Perfect World (002624) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue fell 38.12% YoY to RMB2.76bn; attributable net loss was RMB176.86m, versus net profit of RMB379.93m a year earlier.

• Results reflected declining receipts from mature games, limited new game launches, fewer film and TV releases, workforce optimization costs, and weaker-than-expected overseas testing for One Punch Man: World.

Financial highlights

• Revenue was RMB2.76bn, down 38.12% YoY; operating costs were RMB2.86bn, while operating profit was RMB132.28m versus RMB440.51m in H1 2023.

• Consolidated net loss was RMB122.22m; net loss attributable to shareholders was RMB176.86m, and adjusted attributable net loss excluding non-recurring items was RMB235.40m.

• Operating cash flow was an outflow of RMB155.53m versus an inflow of RMB320.41m YoY; investing cash flow was an inflow of RMB994.11m, primarily reflecting film-slate asset-sale proceeds.

• Non-recurring items included RMB315.99m in gains from the Universal Pictures film-slate disposal and RMB28.70m in net non-recurring asset-disposal losses, mainly from office lease exits.

Outlook and guidance

• Priorities are tighter project selection, cost and process controls, and investment focused on core advantages, with a two-track game portfolio spanning MMO and card-game products.

• Pipeline includes Where Winds Meet? No: planned titles include The World of Jade Dynasty, Jade Dynasty 2, Neverness to Everness, Shenmo Continent, and The Lord of the Rings? No: Million Arthur: Ring; launches and tests are planned across domestic and overseas markets.

• Management expects the global, multi-platform strategy to deepen as new products launch; no quantified financial forecast was stated in the cited outlook.