View
241
Download
0
Category
Tags:
Preview:
DESCRIPTION
China mobile games and entertainment group
Citation preview
Disclaimer
1
This presentation has been prepared by China Mobile Games and Entertainment Group Limited (the “Company”) and has not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Company or any of its affiliates, advisers or representatives or the underwriters as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctness of the information or opinions presented or contained in this presentation. None of the Company or any of its affiliates, advisers, or representatives or the underwriters accept any responsibility whatsoever (in negligence or otherwise) for any loss howsoever arising from any information presented or contained in this presentation or otherwise arising in connection with the presentation. The information presented or contained in this presentation is subject to change without notice and its accuracy is not guaranteed. This presentation contains statements that reflect the Company’s intent, beliefs or current expectations about the future. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company’s operations and other factors, many of which are beyond the Company’s control, and accordingly, actual results may differ materially from these forward-looking statements. The Company or any of its affiliates, advisers or representatives or the underwriters has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances. This presentation does not constitute an offer to sell or issue or an invitation to purchase or subscribe for any securities of the Company for sale in the United States or anywhere else. No part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Specifically, these materials do not constitute a “prospectus” within the meaning of the U.S. Securities Act of 1933, as amended, and the regulations enacted thereunder (the “Securities Act”). This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company. Any decision to purchase the Company’s securities in any proposed offering should be made solely on the basis of the information contained in the prospectus relating to such proposed offering. In evaluating our business, we use certain non-GAAP measures as supplemental measures to review and assess our operating performance. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performances, investors should not consider them in isolation, or as a substitute for net (loss)/income attributable to the Company or other consolidated statement of operations data prepared in accordance with U.S. GAAP. THE INFORMATION CONTAINED IN THIS DOCUMENT IS BEING GIVEN SOLELY FOR YOUR INFORMATION AND ONLY FOR YOUR USE IN CONNECTION WITH THIS PRESENTATION. THE INFORMATION CONTAINED HEREIN MAY NOT BE COPIED, REPRODUCED, REDISTRIBUTED, OR OTHERWISE DISCLOSED, IN WHOLE OR IN PART, TO ANY OTHER PERSON IN ANY MANNER. Any forwarding, distribution or reproduction of this presentation in whole or in part is unauthorized. By attending this presentation, participants agree not to remove these materials, or any materials provided in connection herewith, from the conference room where such documents are provided. Participants agree further not to photograph, copy or otherwise reproduce this presentation in any form or pass on this presentation to any other person for any purpose, during the presentation or while in the conference room. Participants must return this presentation and all other materials provided in connection herewith to the Company upon completion of the presentation.
Overview of China mobile game value chain
3
Developers
Publishers
Distribution Platform
Self-developed games
Pre-installation and game center
Published games
Design and develop mobile games Publish games through distribution platforms or
license to publishers
License games created by third party developers
Value added services such as game optimization, marketing and user data analysis
Distribution channels for developers and publishers
Includes mobile game portals and pre-installation on mobile devices
Users
Payment Channels
Facilitate the collection and transfer of payment
Include telco operators and third-party payment channels
A leading mobile game developer
Multiple awards for self-developed game "War Valley"
Largest mobile game publisher in 2014Q1 and 2013
Publisher of multiple top games in various game genres
Extensive Game Center pre-installation
Strong relationship with leading distribution platforms
Provide players with access to all major payment channels
