TIAN GE INTERACTIVE HOLDINGS LIMITED HONG KONG, Nov. 27, 2015 /PRNewswire/ -- Tian Ge Interactive Holdings Limited (Tian Ge, 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 September 30, 2015.
Financial Highlights of the Third Quarter of 2015
-- Total revenues down 8.4% YoY to RMB 158.5 million from RMB 173.1 million
in the corresponding period of 2014, mainly due to the decrease of
income from online platforms as a result of decreasing ARPU.
-- Gross profit decreased by 22.1% to RMB119.3 million from RMB153.1
million in the corresponding period of 2014.
-- IFRS net profit increased by 41.9% to RMB29.6 million from
RMB20.9million in the corresponding period in 2014. IFRS net profit
margin increased to 18.7% from 12.1%, respectively.
-- Adjusted EBITDA decreased by 27.5% to RMB 58.5million from RMB 80.7
million in the corresponding period of 2014. Adjusted EBITDA margin
decreased to 36.9%from 46.6%, respectively.
-- Adjusted net profit decreased by 37.3% to RMB44.9 million from RMB71.6
million in the corresponding period of 2014. Adjusted net profit margin
decreased to 28.3% from 41.4%, respectively.
-- IFRS basic earnings per share was RMB 0.024 per share. Adjusted basic
earnings per share was RMB 0.036 per share.
Mr. Mike Fu, Chairman and CEO of Tian Ge, commented, "In the third quarter, we continued to move forward in strengthening and expanding our core live social video products towards mobile, O2O, as well as other new verticals. However, the trend towards mobile has brought both challenges and significant opportunities to us. As the younger generation tend to rely more on mobile devices rather than PC, we see mobile definitely will be the core tool and major gateway for internet access and consumption.
We have been experiencing the macro-economic headwinds which had hindered our core revenue growth thus far in 2015, but we are taking positive steps to address the issue. Our financial performance in this quarter doesn't yet show the progress we are making. Meanwhile, we have successfully launched and operated several new mobile games and applications, completed several acquisitions and entered into several cooperation alliances. Going forward, we will focus on leveraging our unique ecosystem and strategic partnership with new vertical leaders as well as strategic investments to diversify product offerings, accelerate user base growth and capitalize on emerging monetization opportunities on PC, mobile and O2O."
Operating Highlights of the Third Quarter of 2015
-- Monthly Active Users ("MAU") were 18.6 million, up 26.2% from 14.7
million in the same period of 2014 or down 1.7% from 18.9 million in the
previous quarter.
-- The percentage of our mobile MAU's reached 20.9% from 10.0% in the same
period of 2014 or from 18% in the previous quarter.
-- Quarterly Paying Users ("QPU") were 811,000, an increase of 26.1% from
643,000 in the same period of 2014.
-- Quarterly Average Revenue Per User ("QARPU") was RMB184, compared to RMB
222 in the previous quarter, mainly due to the significant increase in
mobile user base.
-- Number of Hosts and Number of Rooms slightly decreased to 37,225 and
26,354 respectively, mainly due to room consolidation and increase of
average room size of popular rooms in recent quarters to meet growing
popularity for larger rooms.
-- The total registered users as at Sept 30, 2015 are 288.4million, as
compared to 283.2 million as at June 30, 2015.
Business Review and Outlook
In the third quarter of 2015, our business was affected by a sluggish economy, as well as an industry-wide declining PC usage, increasing mobile migration, weak mobile monetization, as well as our strategic transition strategy via product diversification.
Meanwhile, we have successfully launched and operated several new mobile games and applications, completed several acquisitions and entered into several cooperation alliances. Going forward, we will focus on leveraging our unique ecosystem and strategic partnership with new vertical leaders as well as strategic investments to diversify product offerings, accelerate user base growth and capitalize on emerging monetization opportunities on PC, mobile and O2O." To date, we have several major initiatives to grow our business:
Mobile
Amid the challenge in mobile monetization for all internet products including live social video, we believe that the increasing mobile penetration rate in China offers a lucrative opportunity to expand our current product lines to mobile audiences, as well as tapping into our mobile monetization opportunities through our incubation, diversification, and vertical integration strategy through cross-industry partnership, joint-venture and M&A with leading vertical partners.
In the third quarter of 2015, our mobile monthly active users ("MAU") increased to 20.9% from 10.0% compared to the same period of 2014.
Games
In the third quarter of 2015, in addition to the three mobile games we launched and operated with test feature on live social integration in the first half of 2015, we have initiated the soft launch of a licensed new 3D interactive games, Dark Throne. The initial testing result of these games is highly anticipated. Both were Diablo-style ARPG game with unique 3D visual features and interactive motion control technology. Moreover, we are actively exploring the development of our new web and mobile game publishing platform with leading game publishing partners.
Online to Offline (O2O) Entertainment
Our O2O entertainment strategy now goes beyond the mass karaoke market. We expanded our existing user base and online experience into other offline venues, such as bars, pubs, clubs and restaurants, etc.
