___________________
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 August 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 — Second
Quarter Fiscal 2010 Results Dated August 9, 2010
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4
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Exhibit
99.2 — 2010
Second Quarter Results Presentation Dated August 9, 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:
August 9, 2010
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3
Exhibit 99.1
GIANT
INTERACTIVE ANNOUNCES
SECOND
QUARTER FISCAL 2010 RESULTS
SHANGHAI, PRC — August 9, 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 second fiscal quarter ended June 30,
2010.
Second
Quarter 2010 Highlights:
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Ÿ
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Net
revenue was RMB321.7 million (US$47.4 million), compared to RMB304.4
million in the first quarter 2010 and RMB364.1 million in the second
quarter 2009.
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Ÿ
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Gross
profit was RMB274.8 million (US$40.5 million), compared to
RMB259.3 million in the first quarter 2010 and RMB309.5 million in
the second quarter 2009. Gross profit margin for the second
quarter 2010 was 85.4%.
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Ÿ
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Net
income attributable to the Company’s shareholders was
RMB186.0 million (US$27.4 million), compared to RMB185.2
million in the first quarter 2010 and RMB231.9 million in the second
quarter 2009. The margin of net income attributable to the Company’s
shareholders for the second quarter 2010
was 57.8%.
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Ÿ
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Basic
and diluted earnings per American Depositary Share (“ADS”) were
RMB0.82 (US$0.12) and RMB0.79 (US$0.12), respectively, compared
to basic and diluted earnings per ADS of RMB0.82 and RMB0.79,
respectively, for the first quarter 2010, and basic and diluted earnings
per ADS of RMB1.03 and RMB0.99, respectively, for the second quarter
2009. Each ADS represents one ordinary
share.
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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 RMB193.1 million (US$28.5 million),
compared to RMB189.7 million in the first quarter 2010 and
RMB239.8 million in the second quarter 2009. The margin of
non-GAAP net income attributable to the Company’s shareholders excluding
non-cash share-based compensation was
60.0%.
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Ÿ
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Basic
and diluted non-GAAP earnings excluding non-cash share-based compensation
per ADS were RMB0.85 (US$0.13) and RMB0.82 (US$0.12),
respectively, compared to basic and diluted non-GAAP earnings per ADS of
RMB0.84 and RMB0.81, respectively, for the first quarter 2010, and
basic and diluted non-GAAP earnings per ADS of RMB1.06 and RMB1.03,
respectively, for the second quarter
2009.
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Ÿ
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Active Paying Accounts (“APA”)
for online games was 1,435,000, an increase of 4.5% from the first quarter
2010 and an increase of 19.2% from the second quarter
2009.
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Ÿ
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Average Revenue Per User (“ARPU”)
for online games was RMB223.0, an increase of 1.4% from the first quarter 2010 and
a decrease of 25.7% from the second quarter
2009.
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Ÿ
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Average Concurrent Users (“ACU”)
for online games was 670,000, an increase of 13.9% from the first quarter 2010 and
an increase of 48.0% from the second quarter
2009.
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Ÿ
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Peak Concurrent Users (“PCU”) for
online games was 1,657,000, an increase of 2.8% from the first quarter 2010 and
an increase of 15.0% from the second quarter
2009.
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4
Mr. Yuzhu
Shi, Giant’s Chairman and Chief Executive Officer commented, “We are pleased to
report consecutive quarters of sequential top-line growth, as players continue
to respond positively to our ZT Online segmentation
strategy and portfolio diversification initiative. Looking at our key
operating metrics, we are encouraged by the ongoing expansion of our overall
player base. The 19.2% year-over-year rise in APA demonstrates that
we are successfully attracting a broader range of players across various
spending habits and fostering a healthier, more sustainable revenue
base.”
“Much of
our recent strategy centers on keeping players engaged by providing ongoing content and feature
upgrades. New expansion packs and enhancements within our ZT Online series are
successfully meeting the evolving preferences of online gamers in China, and
adjustments made to our pipeline games based on user feedback will help increase
the potential for success of future commercial launches. During the second
quarter, we launched marketing campaigns to promote our new games King of Kings III and XT Online, which diversified
our product portfolio and attracted different types of players, meeting our
initial expectations.”
