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Giant Interactive Group Inc. (GA)
Q3 2011 Earnings Call
November 1, 2011 9:00 PM ET
Richard Chiang – Director, IR
Wei Liu – President
Jazy Zhang – CEO
Timothy Chan – Morgan Stanley
Mark Marostica – Piper Jaffray
Tjeng – Macquarie
Gary Ngan – UBS
Thomas Chong – RBS
Jin Yoon – Nomura
Jialong Shi – CLSA
Jenny Wu – Citi
Adam Krejcik – Roth Capital Partners
Atul Bagga – Lazard Capital
Andy Yeung – Oppenheimer
Dick Wei – JP Morgan
Previous Statements by GA
» Giant Interactive Group Management Discusses Q2 2011 Results - Earnings Call Transcript
» Giant Interactive Group Management Discusses Q1 2011 Results - Earnings Call Transcript
» Giant Interactive Group Management Discusses Q4 2010 Results - Earnings Call Transcript
» Giant Interactive Management Discusses Q3 2010 Results - Earnings Call Transcript
Now, I’d like to transfer the call to the moderator, Mr. Rich Chiang, Investor Relations Director of Giant Interactive.
Good morning, ladies and gentlemen. Welcome to the third quarter 2011 earnings conference call for Giant Interactive Group. With me today are Ms. Wei Liu, President; Ms. Jazy Zhang , Chief Financial Officer; and Mr. Xuefeng Xi, Vice President of Research and Development. As we proceed through our prepared remarks, we will refer to our results presentation, which can be downloaded from our website at www.ga-me.com. Following the remarks, Ms. Liu, Ms. Zhang and Mr. Xi will be happy to take your questions.
Before we continue, I would like to remind you that statements on this call that are not strictly historically in nature constitute 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 terminologies such as will, expects, anticipates, future, intend, plans, beliefs, estimates and other statements, and include among others, statements regarding our ‘s expectation of sequential top line growth in the fourth quarter of 2011 future prospects of the company and the Chinese online game industry, future financial position of the company, the ability for the company’s new web game projects to diversify its user base. The investment strategy of the company and the timetable of – for engineering testing, close beta testing, open beta testing, introduction and commercial launch of the various (inaudible) game pipeline.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results of Giant to be materially different from historical results or from any results expressed or implied by such forward-looking statements.
These factors include, but are not limited to, the deterioration in the performance of the ZT Online 1 Series, failure of ZT Online 2 to grow as expected, unexpected delays in developing expansion packs or in the timetable for testing, introduction and launching of games, the company’s dependence on the ZT Online 1 Series games, which currently account for the majority of the company’s historical net revenues.
The company’s limited operating history and unproven long-term potential of its online game business model. The uncertainties with respect to the PRC legal and regulatory environments and the volatility of the markets in which the company operates. Competition from other online game companies, and the additional risks discussed in filings with the Securities and Exchange Commission, including our annual report on Form 20-F filed on June 17, 2011.
All forward-looking statements are qualified by their entirety by this cautionary statement, and Giant undertakes no obligation to revise or update this information to reflect events or circumstances after the date hereof. In addition, please note that references in the presentation to dollars refer to U.S. dollars.
I’ll like to begin the call by reading an introductory remark on behalf of our President Miss. Wei Liu.
Good morning ladies and gentlemen. Thank you for everyone for joining us today. As you may have seen from our earnings release, we delivered a solid quarter with both sequential and year-over-year growth continuing our steady trend of financial and operational commitment throughout 2011. Our results were supported by continued growth and the online game industry in China despite increase in competition among industry players and the launch of numerous new game titles in recent months.
We believe our ability to deliver steady growth despite strong competition extends from the success of our game segmentation and focused strategy as well as the fundamental strength of our internal development capabilities. The success to date of our flagship games ZT Online 2 demonstrates these capabilities and indicates our strategy is fundamentally found. ZT Online 2 launch into open beta testing in September and reached a new high of over 435,000 PCU a significant achievement of which we are proud.
We are also continuing to attract a broad and diverse base of playing players across our ZT Online family of games resulting in a sequential and year-over-year increase in active paying accounts and average concurrent users. The improvements in these key financial, key performance metrics demonstrate that we are succeeding in our efforts to broaden and deepen our player. (Inaudible) supported by the continuous updates in additions of new game play features to keep players engage.
While we are pleased with our performance to-date we remained focused on the continued development of our existing games and game pipeline. We are managing our expenses to maximize profitability. We have number of games in the pipeline that are nearing key development milestones and we have been actively seeking gamers as fee back from the various phases of testing and incorporating them into these games to improve game play and functionality.