Source: Company data, Analysis, Sootoo.com
CMGE Competitive Strengths
17.9%
Chu Kong 16.2%
FL Mobile 13.2%
iDreamSky 13.0%
Kun Lun 11.0%
Game Comb 9.1%
Others 19.6%
18.9%
Chu Kong 16.4%
FL Mobile 13.8%
iDreamSky 13.4%
Kun Lun 11.0%
Game Comb 10.1%
Others 16.4%
Company overview
4
A portfolio of 847 games with 110 social games and 737 single player games
8.2 million paying users in 2014Q1
Social games contribute approximately ~70% of our game
revenue as of 2014Q1
Large and extensive mobile game sales and distribution network in China
Over 1,200 employees with ~500 game developers
Offices and R&D centers in Guangzhou, Shenzhen, Beijing, Chengdu, Shanghai and HK
Business model
Developer
23 self-developed
social games
Publisher
87 licensed social
games as of 2014Q1
Platform
CMGE Game Center
Largest publisher and a leading developer of mobile games in China with integrated capabilities across the mobile game value chain
29 social games
are exclusively licensed as of 2014Q1
187 self-
developed single player games
Extensive Game Center pre-installation
#1 mobile game
publishers’ market share in 2014Q1 and 2013
Source: Company data, Analysis, Sootoo.com
Mobile game publishers’ market share by in China
2013 2014Q1
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Jan'1
3
Fe
b'1
3
Mar'13
Apr'13
May'1
3
Jun'1
3
Jul'1
3
Aug'1
3
Sep'1
3
Oct'13
Nov'1
3
Dec'1
3
Jan'1
4
Fe
b'1
4
Mar'14 -
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Cumulative Paying Users
Cumulative Registered Users
0 20,000 40,000 60,000 80,000
100,000 120,000 140,000 160,000 180,000 200,000
Jan'1
3
Fe
b'1
3
Mar'13
Apr'13
May'1
3
June'1
3
Jul'1
3
Aug' 1
3
Sep'1
3
Oct'13
Nov'1
3
Dec'1
3
Jan'1
4
Fe
b'1
4
Mar'14
Cumulative Gross Billings
A large portfolio of popular and profitable mobile games Self-developed games
5
Wen Ming II 2009 Top 10 Most Popular
Original Mobile Games
Xiao’ao Jianghu Top grossing game in
Maopao app store from Jan-Apr 2011
Kangri Yingxiong Zhuang Most downloaded single-
player game on China Mobile during Jan 2012
Cut Cut Boom Top grossing iPad game in China during Nov-Dec
2010
远洋Online
2008 “Best Social Game” 2008 “Best Strategy
Game” 2007 “Best Mobile
Social Game”
Creation Song 2010 Top 10 Most
Popular Original Mobile Games
Thumb Monopoly 2009 Top 10 Most
Popular Original Mobile Games
YY Three Kingdom 2008 Top 10 Most
Popular Original Mobile Games
G+ Smartphone game bundle
Top grossing game bundle on China Mobile
during Jan-Jul 2012
Paopao Xiyou Golden Plume Award as
Best Mobile Platform Online game in China
2011
Home Aquarium Top 6 on Apple’s China
Region iTunes paid games list and 2nd on
Apple’s China Region iPad paid game list
Joyful Da Ying Jia Golden Apple Award as best
mobile game in 2013
War Valley Golden Finger Award (Best Mobile
game) Jin Ling Award (Most Fav mobile
game), Top 10 Most innovative mobile games in GGS, Social Game excellence award in GMGC
Fist award (Best social game)
RMB ‘000
Paying users ‘000 Registered users ‘000
2008 2009 2010 2011 2012 2013
Consistently develop popular and top-ranked mobile games
6
Top 5 mobile single-player games
Top 5 mobile RPG games
Top 5 mobile card games
Top 5 mobile education games
I Am MT Dream One Piece Wu Xia Q Zhuan San Guo Zhi I am Huo Ying
Plants vs. Zombies 2 Temple Run 2 Carrot Fantasy Fishing Joy 2 Minion Rush
Space Hunter Master Sword Shen Mo The Eternal Warrior 3 Nuzhan Xuanyuan
Happy Fish: Dream Aquarium Monster Island Business Life Monst X Monster Tiantian Xuanwu
A large portfolio of popular and profitable mobile games
Publisher of choice by top mobile game developers
Denotes games published by CMGE
Source: Company data (1) Exclusive on Android (2) Exclusive on all Android platforms except Qihoo 360 (3) Exclusive on all Android platforms except Baidu 91
(1)
(2)
(2) (3)
7
Strong and differentiated distribution channel
Extensive Game Center pre-installation
Strong partnership with top third-party app store and SNS platform
in China
Close collaboration with major third-party app stores and SNS platforms Multiple top 20 ranked games in major distribution platforms such as Qihoo 360 and 91.com Strategic relationship with major app stores including 91.com, HiMarket and Qihoo 360
“Grade A” strategic partner with mobile operators
Close collaboration with over 400 handset manufacturers Strategic co-operation with Mediatek to pre-install games/game center on Mediatek chipsets
“Grade A” strategic partner of China Mobile Master Application Partner (“MAP”) of China Mobile China Telecom and China Unicom: strategic cooperation to market CMGE’s mobile social games.