“We have
made sound progress in recent quarters and I believe we are well poised to
continue on this trajectory going forward. We expect continued
top-line growth in the third quarter 2010 as our current games gain further
traction among their respective target audiences, with additional support from
our pipeline games following their commercial launches in the coming
quarters.”
Second
Quarter Fiscal 2010 Unaudited Financial Results
Net
Revenue. Net revenue for the second quarter 2010 was RMB321.7
million (US$47.4 million), representing a 5.7% increase from RMB304.4 million in
the first quarter 2010 and an 11.7% decrease from RMB364.1 million in the second
quarter 2009.
Revenue
from online games in the second quarter totaled RMB313.8 million (US$46.3
million), representing an increase of 6.4% from RMB294.8 million in the first
quarter 2010 and a 13.1% decrease from RMB361.2 million in the second quarter
2009. Online game net revenue increased sequentially primarily due to
the continuing recovery of ZT
Online, as well as the contribution of recently launched games such as
King of Kings III and
XT
Online. The year-over-year quarterly decrease was due to the
cancellation of select in-game monetization features during the third
quarter 2009.
ACU for
online games in the second quarter 2010 was 670,000, representing a 13.9%
sequential increase and a 48.0% increase over the second quarter
2009. PCU for online games in the second quarter 2010 was 1,657,000,
representing a 2.8% sequential increase and a 15.0% increase over the second
quarter 2009. ACU and PCU were up on a sequential basis due to the
increase in user base for ZT
Online and various new games. ARPU for online games in the
second quarter 2010 increased 1.4% sequentially and decreased 25.7%
year-over-year quarterly to RMB223.0. ARPU increased slightly on a
sequential basis, but remained at lower than historic levels as Giant’s new
games target various audiences with a broader range of spending
habits. APA for online games in the second quarter 2010 increased
4.5% sequentially and increased 19.2% from the second quarter 2009 to
1,435,000. The sequential and year-over-year increases in APA are
attributable to the growth in users subscribing for paying accounts within the
Company’s flagship ZT
Online and newly launched games.
5
Cost of
Services. Cost of services was RMB46.9 million (US$6.9
million), representing an increase of 3.9% from the first quarter 2010 and a
14.0% decrease from the second quarter 2009. The sequential increase
of cost of services was mainly due to the amortization of the intangible asset
of King of Kings III
upon its open beta launch in the second quarter 2010.
Gross Profit and
Gross Margin. Gross profit for the second quarter 2010 was
RMB274.8 million (US$40.5 million), representing a 6.0% sequential increase and
an 11.2% year-over-year quarterly decrease. Gross margin for the
second quarter 2010 was 85.4%, essentially flat compared to 85.2% in the first
quarter 2010 and 85.0% in the second quarter 2009.
Operating
Expenses. Total operating expenses for the second quarter 2010 were
RMB94.2 million (US$13.9 million), representing an increase of 16.6% from
RMB80.8 million in the first quarter 2010 and a rise of 25.5% from RMB75.1
million in the second quarter 2009. The sequential increase in
operating expenses is mainly attributable to the increase in marketing
activities for the promotion of new games.
Research
and product development (“R&D”) expenses for the second quarter 2010
decreased 1.8% sequentially to RMB33.1 million (US$4.9 million) from RMB33.7
million in the first quarter 2010 and increased 14.2% year-over-year quarterly
from RMB29.0 million in the second quarter 2009. The R&D expenses
remain stable sequentially while the year-over-year increase was mainly due to
the recruitment of additional R&D talents for the development of new game
projects.
Sales and
marketing (“S&M”) expenses were RMB45.4 million (US$6.7 million) in the
second quarter 2010, up 53.3% sequentially from RMB29.6 million as the Company
launched marketing campaigns for King of Kings III and XT Online during the second
quarter 2010. S&M expenses were up 87.9% year-over-year from
RMB24.2 million as Giant had limited its market activities last year.
