Announcement of major achievements in the gathering time

The Gathering era (NASDAQ:YY) today released its first-quarter results for fiscal year 2014 as at March 31. The report showed that net revenue for the first quarter of the gathering period was 666.3 million yuan (about 107.2 million U.S. dollars), a 111.6% increase from the 315 million yuan in the same period last year, and a net profit of 183.6 million yuan (about 29.5 million USD), 63.9 million yuan grew by 187.2% over the same period last year.

According to Yahoo's financial statistics, 7 of Wall Street analysts on average expect to yield $0.50 trillion per share of US depository Receipts (ADS) after a NON-GAAP in the first quarter of the gathering era, not according to the US General accounting standards. Earnings showed that in the first quarter of the gathering time each ads revenue of 3.46 yuan (about 0.56 U.S. dollars), more than analysts expected.

Also, on average, 7 Wall Street analysts expect total revenue to reach $103.91 million in the first quarter. Earnings showed the total revenue for the first quarter of the gathering was $107.2 million trillion, exceeding analysts ' expectations.

Main achievements:

-The net revenue for the first quarter of the gathering period was 666.3 million yuan (about 107.2 million U.S. dollars), which grew 111.6% from the 315 million yuan in the same period last year. Net revenue growth in the first quarter of the gathering period was mainly due to the 127.1% increase in revenue from Internet value-added services;

-The net profit for the first quarter of the gathering period was 183.6 million yuan (about 29.5 million U.S. dollars), which grew 187.2% from the 63.9 million yuan in the same period last year;

-Not in accordance with the United States General accounting standards (excluding equity incentive payments), the first quarter of the time the net profit was 207.6 million yuan (about 33.4 million U.S. dollars), compared with the same period last year, 82.1 million yuan growth of 153%.

"We are thrilled that even in the first quarter of the season, which is prone to slow growth due to seasonal factors, we still achieve strong performance and continue to have strong growth momentum," said Lee Colling, CEO of the Gathering era. The online music and entertainment business has once again surpassed our expectations, with revenues rising 228% per cent year-on-year and paying subscribers up 103.2% per cent year-on-year. We were also very excited about the introduction of the online education Platform 100 Education Network in February, and then we launched the PC and mobile brand client last month. With our powerful audio and video communications technology, we provide students and teachers with real-time interactive settings that will continue to expand our diverse online community and user base. On our scalable platform, user-generated content is growing, increasing user participation and stickiness, and helping push up average monthly active users up to 95.5 million in the first quarter of 2014. Leveraging the strong foundation we have built, we will continue to attract users to enhance our products and commercial user flows by further developing our online entertainment, live broadcast, education, and other vertical sectors, and to adapt our services to the changing needs of our users. ”

"In the first quarter, we were able to achieve more than expected revenue performance, with the main impetus coming from the growth in user participation and spending," said CFO He Zhenyu. In addition, the net profit that belongs to the gathering time also grew only twice times year-on-year, mainly because the company business scale expands and lever grows. As we continue to expand our business, our unique business model, coupled with the scale-economy nature of our technology platform, will enhance our leverage and enhance our ability to diversify and expand our services. ”

Financial Analysis:

Net revenue:

The net revenue for the first quarter of the gathering period was 666.3 million yuan (about 107.2 million U.S. dollars), which grew 111.6% from the 315 million yuan in the same period last year. Net revenue growth in the first quarter of the gathering period was mainly due to revenue growth from internet value-added services.

Revenue from Internet value-added services (including revenue from the online music and entertainment business, online gaming business and other sources including affiliate programs and live games) was 642.1 million yuan (about 103.3 million U.S. dollars) in the first quarter of the gathering period. 282.8 million yuan grew by 127.1% over the same period last year. The growth of Internet value-added services revenue in the first quarter of the gathering period mainly reflected the growth of the number of paid users and the average income per user.