Strong self-development capabilities and game pipeline
8
2013-2014Q2 self-developed new games pipeline:
2013Q1 2013Q3 2013Q4 2013Q2 2014H1
Eagle 1945
Zhumo Zhizhan
Immortal Wind War Valley
Social games: 23 self-developed social games as of 2014Q1 Single player games: 187 self-developed single player games as of 2014Q1
Tank Eagle 2
Demonstrated sourcing capabilities and strong publishing pipeline
9
Number of publishing titles of social games
Exclusively licensed social games launch timeline (for game titles which were already acquired up to Mar 2014)
3 8
16 21
29 33 28 28
28
30
58
68
Q1 2
013
Q2 2
013
Q3 2
013
Q4 2
013
Q1 2
014
Q2 2
014 (
E)
Non-exclusive licensed games
Exclusive licensed games
87
101
2013Q1 2014H1 2013Q3 2013Q4
2013Q2
51
31
36
44
Experienced management team
10
VODone’s Chairman and CEO
Chairman of China APEC Development Council
Vice Chairman of the China Internet Association
28+ years of Chinese Government administration and executive management experience
Doctorate degree from Nankai University
17 years of experience in corporate finance and capital markets
Acted as VODone’s Executive Director and CFO from 2009 to 2012. Previously worked at HSBC
Master’s degree in engineering economic systems and operations research from Stanford University
Founder of 3GUU
Over 15 years of experience in mobile industry in China
Bachelor’s degree from Jinan University
Dr. Lijun Zhang Chairman of the Board
Mr. Hendrick Sin Vice-chairman of the Board
Mr. Yongchao Wang Vice-chairman of the Board
Founder of KKFun
Co-founder of Infomobile and Hong Kong listed A8 Digital Music
Over 10 years of mobile games experience in China
Master’s degree from South China Normal University
Mr. Ken Jian Xiao Chief Executive Officer
Over 17 years of experience in corporate finance, research and asset management
Previously worked at Barclays Capital and Merrill Lynch
Master’s degree in engineering economic systems from Stanford University
Mr. Ken Fei Fu Chang Chief Financial Officer
PVG Venture Capital Partners
Zennon Capital Partners
Strong, supportive and well-known shareholders
Mr. Shuling Ying President
Extensive experience in selection, publishing, operation and marketing
Previously worked in Standard Chartered Bank in Shanghai
Mr. Zhenyu Hu Chief Operating Officer
Over 10 years of experience in commercial operations and team management
Assistant general manager of 3GUU
Bachelor’s degree in marketing from Jiangxi Academy for Specialized Economic Management
Strong corporate governance
11
Former CFO of Country Garden Holdings (2007.hk)
Previous senior positions in Hong Kong Stock Exchange and Deloitte
Member of American Institute of CPA and Hong Kong Institute of CPA
Best CFO, all-Asia (Property)*
Expert in finance and
accounting and corporate
governance
General partner and member of the investment committee at Pacific Venture partners
Over 15 years in academic research. Professor at National Taiwan University of Science and Technology
Chairman of Taiwan Internet Association 2006 - 2009
Expert in finance and
mobile internet
CFO of Mediatek Inc. (2454.tw)
Former investment banker at JPMorgan
Best CFO, all-Asia (Tech/Semi-conductor)*
Expert in finance, and
multi-national company
management skills
Founder & managing partner of AID Partners
Former senior positions at Investec Asia, China Everbright Capital and BNP Paribas Peregrine
Member of Australian Society of Public Accountants and Hong Kong Institute of CPA
Expert in finance and
investment and corporate
governance
Ms. Estella Yi Kum Ng (Age: 56)
Mr. Chen-Wen Tarn (Age: 53)
Mr. David Ku (Age: 44)
Mr. Joel Chang (Age: 45)
Strong focus on corporate governance with highly reputable independent directors
Audit committee
Remuneration committee
Corporate governance
and nominating committee
Board
3 Independent directors
2 Independent directors & a Director
2 Independent directors & a Director
5 Executive Directors
4 Independent Directors
* - By Institutional Investor