General
and administrative expenses (“G&A”) for the second quarter 2010 were RMB25.7
million (US$3.8 million), up 1.0% from RMB25.5 million in the first quarter
2010, and down 19.5% from RMB31.9 million in the second quarter
2009. The sequential increase was mainly caused by a one-time
consulting fee related to human resources purposes and additional compensation
expenses recognized for the new grant of restricted shares. The
year-over-year quarterly decrease in G&A expenses was mainly attributable to
management’s strict control over expenses.
Financial
Incentive. The financial incentive, which mainly relates to
sales tax received from the municipal government, was RMB10.0 million (US$1.5
million) in the second quarter 2010, a sequential increase of approximately
RMB2.0 million (US$0.3 million). 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.
6
Interest
Income. Interest income for the second quarter 2010 was
RMB30.5 million (US$4.5 million), compared to RMB31.2 million in the first
quarter 2010 and RMB23.0 million in the second quarter 2009.
Income
Tax. Income tax expense for the second quarter 2010 was
RMB20.0 million (US$3.0 million), compared to income tax expense of RMB21.6
million in the first quarter 2010 and income tax expense of RMB25.9 million
in the second quarter 2009.
Net Income
Attributable to the Company’s Shareholders. Net income
attributable to the Company’s shareholders for the second quarter 2010 was
RMB186.0 million (US$27.4 million), an increase of 0.4% from RMB185.2 million in
the first quarter 2010 and a year-over-year decrease of 19.8% from RMB231.9
million. Net income attributable to the Company’s shareholders increased
sequentially as a result of the increase in online game revenue. The
margin of net income attributable to the Company’s shareholders was 57.8% for
the second quarter 2010, compared to 60.9% in the first quarter 2010 and 63.7%
in the first quarter 2009.
Cash, Cash
Equivalents, Short-Term Investments and Held-To-Maturity
Investments. As of June 30, 2010, Giant’s cash, cash
equivalents, short-term investments and held-to-maturity securities totaled
RMB5,496.9 million (US$810.6 million), compared to RMB5,540.1 million as of
March 31, 2010. The sequential decrease was due to the cash payout of
approximately US$40.9 million in dividend payments to shareholders during the
second quarter 2010, which offset the increase in cash generated by the
Company’s operating business during the same quarter.
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. To date, the Company did not
repurchase any shares under the plan, which would expire on August 30, 2010. In
August, 2010, the Board of Directors decided to extend the term of
the plan 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.
Business
Highlights and Outlook
ZT Online
Series— The
Company released new features for the original ZT Online, which attracted
former players back to the game. These features include an intense PK
competition mode for players of similar levels, elaborate armors, and other
enhancements and innovative gameplay. An embedded interactive voice
system was added to ZT Online
Classic Edition to permit instant voice communication between players
within the game. On July 31, 2010, Giant launched ZT Online Green Edition’s
first expansion pack, which features new ways to capture and raise pets and
animals for transportation and battle, as well as user-generated
skills-enhancing systems.
Giant
Online— During the second quarter 2010,
Giant
Online celebrated its
two-year anniversary with the release of various holiday
promotions. The next expansion pack is expected to be released at the
end of August 2010 and revolves around battles in space. Giant
Online will be licensed to
Taiwan and is currently under localization and tailoring to that
market. It is expected to be released toward the end of September
2010.
7
King of Kings III
— Since the
launch of the open beta testing in April 2010, King of Kings III has
generated substantial interest with a growing base of loyal
players. At the end of July 2010, the Company launched the first
expansion pack for King of
Kings III, which includes new maps for Dragon Island, raising baby
dragons, dragon ball collecting, flying abilities during battles in sky, and a
marriage system.
ZT Online
2— The upcoming
sequel to the Company’s flagship game features brand new 2D graphics with vivid
background and artwork, enriched gameplay, embedded casual farming experiences,
magical pet raising system, and a more balanced in-game
economy. During the second quarter 2010, the Company conducted a
second small-scale engineering testing with over 2,000 participants, and is
currently enhancing the game based on feedback from gamers. ZT Online 2 is expected to
begin limited closed beta testing during the fourth quarter 2010.