Going forward, we plan to leverage our well-established distributor ecosystem and management know-how to franchise or promote our products on a national scale. We believe the addressable market for our O2O entertainment products is massive, and could potentially generate outsized shareholder returns.
Healthcare Management
As part of our strategic plan, we have already expand our business into healthcare industry and are now in the process of creating an O2O healthcare oriented live social ecosystem in a larger scale, supported by our internal technology incubation team and strategic investment divisions. The future plan of the Group is to expand our investment reach in partnership with our strategic partners in the field of medical, healthcare and beauty industries.
Overseas Expansion
We established our first overseas subsidiary in Japan during first half of 2015, through which we successfully increased our global presence and at the same time introduced new premium international contents to our live social platforms. Our Japanese interactive platform is about to go online and our Chinese platform will begin offering Japanese and Korean contents and hosts as part of our internationalization strategy in 4Q 2015.
We aim to leverage our strong technological capabilities and infrastructure, large and loyal user base and established social ecosystem to advance our penetration and global presence outside of Mainland China in countries and regions with large number of Chinese speakers and similar cultural background in the karaoke and entertainment area.
Third Quarter of 2015 Financial Results
In the third quarter of 2015, Revenue decreased by 8.4% to RMB158.5 million from RMB173.1 in the same period in 2014 ,which primarily due to the decrease of income from online platforms as a result of decreasing ARPU, which is affected by industry trend of decline and shifting user trends from PCs to mobile devices.
Gross Profit
Gross profit decreased by 22.1% to RMB119.3 million from RMB153.1 million in the same period of 2014, and a decrease in gross margin to 75.3% from 88.5%.
Selling & Marketing Expenses
Selling and marketing expenses decreased by 19.8% to RMB 49.1million from RMB 61.2 million in the same period in 2014.The decrease was primarily due to the cost control policy we adopted this year.
Administrative Expenses
Administrative expenses decreased by 29.2% to RMB26.0 million from RMB 36.8million in the same period in 2014. The decrease was primarily due to the decrease in share-based compensation expense and listing expense.
Research & Development Expenses
Research and development expenses decreased by 4.5% to RMB21.9 million from RMB 23.0 million in the same period in 2014, primarily due to the decrease in share-based compensation expense.
Adjusted EBITDA
Adjusted EBITDA decreased by 27.5% to RMB58.5 million from RMB 80.7 million in the same period of 2014. Adjusted EBITDA margin was 36.9%, compared to 46.6% for the same period of 2014. Adjusted EBITDA represents operating profit adjusted to exclude non-cash share-based compensation expenses, listing expenses, depreciation and amortization.
IFRS Net Income and Earnings Per Share
IFRS net profit increased by 41.9% to RMB29.6 million from RMB20.9million in the same period in 2014. IFRS basic earnings per share was RMB0.024
Adjusted Net Income and Earnings Per Share
Adjusted net profit decreased by 37.3% to RMB44.9 million from RMB71.6 million in the same period of 2014. Adjusted basic earnings per share was RMB 0.036.
Adjusted net profit is not defined under IFRS, and eliminates the effect of non-cash fair value changes of convertible redeemable preferred shares, listing expenses and non-cash share based compensation expenses.
Balance Sheet
As of September 30, 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 RMB1,497.3 million. The Company adopts conservative treasure policies in cash and financial management, and does not use any financial instruments for hedging purposes.
The Company did not have any bank borrowings at September 30, 2015.
Capital Expenditures
In the third quarter, the Company did not have any significant capital expenditures for the three months ended September 30, 2015.
Recent Events
-- In September 2015, the Group further increased the equity interest from
10.00% to 31.92% in Zhejiang Sodao Network Technology Co., Ltd., a third
party company engaged in business promotion and trading via online
female network community in the PRC. The total consideration for 31.92%
of equity interest is RMB18,000,000.
-- During the three months ended September 30, 2015, the Company had
repurchased a total of 3,289,000 ordinary shares listed on The Stock
Exchange of Hong Kong Limited with an aggregate amount of HK$10,156,480.
All the repurchased ordinary shares had been cancelled as of September
30, 2015.
Conference Call Information
The Company will host a conference call at 8:30 p.m. ET on November 29, 2015 (9:30 a.m. Beijing Time on November 30, 2015) 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-Local Toll)
-- 86-105-357-3132 (Beijing-Local Toll)
-- 4001-201203 (China Toll Free)
-- 800-905945 (Hong Kong Toll Free)
Please dial-in approximately 5 minutes in advance to facilitate a timely start.
A replay will be available until 8:30 p.m. ET on November 28, 2015 and may be accessed via:
-- 1-877-344-7529 (US Toll Free)
-- 1-412-317-0088 (International Toll)
-- 855-669-9658 (Canada Toll Free)
-- Replay access code: 10075974
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)
Tel : (852) 3679 3671 / (852) 3752 0428 / (852) 3752 0432
Fax : (852) 3753 2899
Email: jchan@lbs-comm.com / jliu@lbs-comm.com / ifok@lbs-comm.com
For investor inquiries, please contact:
Kenneth Ke - Associate Director, Investor Relations
Tel: +86 (571) 88108686 Ext. 8103
Email: kenneth@9158.com
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.