In the first quarter of the gathering period, revenues from online music and entertainment were 383.1 million yuan (about 61.6 million U.S. dollars), up 228% from the 116.8 million yuan in the same period last year. The growth of online music and entertainment revenues during the first quarter of the gathering period was mainly reflected in the growth in the number of paid users and the average revenue per user. The first season of the reunion

The number of paid subscribers to the online music and entertainment business grew 103.2% to 1.006 million; average revenue per user grew 61.4% to 381 yuan.

In the first quarter of the gathering period, revenues from online gaming were 180.3 million yuan (about 29 million U.S. dollars), up 36.3% from the 132.3 million yuan in the same period last year. The growth of online gaming revenues during the first quarter of the gathering period mainly reflects the growth of average per-user revenue and the total number of paid subscribers. In the first quarter of the gathering time, the average revenue per user grew 24.1% to 391 yuan, and the total number of paid users grew by 9.8% to 461,000. As of March 31, 2014, the number of online games in the gathering era increased to 139, compared with 92 at March 31, 2013.

In the first quarter of the gathering period, revenue from other Internet value-added services (including subscription fees for affiliate programs and live game broadcasts) was 78.7 million yuan (about 12.7 million U.S. dollars), up 133.7% from 33.7 million yuan a year earlier. In the first quarter of the gathering period, the revenue from the Affiliate program (launched in October 2013) was 43.4 million yuan (about 7 million U.S. dollars), up 54.3% from the 28.1 million yuan in the same period last year. The growth of affiliate program revenue in the first quarter of the gathering period mainly reflects the growth of the membership. As of March 31, 2014, the total number of members gathered at the time of the gathering was about 851,000, up 55.9% per cent from 546,000 people as at March 31, 2013. In the first quarter of the gathering period, the revenues from live games were 23.6 million yuan (about 3.8 million U.S. dollars), up 630.2% from the 3.2 million yuan in the same period last year.

In the first quarter of the gathering period, revenue from online advertising was 24.2 million yuan (about 3.9 million U.S. dollars), down 24.7% from the 32.2 million yuan in the same period last year.

Revenue cost and Gross profit:

In the first quarter of the gathering period, the revenue cost was 317 million yuan (about 51 million U.S. dollars), which grew 117.6% from the 145.7 million yuan in the same period last year. The increase in revenue costs in the first quarter of the gathering period was mainly attributable to revenue-sharing costs and content costs. YY first quarter income divided into the cost of 179 million yuan (about 28.8 million U.S. dollars), the same period last year for 56.1 million yuan. The increase in income-sharing costs and content costs paid to performers, channel owners, and content providers during the gathering period was mainly due to increased user participation and expenditure levels. In the first quarter of the gathering era, broadband cost was 63.1 million yuan (about 10.1 million U.S. dollars), higher than the same period last year, 43.6 million yuan.

In the first quarter of the gathering period, gross profit was 349.3 million yuan (about 56.2 million U.S. dollars), which grew 106.4% from the 169.3 million yuan in the same period last year. In the first quarter of the gathering period, gross margin was 52.4%, down from 53.7% in the same period last year, mainly because revenue from the online music and entertainment business increased in total revenue, and the corresponding revenue-sharing and content costs increased.

Operating profit:

During the first quarter of the gathering period, operating expenses were 145.2 million yuan (about 23.4 million U.S. dollars), up 37.9% from the 105.3 million yuan in the same period last year. The growth of operating expenditure in the first quarter of the gathering period was mainly due to the growth in research and development spending and the general and administrative expenses of the company to accommodate the growth of the overall business.

During the first quarter of the gathering period, operating profit was 205 million yuan (about 33 million U.S. dollars), which grew 217.9% from the 64.5 million yuan in the same period last year. During the first quarter of the gathering, operating margins were 30.8%, up from 20.5% in the same period last year. The growth in operating margins during the first quarter of the gathering period was mainly attributable to the growth in operating leverage associated with the company's expansion plans.

Not in accordance with the United States General accounting standards (excluding equity incentive payments), the first quarter of the gathering time operating profit of 229 million yuan (about 36.8 million U.S. dollars), compared with the same period last year, 82.6 million yuan growth of 177.2%. In the first quarter of the gathering era, operating margins were 34.4%, up from 26.2% in the same period last year, not in accordance with US GAAP (excluding equity incentive spending).