XT
Online— The
Company launched closed beta testing for XT Online in May 2010 and is
expecting to release a revised version of the game in August 2010 featuring new
instance dungeons, playing modes, and other updates based on feedback from
gamers. Currently, the Company plans to begin open beta testing
around the fourth quarter 2010.
Dragon
Soul— Dragon Soul is a 3D ancient
Chinese PK MMORPG developed by the Company’s internal R&D team based in
Chengdu, Sichuan. During the second quarter 2010, the Company made
additional enhancements to the game based on feedback collected during the
limited close beta testing phase in the first quarter
2010. Additional features include customizable farms for players to
find respite from its intensified PK mode. Dragon Soul is expected to
begin close beta testing during the third quarter 2010.
The Golden
Land— An updated
version of Golden Land,
which features an improved Player versus Environment “PvE” system, was
released in April 2010 and has been well received by players. During
the second quarter 2010, the Company started to jointly operate Golden Land with various
domestic internet portals, bringing additional traffic to the
game. Golden Land
has been exported to Taiwan and has quickly become one of the top
webgames in Taiwan. The Company recently signed license agreements to
export the game to Brazil, Turkey and Japan.
Elsword —
Elsword is a 3D
side-scrolling, advanced casual game developed by KOG of South Korea Co., Ltd.
(“KOG”). The game has proven popular in South Korea, Japan, and
Taiwan, and the Company signed an exclusive agreement with KOG to operate Elsword in mainland
China. The game is currently under further localization
and expected to begin engineering testing in the fourth quarter
2010.
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 began localizing and tailoring the game to Chinese gamers’ preferences
in the second quarter 2010, and expects to begin limited engineering testing
towards the end of 2010.
Third Quarter
2010 Guidance—For the third 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 third quarter
2010.
8
Conference
Call
Giant’s
senior management will host a conference call on August 9, 2010 at 9:00 pm (US
Eastern Time) / 6:00 pm (US Pacific Time), which is August 10, 2010 at 9:00
am (Beijing Time) to discuss its 2010 second quarter financial results and
recent business activity. The conference call may be accessed by calling +1
866 356 3093 (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
617 597 5381 (for callers outside of the US and China) and entering
passcode 42213654. Please dial in approximately 10 minutes before the
scheduled time of the call.
A
recording of the conference call will be available starting 12:00 am (US Eastern
Time) on August 10, 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
56233363.
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 RMB6.7815, which was the noon buying rate as of
June 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.
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.
9
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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||||||||||||||||
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June
30,
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March
31,
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June
30,
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June
30,
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|||||||||||||
|
2009
|
2010
|
2010
|
2010
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|||||||||||||
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(RMB)
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(RMB)
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(RMB)
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(US$)
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|||||||||||||
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GAAP
net income attributable to the Company’s shareholders:
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231,900,507 | 185,249,203 | 186,022,043 | 27,430,811 | ||||||||||||
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Share-based
compensation
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7,896,476 | 4,437,390 | 7,054,023 | 1,040,186 | ||||||||||||
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Non-GAAP
net income attributable to the Company’s shareholders:
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239,796,983 | 189,686,593 | 193,076,066 | 28,470,997 | ||||||||||||
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Non-GAAP
earnings per share:
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Basic
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1.06 | 0.84 | 0.85 | 0.13 | ||||||||||||
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Diluted
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1.03 | 0.81 | 0.82 | 0.12 | ||||||||||||
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Weighted
average ordinary shares:
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||||||||||||||||
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Basic
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225,962,544 | 226,905,943 | 227,233,796 | 227,233,796 | ||||||||||||
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Diluted
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233,923,536 | 234,423,481 | 234,089,527 | 234,089,527 | ||||||||||||
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, and My Sweetie. Giant
has several additional online games that it intends to launch, including ZT Online 2, Dragon Soul, 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 June 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.
