last year.  Excluding the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact, non-GAAP net income attributable to the Company’s shareholders was RMB126.4 million (USD20.6

 

7



 

million), compared with RMB171.9 million in the previous quarter and RMB141.5 million in the same quarter last year.

 

Basic and diluted earnings per ADS were RMB1.22 (USD0.20) and RMB1.20 (USD0.19), respectively, compared with RMB3.26 and RMB3.21, respectively, in the previous quarter, and RMB2.47 and RMB2.41, respectively, in the same quarter last year.  Excluding the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact, non-GAAP basic and diluted earnings per ADS were RMB2.55 (USD0.42) and RMB2.49 (USD0.41), respectively, compared with RMB3.47 and RMB3.41, respectively, in the previous quarter, and RMB2.89 and RMB2.82, respectively, in the same quarter last year.

 

Cash and Cash Equivalents

 

As of September 30, 2014, the Company had RMB1,278.6 million (USD208.3 million) of cash and cash equivalents, compared with RMB883.6 million as of June 30, 2014.  The increase was mainly due to the proceeds from the sale of 30,326,005 class A ordinary shares of Shanda Games Limited and the net cash inflow generated from the Company’s online game operations. This was partially offset by the investments in certain short-term structured deposits.

 

Business Outlook

 

Based on the Company’s current operations, total revenues for the fourth quarter of 2014 are expected to be between RMB1,023 million and RMB1,072 million, representing an increase of 5% to 10% on a sequential basis.  This takes into consideration the expected growth from the continued strength of the Company’s mobile games.

 

Non-GAAP Financial Measures

 

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents non-GAAP operating profit, non-GAAP net income attributable to the Company’s shareholders and non-GAAP earnings per ADS by excluding the share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact from operating profit, net income attributable to the Company’s shareholders and earnings per ADS, respectively.  The Company believes these non-GAAP financial measures are important to help investors understand the Company’s operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company’s core operating results, as they exclude certain expenses that are not expected to result in cash payments.  The use of the above non-GAAP financial measures has certain limitations.  Share-based compensation charge has been and will continue to be incurred and goodwill impairment and impairment of intangibles via acquisitions of businesses and related tax impact may recur in the future. They are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of the Company’s results.  None of the non-GAAP measures is a measure of net income attributable to the Company’s shareholders, operating profit, operating performance or liquidity presented in accordance with

 

8



 

GAAP.  The Company compensates for these limitations by providing the relevant disclosure of its share-based compensation charge, the goodwill impairment and the impairment of intangibles via acquisitions of businesses and related tax impact in the reconciliations to the most directly comparable GAAP financial measures, which should be considered when evaluating the Company’s performance.  These non-GAAP financial measures should be considered in addition to, but not a substitute for, or superior to, financial measures prepared in accordance with GAAP.  Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measures is set forth at the end of this release.

 

Conference Call

 

Perfect World will host a conference call and live webcast at 8:00pm Eastern Standard Time on Tuesday, November 25, 2014 (9:00am Beijing time on Wednesday, November 26, 2014).

 

Dial-in numbers for the live conference call are as follows:

 

· U.S. Toll Free Number

1-800-742-9301

· International Dial-in Number

+61-2-8373-3610

· Mainland China Toll Free Number

800-870-0210

· Hong Kong Toll Free Number

80-090-6648

· U.K. Toll Free Number

080-8234-1369

Conference ID: PWRD

 

 

A live and archived webcast of the conference call will be available on the Investor Relations section of Perfect World’s website at http://www.pwrd.com.

 

A telephone replay of the call will be available beginning two hours after the conclusion of the conference call through 11:59pm Eastern Time, December 2, 2014.

 

Dial-in numbers for the replay are as follows:

 

· U.S. Toll Free Number

1-855-452-5696

· International Dial-in Number

+61-2-8199-0299

Conference ID: 32595310

 

 

About Perfect World Co., Ltd. (http://www.pwrd.com)

 

Perfect World Co., Ltd. (NASDAQ: PWRD) is a leading online game developer and operator based in China.  Perfect World primarily develops online games based on proprietary game engines and game development platforms.  Perfect World’s strong technology and creative game design capabilities, combined with extensive knowledge and experiences in the online game market, enable it to frequently and promptly introduce popular games designed to cater changing customer preferences and market trends.  Perfect World’s current portfolio of self-developed online games includes massively multiplayer online role playing games (“MMORPGs”):

 

9



 

