Forgame Announces First Annual Results After Successful Listing, Total Revenue & Gross Profit Up 52.3% & 43.6% Respectively

Publish Date:2014-03-25 source:Forgame

Financial Highlights  For the year ended 31 December
(RMB million) 2013 2012 Change
Total Revenue 1,183.1 776.6 + 52.3%
- Game development 799.4 540.7 + 47.8%
- Game publishing 383.7 235.9 + 62.6%
Gross Profit 1,001.9 697.6 + 43.6%
Operating Profit 329.2 283.6 + 16.1%
Adjusted Net Profit* (unaudited) 325.2 240.0 + 35.5%
* Forgame defines net profit as adjusted (loss)/profit for the year excluding share-based compensation, fair value change of preferred shares and finance costs relating to the issuance of preferred shares.
(Hong Kong, 25 March 2014) – Forgame Holdings Limited (“Forgame” or the “Group”) (stock code: 484), a leading developer and publisher of webgames in China, is pleased to announce its first annual results after its successful listing on the Main Board of the Hong Kong Stock Exchange on 3 October 2013. With greater revenue generated from mobile games and the new webgames launched during the year, the Group achieved an encouraging performance results for the financial year ended 31 December 2013 (“FY2013”).
A total of 14 webgame titles and 5 mobile games were launched and operated in FY2013. Among the webgame titles, “Conquest of the Universe” (斗破乾坤) has received the Golden Plume Award 2013 for “The Most Popular Webgame Among Players” (金翎獎2013: 玩家最喜愛的網頁遊戲), while “Clash of Dragons” (龍戰天下) was awarded The Gold Finger Prize for “The Most Anticipated Webgame” at the China Game Industry Annual Conference (2013年度中國動漫遊戲行業金手指獎-最受期待網頁遊戲). On the mobile side, the results of the newly launched mobile action role-playing game “Soul Guardian Mobile Version” have been encouraging and the game’s popularity is rising.
Against the backdrop of a favorable macroeconomic trend and the increasing penetration of the internet and wireless communications across China, the Group was able to deliver a remarkable 52.3% increase in total revenue to RMB1,183.1 million, compared to RMB776.6 million for the financial year ended 31 December 2012 (“FY2012”). Revenue from the game development segment and game publishing segment increased 47.8% and 62.6% to RMB799.4 million and RMB383.7 million, respectively. Gross profit amounted to RMB1,001.9 million (FY2012: RMB697.6 million), representing a year-on-year growth of 43.6%. Adjusted net profit amounted to RMB325.2 million (FY2012: 240.0 million), representing a year-on-year growth of 35.5%.

For game development and operations, the Group’s average monthly paying users (“MPU”) has surged to approximately 710,000 in 2013 (2012: 518,000), driven by both (i) the new webgames and mobile games launched during the year and (ii) the continued growth in popularity from previously launched games. Average revenue per paying users (“ARPPU”) has increased to RMB94 in 2013 (2012: RMB87). Such growth is mainly due to the improving monetization of the Group’s mature titles partially offset by the newly launched titles that typically will generate a lower ARPPU during its ramp-up phase. As for game publishing, the Group’s average MPU increased to approximately 109,000 in 2013 (2012: 71,000), primarily because of (i) the growing registered user base; (ii) the Group’s efforts in providing a high-quality player service to attract a greater number of paying players.
Mr. Dongfeng Wang, Chairman and Chief Executive Officer of Forgame, said, “Being one of the few webgame players in China with strong capabilities in both game development and game publishing, to address the fast-evolving demand of webgame players, we have been carefully reviewing and enriching our game portfolio by beta testing some innovative mobile game titles. We are also delighted to see by our continous efforts on targeted marketing and promotion of our games, our self-owned webgame publishing platform, 91wan has more than 207 million registered players, a growth rate of 46.8% compared to 2012 as of 31 December 2013.”
To capture the mobile game market opportunities is Forgame’s core strategic focus, thus it entered into a conditional sales and purchase agreement to acquire 21% of Magic Feature Inc.’s equity interest on 3 March 2014. Magic Feature Inc., through its subsidiaries, develops and publishes “Tower of Saviors(神魔之塔)”, one of the most popular mobile games in Asia which achieved 11 million downloads globally as of March 2014 and has consistently ranked within Top 3 games of Apple’s AppStore and Google Play in Hong Kong and Taiwan in terms of grossing. The game is also being exclusively published by Tencent in China on various mobile platforms including WeChat.  This strategic partnership is expected to generate tremendous synergies in the long run.
The Group has established its first overseas development centre in Taiwan, to take advantage of the island’s deep talent pool of game developers and artists in the fourth quarter of 2013. This centre will focus on creating mobile games with a global appeal.
Moreover, it has invested RMB32 million and co-founded the Chengdu Companion Fund with the mandate of investing in innovative mobile game content to complement the Group’s own internally developed content.
Looking ahead, the Group expects to launch around 12 webgames and 12 mobile games for the year of 2014. It has put in place a comprehensive strategy for content acquisition while devoted substantial effort in building its own content distribution capability. The Group is building its mobile game portfolio of various genres and styles through internal development, investment in development studios, as well as licensing from top developer studios globally. With the redeployment of some webgame developers to work on mobile game projects, a solid pipeline of mobile games has already been built. The Group is also evaluating investment opportunities across various parts of the mobile game value chain with the aim of building an ecosystem that would drive organic traffic.
Mr. Wang concluded, “As one of the leading webgame developers, we are relentlessly focused on delivering quality games. We believe investments are strategically important for the long-term sustainability of our business, and will generate substantial return for our shareholders in the long run.”
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About Forgame Holdings Limited (stock code: 484)
Listed on the Hong Kong Stock Exchange on 3 October 2013, Forgame Holdings Limited is a leading developer and publisher of webgames in China with a fast-growing mobile games business. Since its establishment in 2009, the company has successfully developed and launched more than 30 popular games. It was the No.1 webgame developer in China, with a 24% market share of net revenue within the webgame development industry in 2012, according to an independent research institution, iResearch’s report. Its publishing platform, 91wan, has released 105 self-developed and licensed webgames and had attracted over 207 million registered players as of 31 December 2013.