10
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 third quarter of 2010, the ability
of ZT Online series to
attract players and extend its life cycle with the enhancement introduced in the
second 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 second 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.
11
|
Contacts:
|
|
|
Investor
Contact (Shanghai):
Rich
Chiang, IR Manager
Giant
Interactive Group, Inc.
+86
21 6451 1258
ir@ztgame.com
|
Investor
Relations (US):
Mahmoud
Siddig, Director
Taylor
Rafferty
+1
(212) 889 4350
giantinteractive@taylor-rafferty.com
|
|
Investor
Relations (HK):
Ruby
Yim, Managing Director
Taylor
Rafferty
+852
3196 3712
giantinteractive@taylor-rafferty.com
|
Media
Contact (US):
Jason
Marshall
Taylor
Rafferty
+1
(212) 889 4350
giantinteractive@taylor-rafferty.com
|
12
GIANT
INTERACTIVE GROUP, INC.
CONSOLIDATED
BALANCE SHEETS
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
|
June
30,
|
March
31,
|
June
30,
|
June
30,
|
|||||||||||||
|
2009
|
2010
|
2010
|
2010
|
|||||||||||||
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ASSETS
|
(RMB)
|
(RMB)
|
(RMB)
|
(US$)
|
||||||||||||
|
Current
assets:
|
||||||||||||||||
|
Cash
and cash equivalents
|
2,256,439,481 | 1,258,511,595 | 2,673,694,945 | 394,263,061 | ||||||||||||
|
Prepayments
and other current assets
|
50,845,363 | 135,318,573 | 103,485,163 | 15,259,922 | ||||||||||||
|
Accounts
receivable
|
1,257,511 | 8,503,479 | 16,275,111 | 2,399,928 | ||||||||||||
|
Due
from a related party
|
- | 3,592 | 3,572 | 527 | ||||||||||||
|
Inventories
|
832,660 | 531,462 | 353,439 | 52,118 | ||||||||||||
|
Deferred
tax assets
|
70,227,540 | 72,690,876 | 76,447,887 | 11,273,005 | ||||||||||||
|
Short-term
investments
|
2,777,975,000 | 3,781,575,000 | 2,323,180,000 | 342,576,126 | ||||||||||||
|
Available-for-sale
securities
|
35,978,013 | - | - | - | ||||||||||||
|
Total
current assets
|
5,193,555,568 | 5,257,134,577 | 5,193,440,117 | 765,824,687 | ||||||||||||
|
Non-current
assets:
|
||||||||||||||||
|
Property
and equipment, net
|
200,573,072 | 162,035,634 | 149,935,585 | 22,109,502 | ||||||||||||
|
Intangible
assets, net
|
110,406,132 | 120,244,401 | 116,565,240 | 17,188,710 | ||||||||||||
|
Due
from R&D entity partners
|
- | 11,880,000 | 13,185,600 | 1,944,349 | ||||||||||||
|
Goodwill
|
6,224,587 | 6,224,587 | 6,224,587 | 917,878 | ||||||||||||
|
Investment
in an equity investee
|
- | 2,915,756 | 2,787,260 | 411,009 | ||||||||||||
|
Available-for-sale
securities
|
444,341,125 | 441,717,532 | 427,248,585 | 63,002,077 | ||||||||||||
|
Held-to-maturity
securities
|
- | 500,000,000 | 500,000,000 | 73,730,001 | ||||||||||||
|
Deferred
tax assets
|
7,942,688 | 11,440,026 | 11,686,618 | 1,723,309 | ||||||||||||
|
Other
assets
|
85,100,135 | 84,225,245 | 102,711,524 | 15,145,841 | ||||||||||||
|
Total
non-current assets
|
854,587,739 | 1,340,683,181 | 1,330,344,999 | 196,172,676 | ||||||||||||
|
Total
assets
|
