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Tian Ge Announces 2015 First Quarter ResultsHONG KONG, May 25, 2015 /PRNewswire/ -- Tian Ge Interactive Holdings Limited ("Tian Ge" or the "Group", 1980.HK, TGRVY.US), the largest "many-to-many" live social communities platform in China, today announced the unaudited consolidated results for the three months ended March 31, 2015. Financial Highlights of the First Quarter of 2015
Mr. Mike Fu, Chairman and CEO of Tian Ge, commented, "The first quarter signals an exciting start for 2015 highlighted by strong growth of our mobile game business and in mobile paying users. We also recently completed several investments and entered into new business, expanding our live social video platform communities and realizing our vertical integration strategy. We believe the significant performance achieved in the first quarter provide a solid foundation for us to achieve consistent financial performance and to sustain strong growth in active and paying mobile users." Business Review In the first quarter of 2015, we continued to make healthy progress in expanding and developing our overall business. Our MAU and QPU for the live social platforms in the first quarter of 2015 grew at 34.9% and 24.2% YoY, while game platform MAU continue to grow at a triple digit growth rate. Moreover, our mobile monthly active users ("MAU") in the first quarter of 2015 increased to 14.8% from 8.0% compared to the corresponding period of 2014. The following table sets forth certain operating statistics relating to the company's Internet platforms and value-added services as of the dates and for the periods presented below:
The following is a summary of the comparative figures for the periods presented above:
Financial Review Revenues Revenue increased by 8.1% year-on-year to RMB185.5 million for the three months ended March 31, 2015 from the corresponding period in 2014, and by 6.1% quarter-on-quarter from the three months ended December 31, 2014, driven by the success of our mobile games. Excluding the VAT effect, our revenue for the three months ended March 31, 2015 increased approximately 14.1% year-on-year compared to the corresponding period of 2014 as our revenues are recorded as net off 6% VAT tax after June 1, 2014. Gross Profit Gross profit increased by 8.4% to RMB156.5 million for the three months ended March 31, 2015 from RMB144.3 million in the corresponding period of 2014, with a slight increase in gross margin to 84.3% from 84.1%. Selling & Marketing Expenses Selling and marketing expenses decreased by 2.3% year-on-year and 13.2% quarter-on-quarter to RMB48.9 million for the three months ended March 31, 2015 from the corresponding period in 2014 and the three months ended December 31, 2014, respectively, which mainly due to the adoption of our cost control policy in 2015. Administrative Expenses Administrative expense increased by 12.5% year-on-year to RMB 27.5 million for the three months ended March 31, 2015 from RMB24.4 million in the corresponding period in 2014, which is primarily due to an increase in share-based compensation of RMB14.6 million. The increase is partially offset by the decrease of professional and consultancy fees of RMB8.3 million and business tax and related surcharges of RMB4.6 million benefiting from the VAT reform effective from June 1, 2014. Research & Development Expenses Research and development expenses increase by 35.7% year-on-year to RMB20.5 million for the three months ended March 31, 2015 from RMB15.1 million in the corresponding period in 2014, primarily due to the increase in employee benefits and new research and development investment in mobile games. Other Gains Other gains increased by 154.6% year-on-year to RMB15.3 million for the three months ended March 31, 2015 from RMB6.0 million for the corresponding period in 2014 which mainly caused by the increase of interest income and fair value gains of RMB8.6 million and RMB0.9 million respectively from the structured deposits. Impact of Convertible Redeemable Preferred Shares Upon completion of the global offering of the Company on July 9, 2014, the convertible redeemable preferred shares were automatically converted into ordinary shares on a one-to-one basis and there is no fair value gain or loss associated with these shares to be recognized in periods afterwards. Adjusted EBITDA Adjusted EBITDA increased by 26.0% year-on-year to RMB96.7 million for the three months ended March 31, 2015 from the corresponding period of 2014. Adjusted EBITDA margin was 52.1% for the three months ended March 31, 2015, compared to 44.7% for the corresponding period of 2014. Adjusted EBITDA represents operating profit adjusted to exclude non-cash share-based compensation expenses, listing expenses, depreciation and amortization. Adjusted Net Income and Earnings Per Share Adjusted net profit increased by 19.1% to RMB75.1 million for the three months ended March 31, 2015 from RMB63.1 million for the corresponding period of 2014. Adjusted diluted earnings per share is RMB0.056 for the three months ended March 31, 2015. 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 As of March 31, 2015, the Company had cash and cash equivalents, term deposits with initial terms over 3 months, principal-protected structured deposits (recorded under current available-for-sale financial assets and current financial assets at fair value through profit or loss) in the aggregate amount of RMB1,666.5 million. The Company adopts conservative treasure policies in cash and financial management, and does not use any financial instruments for hedging purposes. All bank borrowings had been repaid before March 31, 2015. Capital Expenditures For the three months ended March 31, 2015, our capital expenditures were approximately RMB32.0 million, mainly related to the purchase of our new office space located in Beijing, renovation expenses, office supplies, and purchase of other network equipment. The aforementioned new office purchase transferred to our fixed assets in February 2015 with total amount of approximately RMB46.2 million. Other Events
Conference Call Information The Company will host a conference call at 9:30 p.m. ET on May 25, 2015 (9:30 a.m. Beijing Time on May 26, 2015) to review the Company's financial results and answer questions. You may access the live interactive call via:
Please dial-in approximately 5 minutes in advance to facilitate a timely start.
A live and archived webcast of the call will be available on the Company's website at http://www.tiange.com/enInvestor/Index.aspx About Tian Ge Tian Ge (1980.HK) is one of the largest live social online video community platforms in China. The Company was founded in Hangzhou, China in 2008 and went public on the main board of the stock exchange of Hong Kong in July 2014. It currently operate eight "many-to-many" live social video communities on both mobile and PC, including 9158 and Sina Show, the two largest communities; and one "one-to-many" community, Sina Showcase. Our communities offer diverse selection of user-generated content in the live social online video community industry. Through our "many-to-many" ecosystem where multiple users can simultaneously stream to other viewers in the same real-time video room, Tian Ge enables users to interact, socialize, share interest, send virtual items & gifts, and encourages our users to showcase their talents or knowledge for open and public exposure. Recently, we expanded our ecosystem to the online-to-offline (O2O) karaoke, live social games and emerging healthcare mobile applications. For more information, please visit www.tiange.com To visit our communities: 9158: www.9158.com; Sina Show: http://show.sina.com.cn/; Sina Showcase: http://ok.sina.com.cn/ For media inquiries, please feel free to contact: LBS Communications Consulting Limited Joanne Chan (852-9616 2676), Janice Liu (852-9859 0513), Ian Fok (852-9348 4484) For investor inquiries, please contact: Kenneth Ke 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.
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