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Giant Interactive 4Q Profit with 29,000,000 USD, Down 32%

by admin posted Mar 4,2010

Giant Interactive, China’s leading publisher and developer of Online games and social games, today laid bare its 2009 fourth quarter’s revenue and whole year’s results. Details below:

Giant Interactive Inc.’s (GA) fourth-quarter profit dropped 32% on lower sales and users, partly attributed to the cancellation of the “Treasure Box” monetization features.

The China-based online game developer and operator’s earnings topped Wall Street’s expectations while the revenue fell a little short.

Giant said it expects a return to “sustainable top-line growth” in the first quarter, but profit is not expected to mirror revenue in the near term because of lower tax rebates and other non-operating factors.

Chairman and Chief Executive Yuzhu Shi noted signs of recovery in key performance metrics. He said Giant’s ZT Online Green Edition has quickly gained traction among China’s online gamers. “Ongoing enhancements and the addition of new features to ZT Online have also helped stabilize user levels and contributed to a rebound in players within our flagship game,” he added.

Online gaming companies are facing regulatory pressure in China, and some have expressed concern about Giant’s game lineup, which leans heavily on the ZT Online role-playing game.

For the latest quarter, Giant reported a profit of CNY197.8 million (US$29 million), or CNY0.85 (12 U.S. cents) per American depositary share, down from CNY290.3 million, or CNY1.23 per ADS, a year earlier. Excluding items, earnings fell to CNY0.87 (13 U.S. cents) from CNY1.26.

Revenue dropped 22% to CNY276 million (US$40.4 million).

Analysts estimated earnings of 11 cents on revenue of $41 million, according to a poll by Thomson Reuters.

Gross margin fell to 83.9% from 84%.

Active paying accounts for online games were 1.1 million, down 12% from a year earlier, and revenue per user also fell 12%. Peak concurrent users declined 7.6%.

Giant’s ADS were at $7.24, down 1%, in after-hours trading.

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