Income statement (2009 – 2013)
13
Successfully transformed from feature phone games to smart phone games as evidenced in the financial performance in 2013
Note: Exchange rate USD/RMB: 6.0537
Revenue
Gross profit
Net profit
(US$ in thousands) (US$ in thousands) (US$ in thousands)
14,002
20,716
40,221
30,988
58,313
2009 2010 2011 2012 2013
7,885 13,628
22,324
15,835
32,544
56% 66%
56%
51%
56%
2009 2010 2011 2012 2013
Gross Profit Margin
5,137 6,725
26,982
(2,391)
4,421
37%
32%
67%
(8%)
8%
2009 2010 2011 2012 2013
Net profit Margin
Quarterly income statement (2012 – 2014Q1)
14
Revenue
Gross profit
Adjusted EBITDA(1)
Net profit/(loss)
Note: Exchange rate USD/RMB: 6.0537 except 6.2164 used for 2014Q1 financials and 2014Q2 revenue estimate (1) Adjusted EBITDA defined as income / (loss) from operations excluding depreciation and amortization, share-based compensation expense, impairment of goodwill and intangible assets, and listing expenses (2) Net income for 2013Q3 of US$4.2 million including other non-operating income of US$4.4 million (3) Net income for 2013Q4 of US$5.8 million including other non-operating income of US$4.6 million (4) Net income for 2014Q1 of US$5.6 million including other non-operating income of US$0.5 million
(US$ in thousands) (US$ in thousands)
(US$ in thousands) (US$ in thousands)
8,975 10,032 7,204
4,777 6,037
11,888
16,198
24,190
34,538
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1
4,955 6,062
3,490
1,328 2,412 5,436
9,434
15,262
21,725
55% 60%
48%
28%
40% 46%
58%
63% 63%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1
Gross Profit Margin
4,105
5,221
1,259
(1,551)
(133)
1,146
3,581
5,099
9,273
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1
3,108 3,869
267
(9,635)
(3,566) (2,078)
(186)
1,240
5,084 4,421 4,590
489
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1
Revenue estimate for 2014Q2: US$41.8 million to US$45.0 million
4,235(2) 5,830(3)
5,573(4)
R&D expenses (2009 – 2014Q1)
15
Yearly research & development expenses (2009 – 2013)
Quarterly research & development expenses (2012 Q1 – 2014 Q1)
(US$ in thousands) (US$ in thousands)
770
1,384
4,058
5,793
8,969
6%
7%
10%
19%
15%
2009 2010 2011 2012 2013
Yearly R&D expenses As percentage of revenue
1,421 1,216
1,531
1,625
1,450
1,882
2,348
3,289
2,803
12%
21%
34%
24%
16% 14% 14% 14%
8%
2012 Q1
2012 Q2
2012 Q3
2012 Q4
2013 Q1
2013 Q2
2013 Q3
2013 Q4
2014 Q1
Quarterly R&D expenses As percentage of revenue
Note: Exchange rate USD/RMB: 6.0537 except 6.2164 used for 2014 Q1 financials
Balance sheet summary & operating data
16
Note: Exchange rate USD/RMB: 6.2164
2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1
Social Games Paying Users 308,039 1,421,301 2,792,223 3,164,935 3,649,599
ARPU (RMB) 23.8 20.8 24.9 36.6 39.8
Single Player Games Paying Users 4,297,296 3,887,271 2,572,160 2,774,508 3,525,911
ARPU (RMB) 3.4 3.3 4.3 7.4 13.6
Game Bundles Paying Users 1,516,974 1,968,606 1,595,621 1,060,667 1,083,766
ARPU (RMB) 4.7 5.2 5.5 4.9 3.6
Summary balance sheet
Operating data
(US$ in thousands)
As of Mar 31,
2014
Cash and cash equivalents (including restricted cash and short term investments) 110,988
Total Assets (excluding Goodwill and Intangible Assets, net) 181,030
Total Assets 293,845
Total Liabilities 33,446
Total Shareholders’ Equity: 260,399
Clear and visible growth strategies
17
Continue to expand and enhance our game portfolio 1
Further grow our player base and monetization capabilities 2
Expand our international presence to enhance reach and profitability 3
Continue to innovate and expand our publishing platform 4
Promote our brand and name recognition 5
Pursue strategic acquisitions and partnerships 6
Tailored solutions enabling multi players interacting on different
devices, such as smartphones, tablet
computers and smart TVs
Expand into overseas markets
51PK.com real time combat platform
Innovative distribution methods such as hot spots
Partnership with hot spots vendors addressing captive audience