“Perfect World,” “Legend of Martial Arts,” “Perfect World II,” “Zhu Xian,” “Chi Bi,” “Pocketpet Journey West,” “Battle of the Immortals,” “Fantasy Zhu Xian,” “Forsaken World,” “Empire of the Immortals,” “Return of the Condor Heroes,” “Saint Seiya Online,” “Swordsman Online,” “Holy King” and Legend of the Condor Heroes;” an online casual game: “Hot Dance Party;” and a number of web games and mobile games.  While a majority of the revenues are generated in China, Perfect World operates its games in North America, Europe, Japan, Korea and Southeast Asia through its own subsidiaries.  Perfect World’s games have also been licensed to leading game operators in a number of countries and regions in Asia, Latin America, and the Russian Federation and other Russian speaking territories.  Perfect World intends to continue to explore new and innovative business models and is 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,” “confidence,” “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, Perfect World’s ability to develop and operate new games that are commercially successful, the growth of the online game market and the continuing market acceptance of its games and in-game items in China and elsewhere, its ability to protect intellectual property rights, its ability to respond to competitive pressure, its ability to maintain an effective system of internal control over financial reporting, changes of the regulatory environment in China, and economic slowdown in China and/or elsewhere.  Further information regarding these and other risks is included in Perfect World’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.  All information provided in this press release and in the attachments is as of November 25, 2014, 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.

 

For further information, please contact

 

Perfect World Co., Ltd.

Vivien Wang — Vice President, Capital Market & Corporate Communications

Tel: +86-10-5780-5700

Fax: +86-10-5780-5713

Email: ir@pwrd.com

http://www.pwrd.com

 

Christensen Investor Relations

Patty Bruner

Tel: +1-480-614-3036

Fax: +1-480-614-3033

Email: pbruner@christensenir.com

 

Jung Chang

Tel: +852-2117-0861

Fax: +852-2117-0869

Email: jchang@christensenir.com

 

10



 

Perfect World Co., Ltd.

Unaudited Condensed Consolidated Balance Sheets

 

 

 

December 31,

 

September 30,

 

September 30,

 

 

 

2013

 

2014

 

2014

 

 

 

RMB

 

RMB

 

USD

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

1,212,157,293

 

1,278,600,934

 

208,309,048

 

Restricted cash and time deposits

 

226,100,000

 

785,145,000

 

127,915,445

 

Short-term investments

 

1,307,892,890

 

1,569,576,701

 

255,714,679

 

Accounts receivable, net

 

197,715,605

 

294,503,511

 

47,980,370

 

Due from related parties

 

3,393,089

 

5,989,058

 

975,734

 

Prepayment and other assets

 

424,839,088

 

348,764,736

 

56,820,583

 

Deferred tax assets

 

40,387,485

 

46,062,757

 

7,504,522

 

Total current assets

 

3,412,485,450

 

4,328,642,697

 

705,220,381

 

Non current assets

 

 

 

 

 

 

 

Equity investments

 

470,018,715

 

793,333,459

 

129,249,505

 

Time deposits

 

108,135,489

 

55,652,873

 

9,066,939

 

Restricted time deposits

 

7,597,873

 

7,677,376

 

1,250,794

 

Property, equipment, and software, net

 

1,353,740,512

 

1,327,284,045

 

216,240,477

 

Construction in progress

 

14,051,462

 

8,236,645

 

1,341,910

 

Intangible assets, net

 

330,718,241

 

304,812,000

 

49,659,824

 

Goodwill

 

511,270,880

 

497,164,881

 

80,997,863

 

Prepayments and other assets

 

86,177,977

 

57,145,720

 

9,310,153

 

Deferred tax assets

 

50,830,484

 

61,353,045

 

9,995,609

 

Total assets

 

6,345,027,083

 

7,441,302,741

 

1,212,333,455

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable

 

95,908,036

 

133,684,736

 

21,779,855

 

Short-term bank loans

 

213,391,500

 

725,995,000

 

118,278,755

 

Advances from customers

 

102,469,102

 

67,657,859

 

11,022,786

 

Salary and welfare payable

 

287,057,153

 

337,014,816

 

54,906,291

 

Taxes payable

 

59,756,556

 

91,867,024

 

14,966,931

 

Accrued expenses and other liabilities

 

188,939,187

 

262,196,985

 

42,717,006

 

Due to related parties

 

91,750

 

19,583,570

 

3,190,546

 

Deferred revenues

 

742,171,227

 

850,713,333

 

138,597,806

 

Deferred tax liabilities

 

87,173,299

 

99,093,040

 

16,144,190

 

Deferred government grants

 

5,000,000

 

175,020

 

28,514

 

Total current liabilities

 

1,781,957,810

 

2,587,981,383

 

421,632,680

 

Non current liabilities

 

 

 

 

 

 

 

Deferred revenues

 

38,655,431

 

18,641,535

 

3,037,070

 

Deferred tax liabilities

 

13,408,787

 

