Net revenue for the period of gathering was 487.2 million yuan, an increase of 113%

Third quarter Performance Summary:

Net revenue of 487.2 million yuan (about 79.6 million U.S. dollars), compared with the same period last year, 228.8 million yuan growth of 113%. During the third quarter of the gathering period, net revenue growth mainly benefited from the increase of Internet value-added services revenue by 126.2%.

Net profit was 129 million yuan (about 21.1 million U.S. dollars), up 267.1% from the 35.1 million yuan a year earlier.

Based on non-US GAAP, net profit was 170.8 million yuan (about 27.9 million U.S. dollars), up 207.1% from a year earlier, compared with 55.6 million yuan.

Third quarter performance analysis:

Net revenue

Net revenue of 487.2 million yuan (about 79.6 million U.S. dollars), compared with the same period last year, 228.8 million yuan growth of 113%. The net revenue growth in the third quarter of the gathering period was mainly due to the increase of Internet value-added services revenue by 126.2% and the growth of online advertising revenue.

Revenue from Internet value-added services (including revenue from online games, yy music and other sources including affiliate programs) is 441.8 million yuan (about 72.2 million U.S. dollars), up 126.2% from the 195.3 million yuan in the same period last year. During the third quarter of the gathering period, the growth of Internet value-added services revenue mainly benefited from the number of paid users and the average revenue per user growth.

YY music revenue for 228.9 million yuan (about 37.4 million U.S. dollars), compared with the same period last year, 87.6 million yuan growth of 161.4%. During the third quarter of the gathering period YY music revenue grew mainly from the growth of average revenue per user and the increase in the number of paid users. The third quarter of the gathering period YY music per user average income of 297 yuan; the number of paid subscribers rose 117.2% to 771,000 over the same period last year.

Online gaming revenues are 154.5 million yuan (about 25.3 million U.S. dollars), up 84.3% from 83.8 million yuan a year earlier. The growth of online gaming revenues during the third quarter of the gathering period was mainly due to the increase in average revenue per user and the increase in the number of paid users. During the third quarter of the gathering, the average income per user increased by 17.2% to 347 yuan over the same period last year. The number of paid users grew by 56.5% to 443,000. The total number of online games is 111, compared with 68 last year.

Other businesses, including affiliate programs, have a revenue of 58.4 million yuan (about 9.5 million U.S. dollars), up 144.6% from 23.9 million yuan in the same period last year. In the third quarter of the gathering period, the revenue from the Affiliate program was 37.1 million yuan (about 6.1 million U.S. dollars), up 76.6% from the 21 million yuan in the same period last year.

Online advertising revenue of 45.3 million yuan (about 7.4 million U.S. dollars), compared with the 33.5 million yuan in the same period last year, the growth of 35.5%, mainly thanks to the average revenue per advertiser growth. In the third quarter of the gathering period, the average income of 62 advertisers increased by 41.9% to about 731,000 yuan per advertiser.

Revenue cost and gross profit

Third-quarter revenue cost of 248.6 million yuan (about 40.6 million U.S. dollars), compared with the same period last year, 113.1 million yuan growth of 119.8%. The increase in revenue costs in the second quarter of the gathering period was mainly attributable to revenue-sharing costs and content costs.

Gross profit of 238.6 million yuan (about 39 million U.S. dollars), compared with the same period last year, 115.7 million yuan growth of 106.2%. In the third quarter of the gathering period, gross profit margin was 49%, compared with 50.6% a year earlier.

Operating profit

Operating expenses of 121.3 million yuan (about 19.8 million U.S. dollars), compared with the same period last year, 76.8 million yuan growth of 58%. Operating profit of 134.1 million yuan (about 21.9 million U.S. dollars), compared with the same period last year, 39.5 million yuan growth of 239.1%. During the third quarter, the profit margin was 27.5%, compared with 17.3% a year earlier.

Net profit

Net profit of 129 million yuan (about 21.1 million U.S. dollars), compared with the same period last year, 35.1 million yuan significantly increased by 267.1%. Net profit margin was 26.5%, compared with 15.4% a year earlier.

The net profit, based on non-US GAAP, is 170.8 million yuan (about 27.9 million U.S. dollars), up 207.1% per cent from the 55.6 million yuan in the same period last year. Net profit margin was 35.1%, compared with 24.3% a year earlier.

Diluted earnings per share

The United States depository shares diluted earnings of 2.17 yuan (about 0.35 U.S. dollars), and the same period last year, the U.S. depository shares diluted earnings of 0.72 yuan.

Based on non-US general accounting standards (excluding equity incentive payments), the United States depository shares in the third quarter of the gathering period diluted earnings of 2.87 yuan (about 0.47 U.S. dollars), compared with 1.14 yuan a year earlier.

Balance sheet and cash flow

As of September 30, 2013, the total cash and cash equivalents held during the gathering period amounted to RMB 882.7 million (about USD 144.2 million) and the total amount of short-term deposits was RMB 982.8 million (about 160.6 million USD). In the third quarter of the gathering period, the net cash from business operations was RMB 222.2 million (about 36.3 million US dollars).

Total outside circulation

As of September 30, 2013, the total amount of common stock in the external circulation was 1.1 billion shares, which amounted to 55.2 million shares in the external circulation of the United States depository shares.

Performance Outlook

In the 2013 fiscal quarter, net revenue will reach RMB 510 million to RMB 520 million, up from about 91% to 95% over the same period.

Conference

Gathering time management team will be in the United States Eastern Time November 6, 2013 8 O'Clock in the morning (Beijing time November 6 Night 9 o'clock) to hold a financial conference call, interpretation of earnings results. Listen to the phone number of the conference call as follows:

United States: +1-845-675-0438

International: +1-855-500-8701

Mainland China: 400-1200654

Hong Kong, China: +852-3051-2745

Password: #89883790

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