Recent developments
18
Strategic partnership with Beijing Super Flash Software with advanced, stable and mature game engine for converting web-games into mobile games, as well as a providing a complete 3D mobile game development kit
Ability to accumulate additional outstanding games in pipeline portfolio, to convert successful web-based games into mobile games and provide additional profit opportunities through the strategic partnership
Strategically accumulated intellectual property in the areas of animation, television, movies, online fiction and well-known PC/mobile games and to enter into collaborations with providers of intellectual property in those areas starting in 2013H2
Recent developments:
− Television: obtained rights to produce mobile games based on popular television programs including Feng Shen Ying Xiong Bang, Bu Bu Jing Xin, Bu Bu Jing Qing and a large ancient Chinese TV drama
− Animation: obtained the right to develop mobile games based on Old Master Q, a very popular comic book series in Chinese speaking areas, and one of the best-selling comic book series in Hong Kong
Investment in Yunva Technology, a company focusing on building a one-stop mobile social network with two major products cutting edge network communication technology and efficient data consumption
Expect to launch games incorporating these products that provide real time communication and facilitate communication in social games in June 2014
User acquisition
Game engine
Intellectual property
User community development
Recent awards
“Best Mobile Game Publisher Award” in May 2014 by 2014 Global Mobile Internet Conference
“San Guo Zhi Wei Li Jia Qiang Ban”, exclusively license game, awarded the “Best Social Game Marketing Award”
CEO and CFO received the “2013-2014 Greatest Growth Potential of Listed Internet Company, CEO and CFO Award” by iResearch
Traditional and continued advantage in pre-installation, number of pre-installations of game centers to exceed 80 million of handsets for 2014E
Starting from 2013H2, significant efforts in providing services to a number of free Wifi service providers such as offering tailor-made mobile game center operating services as well as “51 PK” real time combat platform. Recent strategic cooperation with free Wifi service providers has produced initial positive results from distribution of games through free Wifi networks
Investment in Douwan, to further expand offline distribution channels
Qualifications
20
Internet culture operation license PRC internet publishing license
PRC value-added communications business operation license Surveying & mapping qualification certificate
State-level high-tech enterprise certificate
Date of NASDAQ listing September 25, 2012
NASDAQ Ticker CMGE
Outstanding shares 442 million Class A and Class B
ordinary shares (1ADS: 14 shares)
Market Cap US$613million(1)
Websites www.cmge.com
ir.cmge.com
Ownership structure & general information
21
Group structure (1) General information
MediaTek / PVG
(2454.tw)
VODone Limited
(0082.hk)
42.9% 6.0% 13.6%
100% 100% 90%
CMGE (Cayman Islands)
3GUU OWX VOGINS
25.6%
Management and
Employees
China Sovereign
Wealth funds
Other Public
Shareholders
6.3% 5.6%
Zennon Capital
(1) As of May 30, 2014
Guangzhou Yingzheng
51PK Huiyou
100%
Shenzhen Lanyue
51%
160
300
480
670
770 800
2011 2012 2013 2014E 2015E 2016E
54 67
89
115
147
184
2011 2012 2013 2014E 2015E 2016E
Rapid growth in China mobile game market
22
Driven by robust mobile internet fundamentals, China mobile game market has significant potential with fast-growing addressable market
Source: iResearch, Analysys.
China mobile internet users
China gaming market size
China smartphone users
China tablet users
(In millions) (In millions)
(In millions) (RMB in billions)
431
565
699
799 866
923
2011 2012 2013 2014E 2015E 2016E
’11 – ’16 CAGR
Mobile: 53% Web: 38% PC: 19%
9 29
57
92
143
203
2011 2012 2013 2014E 2015E 2016E
Recommended