Condensed Consolidated Statements of Comprehensive Income
Unaudited Unaudited
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2015 2014 2015 2014
RMB'000 RMB'000 RMB'000 RMB'000
Revenue 158,478 173,086 530,315 517,343
Cost of revenue (39,216) (19,986) (106,599) (74,040)
------- ------- -------- -------
Gross profit 119,262 153,100 423,716 443,303
Selling and marketing expenses (49,098) (61,227) (141,511) (156,051)
Administrative expenses (26,041) (36,762) (82,251) (106,376)
Research and development expenses (21,945) (22,984) (61,992) (56,961)
Other gains, net 14,726 16,378 42,532 30,455
------ ------ ------ ------
Operating profit 36,904 48,505 180,494 154,370
Finance income 2,037 3,325 3,506 6,318
Finance costs (2,038) (725) (2,711) (2,564)
------ ---- ------ ------
Finance income/(loss), net (1) 2,600 795 3,754
Fair value loss of convertible redeemable preferred shares - (23,057) - (283,559)
Share of loss of investment accounted for using the equity method (350) - (723) -
---- --- ---- ---
Profit/(Loss) before income tax 36,553 28,048 180,566 (125,435)
Income tax expense (6,952) (7,189) (34,125) (27,882)
------ ------ ------- -------
Profit/(Loss) for the period 29,601 20,859 146,441 (153,317)
Other comprehensive income / (loss)
Items that may be reclassified to profit or loss
------------------------------------------------
Currency translation differences 40,789 (3,001) 40,412 (9,170)
------ ------ ------ ------
Total comprehensive income/(loss) for the period 70,390 17,858 186,853 (162,487)
====== ====== ======= ========
Profit / (loss) attributable to:
- Shareholders of the Company 29,963 20,582 144,874 (153,771)
- Non-controlling interests (362) 277 1,567 454
---- --- ----- ---
29,601 20,859 146,441 (153,317)
====== ====== ======= ========
Total comprehensive income/(loss)
attributable to:
- Shareholders of the Company 70,752 17,581 185,286 (162,941)
- Non-controlling interests (362) 277 1,567 454
---- --- ----- ---
70,390 17,858 186,853 (162,487)
====== ====== ======= ========
Earnings/(Loss) per share (expressed in RMB per share)
- Basic 0.024 0.018 0.117 (0.190)
- Diluted 0.023 0.016 0.110 (0.190)
Dividends - - 59,573 -
=== === ====== ===
Condensed Consolidated Statements of Financial Position
Unaudited Audited
September December
30, 2015 31, 2014
--------
RMB'000 RMB'000
Assets
Non-current
assets
Property and
equipment 184,571 142,280
Intangible
assets 124,261 49,002
Investment in
associates 46,729 3,863
Deferred
income tax
assets 26,682 32,466
Available-
for-sale
financial
assets 75,745 26,776
Prepayments
and other
receivables 82,537 40,744
Term deposits
with initial
term over 3
months - 479,869
540,525 775,000
------- -------
Current
assets
Inventories 13,238 -
Trade
receivables 25,419 14,049
Prepayments
and other
receivables 353,851 159,032
Available-
for-sale
financial
assets 275,954 313,029
Financial
assets at
fair value
through
profit or
loss 136,319 109,481
Term deposits
with initial
term over 3
months 643,754 602,917
Cash and cash
equivalents 441,303 289,083
1,889,838 1,487,591
--------- ---------
Total assets 2,430,363 2,262,591
========= =========
Equity
Equity
attribute to
shareholders
of the
Company
Share capital 792 779
Share premium 2,305,143 2,381,529
Shares held
for RSU
Scheme (14) (19)
Other
reserves 215,052 122,473
Accumulated
deficits (278,435) (421,073)
-------- --------
2,242,538 2,083,689
Non-
controlling
interests 24,755 4,799
------ -----
Total equity 2,267,293 2,088,488
========= =========
Liabilities
Non-current
liabilities
Deferred
income tax
liabilities 5,213 361
Other non-
current
liabilities 1,357 1,389
6,570 1,750
----- -----
Current
liabilities
Trade
payables 20,676 24,278
Other
payables and
accruals 64,653 52,530
Income tax
liabilities 45,254 51,523
Customer
advance and
deferred
revenue 25,917 44,022
156,500 172,353
------- -------
Total
liabilities 163,070 174,103
======= =======
Total equity
and
liabilities 2,430,363 2,262,591
========= =========
Net current
assets 1,733,338 1,315,238
========= =========
Total assets
less current
liabilities 2,273,863 2,090,238
========= =========
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SOURCE Tian Ge Interactive Holdings Limited