6,048,143,307 | 6,597,817,758 | 6,523,785,116 | 961,997,363 | ||||||||||||
|
LIABILITIES
AND SHAREHOLDERS’EQUITY
|
||||||||||||||||
|
Current
liabilities:
|
||||||||||||||||
|
Payables
and accrued expenses
|
112,112,791 | 82,969,129 | 103,541,179 | 15,268,183 | ||||||||||||
|
Advances
from distributors
|
63,696,908 | 65,535,828 | 53,588,141 | 7,902,107 | ||||||||||||
|
Deferred
revenue
|
345,580,565 | 337,988,705 | 352,121,774 | 51,923,877 | ||||||||||||
|
Unrecognized
tax benefit
|
8,761,075 | 10,910,241 | 11,838,570 | 1,745,716 | ||||||||||||
|
Dividend
payable
|
- | - | - | - | ||||||||||||
|
Tax
payable
|
3,089,732 | 1,929,077 | 9,795,947 | 1,444,510 | ||||||||||||
|
Deferred
tax liabilities
|
300,367 | 763,138 | 1,401,752 | 206,702 | ||||||||||||
|
Total
current liabilities
|
533,541,438 | 500,096,118 | 532,287,363 | 78,491,095 | ||||||||||||
|
Non-current
liabilities:
|
||||||||||||||||
|
Deferred
tax liabilities
|
- | 362,334 | 303,722 | 44,787 | ||||||||||||
|
Total
non-current liabilities
|
- | 362,334 | 303,722 | 44,787 | ||||||||||||
|
Total
liabilities
|
533,541,438 | 500,458,452 | 532,591,085 | 78,535,882 | ||||||||||||
|
Shareholders’
equity
|
||||||||||||||||
|
Ordinary
shares
|
417 | 417 | 417 | 61 | ||||||||||||
|
(par
value US$0.0000002 per share;
|
||||||||||||||||
|
500,000,000
shares authorized as at June 30, 2009, March 31, 2010 and June
30, 2010 respectively; 263,110,626 shares issued and
226,441,541 shares outstanding at June 30, 2009, 263,110,626
shares issued and 227,071,403 shares outstanding at March 31,
2010, 263,110,626 shares issued and 227,348,625 shares
outstanding at June 30, 2010)
|
||||||||||||||||
|
Additional
paid-in capital
|
6,016,036,431 | 6,044,070,848 | 6,054,941,806 | 892,861,728 | ||||||||||||
|
Statutory
reserves
|
43,890,273 | 43,890,273 | 43,890,273 | 6,472,060 | ||||||||||||
|
Accumulated
other comprehensive loss
|
(182,407,839 | ) | (222,632,263 | ) | (247,350,587 | ) | (36,474,318 | ) | ||||||||
|
Retained
earnings
|
1,811,144,784 | 2,391,915,665 | 2,298,814,714 | 338,983,221 | ||||||||||||
|
Treasury
stock
|
(2,176,792,033 | ) | (2,176,792,033 | ) | (2,176,792,033 | ) | (320,989,756 | ) | ||||||||
|
Total
shareholders’ equity
|
5,511,872,033 | 6,080,452,907 | 5,973,504,590 | 880,852,996 | ||||||||||||
|
Non
controlling interest
|
2,729,836 | 16,906,399 | 17,689,441 | 2,608,485 | ||||||||||||
|
Total equity
|
5,514,601,869 | 6,097,359,306 | 5,991,194,031 | 883,461,481 | ||||||||||||
|
Total
liabilities and equity
|
6,048,143,307 | 6,597,817,758 | 6,523,785,116 | 961,997,363 | ||||||||||||
13
GIANT
INTERACTIVE GROUP, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
Three
months ended
|
||||||||||||||||
|
30-June
|
31-Mar
|
30-June
|
30-June
|
|||||||||||||
|
2009
|
2010
|
2010
|
2010
|
|||||||||||||
|
(RMB)
|
(RMB)
|
(RMB)
|
(US$)
|
|||||||||||||
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
|
Net
revenue:
|
||||||||||||||||
|
Online
game
|