19,800,923

 

3,225,957

 

Other long-term liabilities

 

2,800,000

 

2,164,660

 

352,665

 

Total liabilities

 

1,836,822,028

 

2,628,588,501

 

428,248,372

 

 

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

 

Ordinary shares (US$0.0001 par value, 10,000,000,000 shares authorized, 29,671,195 Class A ordinary shares issued and outstanding, 217,308,865 Class B ordinary shares issued and outstanding as of December 31, 2013; 10,000,000,000 shares authorized, 29,671,195 Class A ordinary shares issued and outstanding, 218,940,010 Class B ordinary shares issued and outstanding as of September 30, 2014)

 

197,003

 

198,006

 

32,259

 

Additional paid-in capital

 

452,966,738

 

510,789,751

 

83,217,620

 

Statutory reserves

 

312,339,625

 

312,339,625

 

50,886,221

 

Accumulated other comprehensive loss

 

(126,536,702

)

(147,243,658

)

(23,988,866

)

Retained earnings

 

3,832,064,435

 

4,109,236,964

 

669,474,905

 

Total Perfect World Shareholders’ Equity

 

4,471,031,099

 

4,785,320,688

 

779,622,139

 

Non-controlling interests

 

37,173,956

 

27,393,552

 

4,462,944

 

Total Shareholders’ Equity

 

4,508,205,055

 

4,812,714,240

 

784,085,083

 

Total Liabilities and Shareholders’ Equity

 

6,345,027,083

 

7,441,302,741

 

1,212,333,455

 

 



 

Perfect World Co., Ltd.

Unaudited Condensed Consolidated Statements of Operations

 

 

 

Three months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

 

 

2013

 

2014

 

2014

 

2014

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

Revenues

 

 

 

 

 

 

 

 

 

Online game operation revenues

 

750,200,986

 

861,126,055

 

919,467,704

 

149,799,235

 

Licensing revenues

 

39,078,354

 

48,942,956

 

38,625,706

 

6,292,881

 

Other revenues

 

30,888,624

 

18,299,616

 

16,203,813

 

2,639,917

 

Total Revenues

 

820,167,964

 

928,368,627

 

974,297,223

 

158,732,033

 

Cost of revenues

 

(182,455,810

)

(249,794,628

)

(301,887,545

)

(49,183,373

)

Gross profit

 

637,712,154

 

678,573,999

 

672,409,678

 

109,548,660

 

Operating expenses

 

 

 

 

 

 

 

 

 

Research and development expenses

 

(236,006,148

)

(259,760,355

)

(280,756,233

)

(45,740,670

)

Sales and marketing expenses

 

(210,212,860

)

(197,778,058

)

(267,130,237

)

(43,520,729

)

General and administrative expenses

 

(76,378,447

)

(92,804,546

)

(117,300,930

)

(19,110,611

)

Goodwill impairment

 

 

 

(30,527,759

)

(4,973,568

)

Total operating expenses

 

(522,597,455

)

(550,342,959

)

(695,715,159

)

(113,345,578

)

Operating profit / (loss)

 

115,114,699

 

128,231,040

 

(23,305,481

)

(3,796,918

)

Other income / (expenses)

 

 

 

 

 

 

 

 

 

Share of (loss) / income from equity investments

 

(4,551,283

)

(2,667,074

)

36,246,603

 

5,905,279

 

Interest income

 

22,253,330

 

27,625,821

 

27,578,169

 

4,493,022

 

Interest expense

 

(1,029,198

)

(3,706,848

)

(4,745,531

)

(773,140

)

Others, net

 

9,976,845

 

20,874,918

 

41,572,126

 

6,772,911

 

Total other income

 

26,649,694

 

42,126,817

 

100,651,367

 

16,398,072

 

Profit before tax

 

141,764,393

 

170,357,857

 

77,345,886

 

12,601,154

 

Income tax expense

 

(14,108,543

)

(10,486,818

)

(29,074,089

)

(4,736,737

)

Income from continuing operations, net of tax

 

127,655,850

 

159,871,039

 

48,271,797

 

7,864,417

 

Loss from discontinued operations, net of tax

 

(4,702,751

)

 

 

 

Net Income

 

122,953,099

 

159,871,039

 

48,271,797

 

7,864,417

 

Net (income) / loss attributable to the non-controlling interests

 

(2,038,077

)

1,831,862

 

12,424,789

 

2,024,241

 

Net income attributable to the Company’s shareholders

 

120,915,022

 

161,702,901

 

60,696,586

 

9,888,658

 

 

 

 

 

 

 

 

 

 

 

Net earnings per ordinary share, basic

 

 

 

 

 

 

 

 

 

Continuing operations

 

0.51

 

0.65

 