Net profit:

The net profit for the first quarter of the gathering period was 183.6 million yuan (about 29.5 million U.S. dollars), which grew 187.2% from the 63.9 million yuan in the same period last year. The net profit margin for the first quarter of the gathering period was 27.5%, up from 20.3% last year. Not in accordance with the United States General accounting standards (excluding equity incentive payments), the first quarter of the time the net profit was 207.6 million yuan (about 33.4 million U.S. dollars), compared with the same period last year, 82.1 million yuan growth of 153%. The net profit margin for the first quarter of the gathering period was 31.2%, up from 26.1% in the same period last year.

In the first quarter of the gathering period, the U.S. depository receipts were diluted at 3.06 yuan (about 0.49 U.S. dollars), up 175.7% from the 1.11 yuan in the same period last year. Not in accordance with the United States General accounting standards (excluding equity incentive payments), the first quarter of the gathering period of the United States Depository receipts in the year thin income of 3.46 yuan (about 0.56 U.S. dollars), compared with the same period of 1.42 yuan growth of 143.7%.

Balance sheet and Cash flow:

As at March 31, 2014, the total cash and cash equivalents and short-term deposits held during the gathering period amounted to RMB 4.7 billion (about 761.8 million U.S. dollars), compared with 2.2 billion yuan as at December 31, 2013. The increase in cash and cash equivalents and the total amount of short-term deposits held during the gathering period was mainly due to the receipt of income from the 400 million dollar convertible Premium bonds issued in the first quarter of 2014. Net cash from business operations in the first quarter of the gathering period was 195.5 million yuan (about 31.4 million U.S. dollars).

Performance Outlook:

The gathering time forecast, the 2014 fiscal year second quarter net revenue is RMB 745 million yuan to RMB 755 million yuan, year-on-year growth about 82% to 85%. This expectation reflects the company's current and preliminary views on market and operating conditions, and may change in the future.

Stock Repurchase Plan:

The Board of Trustees approved a stock repurchase plan on May 4, 2014. According to the terms of the approved plan, the time of the gathering may be in no more than 12 months to repurchase the value of up to 100 million U.S. dollars in the external circulation of the U.S. depository receipts. Repurchase transactions can be conducted in the open market or through privately negotiated transactions, such as bulk trading. The time and scale of any stock repurchase transaction will depend on the market situation, the price of the American depository voucher in the gathering time and other factors. The gathering period will be based on the relevant U.S. securities regulations and the company's securities trading policy to implement the plan and make it in line with the interests of the company. The Board will periodically review the stock repurchase plan and may adjust its terms and size. The current cash balance is expected to be used to finance stock repurchase activities under the plan.

Note: The renminbi used in this earnings rate is 6.2164:1 against the dollar.

Conference：

Gathering time management team will be in the United States Eastern Time May 5, 2014 Night 9 o'clock (Beijing time May 6 9 o'clock in the morning), the financial results of the conference call. To listen to the gathering time of the teleconference live, U.S. investors can call +1-845-675-438, international investors can call toll-free +1-855-500-8701, mainland China investors can call 400-1200654, Hong Kong investors in China can call + 852-3051-2745, the password is "#33473760".

Before May 13, 2014, US investors could call +1-855-452-5696, and international investors could call +61 2 8199 0299 to listen to the gathering-time teleconference, with the password "#33473760".

In addition, the gathering Time website Investor Relations channel http://investors.yy.com/will broadcast the teleconference and provide the recording.

Stock price change:

On that day, the share price rose 1.34 U.S. dollars in the Nasdaq conventional trading, at 61.96 U.S. dollars, or 2.21%. In the subsequent trading in 18:l2, which ended in the Eastern time of 6th (6:12), the share price fell 1.37 US dollars to $60.59, or 2.21%. In the past 52 weeks, the highest price for the gathering period was $90.93, at a minimum of 18.80 dollars.