Rice Rice net revenue 1.2 million USD in second quarter

Rice Nyse:taom today released its results for the second quarter of fiscal year 2013 as at June 30. The report showed that the net revenue of rice rice in the second quarter was $1.2 million, an increase of 15% per cent, and a net profit of $300,000, compared with $3.2 million a year earlier.

After the earnings release, Rice CEO Wang Haibing, President Cheng and CFO Jiang Yanren attended the conference call, read the earnings points and answer the analyst questions.

The following are the main elements of the analyst question and answer session:

Oppenheimer analyst Andy Yang (Andy Yeung): I have a few questions about the first Rice game product line that you plan to release in the second half of this year and next year, as well as the specific release time.

Wang Haibing: As a whole, this year our game business is from page to hand Tour upgrade transition year. In this year, we have released two games, one we have just mentioned the "Avatar" (Star), and the other is the War of God Alliance. These two games are online this summer, and their overall performance is basically in line with our expectations. In the second half of this year, we will also release two pages of tour and two has been developed for a year of hand tour. So there are about six games to come this year.

Andy Yang: The second question involves the cost of rice washing, and when do you expect the company's profit margin to stabilise or further improve?

Jiang Yanren: When it comes to profit margins, revenue growth is the basis for improved profits. In the second quarter of this year, our online business was more stable than in the first quarter, and as we said in our statement, we expect revenue to continue to grow in the third quarter. So, as revenue grows, so does profit margins.

Andy Yang: You have more than 100 million dollars in cash now, how will you use this cash, please talk about the overall plan?

Wang Haibing: On the whole, in the use of cash investment, we mainly consider three dimensions of the arrangement. The first, we will still increase the intensity of content creation, especially in the film and animation content creation input. In this field, we have more long-term planning, especially in movies and cartoons. Second, we will increase the input of the independent research and development game, especially the Hand Tour team input, we now have a 100 people's hand Tour team, in the future we will increase the investment in this area, in the hand tour market, we will pay a lot of resources. Third, in terms of acquisitions and mergers, we will focus on the animation business and the game business, the brand and the game team to expand investment.

Stifel Nicolaus analyst George Ascou (George Askew): Can you disclose the business in the second quarter of revenue and revenue ratio, such as the interactive toy business and the "collection of Card" (Trading cards) business.

Jiang Yanren: For some reason, we're just giving some instructional data, not a specific number. All I can say is that in the second quarter of this year, the authorized business contributed most of the revenue.

George Ascou: Talk about the trends in movies, independent research and development games, and interactive toy business?

Jiang Yanren: We also invest in interactive toys, page tours, hand tours, and so on, as Wang said, these are the same types of business. At present, our product audience is still mainly students, our focus is to expand the user base, and we have succeeded in attracting more older users.

George Ascou: The last question, please management to talk about the rice line business and offline business revenue composition, as well as the impact of gross margin?

Jiang Yanren: When it comes to the impact of the revenue Structure (revenue mix) on profitability, we have said that in the first half of this year, online business and offline business revenue ratio is 80%/20%. However, this revenue structure may be different in the third quarter, thanks to the strong performance of the film and interactive toy business, offline business revenue in the third quarter will be significantly increased, and offline business revenue ratio may be 70%/30%, but the fourth quarter may return 80%/20% ratio.

As for the long-term trend, online and offline business revenue ratio may be 60%/40%, and is calculated on a year-on-year basis. Specific to a business in the different products of the gross profit margin, there will be different performance. For example, our online game's gross profit margin has been very healthy and has made a significant contribution to our revenue. We also have a successful licensing business, although it drops slightly compared to the online game's gross profit margin. As for the product gross margin of the line business, because we are in the initial stage of the investment of the interactive toy product, their gross profit margin is very low, only 30% to 40%.

Analyst: First question, what are your capital expenditures in the second quarter?

Jiang Yanren: Our second-quarter capital expenditure is about 1 million dollars.

Analyst: What are your tax trends for the next few quarters?

Jiang Yanren: Our actual tax rate has been relatively stable, at around 13%.

Analyst: How many active users are there in the second quarter of the month?

Jiang Yanren: I've talked about this number in the presentation, you may have missed it. The number of active users in the second quarter was about 41 million.