0.24

 

0.04

 

Discontinued operations

 

(0.02

)

 

 

 

Total earnings per ordinary share, basic

 

0.49

 

0.65

 

0.24

 

0.04

 

 

 

 

 

 

 

 

 

 

 

Net earnings per ordinary share, diluted

 

 

 

 

 

 

 

 

 

Continuing operations

 

0.50

 

0.64

 

0.24

 

0.04

 

Discontinued operations

 

(0.02

)

 

 

 

Total earnings per ordinary share, diluted

 

0.48

 

0.64

 

0.24

 

0.04

 

 

 

 

 

 

 

 

 

 

 

Net earnings per ADS, basic

 

 

 

 

 

 

 

 

 

Continuing operations

 

2.57

 

3.26

 

1.22

 

0.20

 

Discontinued operations

 

(0.10

)

 

 

 

Total earnings per ADS, basic

 

2.47

 

3.26

 

1.22

 

0.20

 

 

 

 

 

 

 

 

 

 

 

Net earnings per ADS, diluted

 

 

 

 

 

 

 

 

 

Continuing operations

 

2.50

 

3.21

 

1.20

 

0.19

 

Discontinued operations

 

(0.09

)

 

 

 

Total earnings per ADS, diluted

 

2.41

 

3.21

 

1.20

 

0.19

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculating basic net earnings per ordinary share

 

244,382,546

 

247,753,275

 

248,194,498

 

248,194,498

 

Shares used in calculating diluted net earnings per ordinary share

 

251,156,777

 

252,119,378

 

253,798,761

 

253,798,761

 

 

 

 

 

 

 

 

 

 

 

Amount attributable to the Company’s shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

125,617,773

 

161,702,901

 

60,696,586

 

9,888,658

 

Loss from discontinued operations, net of tax

 

(4,702,751

)

 

 

 

Net income

 

120,915,022

 

161,702,901

 

60,696,586

 

9,888,658

 

 

 

 

 

 

 

 

 

 

 

Total share-based compensation cost included in:

 

 

 

 

 

 

 

 

 

Cost of revenues

 

(836,815

)

(245,065

)

(244,629

)

(39,855

)

Research and development expenses

 

(9,289,947

)

(3,455,256

)

(3,435,598

)

(559,726

)

Sales and marketing expenses

 

(3,270,968

)

(1,810,495

)

(1,778,802

)

(289,802

)

General and administrative expenses

 

(7,167,748

)

(4,665,292

)

(4,674,896

)

(761,632

)

 



 

Perfect World Co., Ltd.

Reconciliation of GAAP and Non-GAAP Results

 

 

 

Three months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

 

 

2013

 

2014

 

2014

 

2014

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

 

 

 

 

 

 

 

 

 

 

GAAP operating profit / (loss)

 

115,114,699

 

128,231,040

 

(23,305,481

)

(3,796,918

)

Share based compensation charge

 

20,565,478

 

10,176,108

 

10,133,925

 

1,651,015

 

Impairment of intangibles via acquisitions of businesses and related tax impact

 

 

 

25,087,354

 

4,087,220

 

Goodwill impairment

 

 

 

30,527,759

 

4,973,568

 

Non-GAAP operating profit

 

135,680,177

 

138,407,148

 

42,443,557

 

6,914,885

 

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to the Company’s shareholders

 

120,915,022

 

161,702,901

 

60,696,586

 

9,888,658

 

Share based compensation charge

 

20,565,478

 

10,176,108

 

10,133,925

 

1,651,015

 

Impairment of intangibles via acquisitions of businesses and related tax impact

 

 

 

25,087,354

 

4,087,220

 

Goodwill impairment

 

 

 

30,527,759

 

4,973,568

 

Non-GAAP net income attributable to the Company’s shareholders

 

141,480,500

 

171,879,009

 

126,445,624

 

20,600,461

 

 

 

 

 

 

 

 

 

 

 

GAAP net earnings per ADS

 

 

 

 

 

 

 

 

 

- Basic

 

2.47

 

3.26

 

1.22

 

0.20

 

- Diluted

 

2.41

 

3.21

 

1.20

 

0.19

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net earnings per ADS

 

 

 

 

 

 

 

 

 

- Basic

 

2.89

 

3.47

 

2.55

 

0.42

 

- Diluted

 

2.82

 

3.41

 

2.49

 

0.41

 

 

 

 

 

 

 

 

 

 

 

ADSs used in calculating net earnings per ADS

 

 

 

 

 

 

 

 

 

- Basic

 

48,876,509

 

49,550,655

 

49,638,900

 

49,638,900

 

- Diluted

 

50,231,355

 

50,423,876

 

50,759,752

 

50,759,752