361,187,903 | 294,785,770 | 313,794,352 | 46,272,116 | ||||||||||||
|
Licensing
revenue
|
2,886,593 | 9,454,605 | 7,551,922 | 1,113,606 | ||||||||||||
|
Other
revenue, net
|
15,108 | 169,342 | 306,533 | 45,201 | ||||||||||||
|
Total
net revenue
|
364,089,604 | 304,409,717 | 321,652,807 | 47,430,923 | ||||||||||||
|
Cost
of services
|
(54,542,858 | ) | (45,140,545 | ) | (46,886,113 | ) | (6,913,826 | ) | ||||||||
|
Gross
profit
|
309,546,746 | 259,269,172 | 274,766,694 | 40,517,097 | ||||||||||||
|
Operating (expenses)
income:
|
||||||||||||||||
|
Research
and product development expenses
|
(29,000,215 | ) | (33,732,484 | ) | (33,125,895 | ) | (4,884,745 | ) | ||||||||
|
Sales
and marketing expenses
|
(24,154,678 | ) | (29,606,702 | ) | (45,393,654 | ) | (6,693,748 | ) | ||||||||
|
General
and administrative expenses
|
(31,943,066 | ) | (25,476,209 | ) | (25,729,485 | ) | (3,794,070 | ) | ||||||||
|
Government
financial incentives
|
10,000,000 | 8,000,000 | 10,000,000 | 1,474,600 | ||||||||||||
|
Total
operating expenses
|
(75,097,959 | ) | (80,815,395 | ) | (94,249,034 | ) | (13,897,963 | ) | ||||||||
|
Income
from operations
|
234,448,787 | 178,453,777 | 180,517,660 | 26,619,134 | ||||||||||||
|
Interest
income
|
22,960,827 | 31,247,683 | 30,454,426 | 4,490,810 | ||||||||||||
|
Other income
(expense), net
|
343,347 | (3,504,035 | ) | (6,227,159 | ) | (918,257 | ) | |||||||||
|
Income
before income tax expenses, and share of loss of an equity
investee
|
257,752,961 | 206,197,425 | 204,744,927 | 30,191,687 | ||||||||||||
|
Income
tax expense
|
(25,880,718 | ) | (21,632,185 | ) | (20,041,347 | ) | (2,955,297 | ) | ||||||||
|
Share
of loss of an equity investee
|
- | (84,244 | ) | (128,496 | ) | (18,948 | ) | |||||||||
|
Net
income
|
231,872,243 | 184,480,996 | 184,575,084 | 27,217,442 | ||||||||||||
|
Net
loss attributable to non controlling interest
|
28,264 | 768,207 | 1,446,959 | 213,369 | ||||||||||||
|
Net
income attributable to the Company’s shareholders
|
231,900,507 | 185,249,203 | 186,022,043 | 27,430,811 | ||||||||||||
|
Other
comprehensive loss, net of tax
|
||||||||||||||||
|
Foreign
currency translation
|
(1,593,290 | ) | (738,249 | ) | (12,480,121 | ) | (1,840,319 | ) | ||||||||
|
Unrealized
holding loss
|
(14,808,606 | ) | (9,123,885 | ) | (12,238,203 | ) | (1,804,645 | ) | ||||||||
|
Total
other comprehensive loss, net of tax
|
(16,401,896 | ) | (9,862,134 | ) | (24,718,324 | ) | (3,644,964 | ) | ||||||||
|
Comprehensive
income
|
215,498,611 | 175,387,069 | 161,303,719 | 23,785,847 | ||||||||||||
|
Earnings
per share:
|
||||||||||||||||
|
Basic
|
1.03 | 0.82 | 0.82 | 0.12 | ||||||||||||
|
Diluted
|
0.99 | 0.79 | 0.79 | 0.12 | ||||||||||||
|
Weighted
average ordinary shares:
|
||||||||||||||||
|
Basic
|
225,962,544 | 226,905,943 | 227,233,796 | 227,233,796 | ||||||||||||
|
Diluted
|
233,923,536 | 234,423,481 | 234,089,527 | 234,089,527 | ||||||||||||
14
Exhibit 99.2
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32