Two quarterly net profit 2.6 million US dollar fell 26%

August 26 6:00, the Air Network (Nasdaq:kong) released today the second quarter of the 2010 fiscal year ended June 30 without the audit earnings.　　According to the report, the net profit in the second quarter was 2.6 million U.S. dollars, which fell 17.8% from the net profit of 3.17 million in the first quarter of 2010, down 26% from the net profit of 3.55 million in the second quarter of 2009. Main results:-air network in the second quarter of the total revenue of 35.3 million U.S. dollars, an increase of 9%, in line with the company's previous expectations of 34.5 million U.S. dollars to 35.5 million U.S. dollars; In accordance with U.S. general accounting standards, the second quarter net profit of the net is 2.6 million U.S. dollars, in line with the company's previous expectations According to the United States General accounting standards, based on 36.76 million shares of the United States Depository Receipts calculation, the second quarter of the air network in the first U.S. depository receipts of the basic income of 0.07 U.S. dollars; based on 38.65 million shares of US depository receipts, the second quarter of the air network in the United States depository receipts of the U.S. receipts of Not in line with US GAAP, the net profit for the second quarter was $5.4 million trillion, up 14% from 4.7 million trillion in the same period last year; not in accordance with United States General accounting standards, the air network in the second quarter of each share of the United States depository receipts in the U.S. receipts of a thin income of 0.13 U.S. dollars;　　Above 44% per cent of the previous quarter-as at June 30, 2010, the net's cash and cash equivalents amounted to USD 135 million, that is, the cash and cash equivalents of the United States Depository Receipts (based on 36.76 million United States depository receipts) for USD 3.7.　　Financial Analysis: The second quarter of the net's total revenue was 35.3 million U.S. dollars, an increase of 9%, in line with the company's previous expectations of 34.5 million U.S. dollars to 35.5 million U.S. dollars. Air network total wireless value-added services in the second quarter of 17.4 million U.S. dollars, the year-on-year decline of 27%, compared to the last quarter 33%. 2.5G service in the second quarter the total wireless value-added service revenue accounted for about 15%,2G services in the second quarter of the total wireless value-added services accounted for about 85% of the revenue, lower than the last quarter of 91%. As expected, the overall operating environment of the total wireless value-added services business is still difficult, as it is the first full quarter of the latest policy restrictions imposed by wireless carrier partners.　　In addition, the Air network Interactive Voice Response system revenue is more significant seasonal impact, the reason is that the business benefited in the first quarter from a variety of promotional activities in the Chinese Lunar New Year, while the overall operating environment of the second quarter Interactive voice response system and other wireless value-added services in traditional media promotions became more restrictive.　　In the second quarter, the mobile gaming service revenue was $13 million, an increase of 91% per cent, up 37% from the previous quarter. In the second quarter, the net revenue from stand-alone mobile gaming services was $12.4 million, an increase of 145% per cent, up 3 from the previous quarter.2003–4。 The aerial network from the stand-alone mobile phone game service revenue continued strong performance, mainly due to China Mobile mobile phone game monthly service promotion.　　In the second quarter, the average monthly number of subscribers to the mobile gaming service was about 2 million. In the second quarter, the net revenue from mobile gaming was about $700,000 trillion, down 63% year-on-year, up 24% from the previous quarter. At the end of the second quarter, the air network released the "God Online" new upgrade package, the overall mobile phone network game revenue slightly increased, but from "Day robbery Online" revenue continued to decline, because the game's 3-year game life cycle is close to the end.　　We anticipate that mobile phone network gaming business in the next few quarters will stabilize, because we released in early July round of the 2D mobile phone network game "Dream Day Rob Ol", and we are scheduled to release at the beginning of 2011 entitled "Day Robbery Online 2" The second generation of "Day robbery online."　　In the second quarter, the net revenue from "day robbery online" accounted for about 49% of the revenue of mobile phone network games, from the "God online" revenue accounted for about 51%, far higher than the first quarter of 4%.　　In the second quarter, the net revenue from stand-alone mobile gaming services accounted for 95% of mobile gaming service revenue, up from 94% in the first quarter, and in the second quarter, the net revenue from mobile gaming services accounted for about 5% of mobile game service revenues, down from 6% in the first quarter. Wireless Internet services in the second quarter were 900,000 U.S. dollars, down 43% year-on-year, down 13% from the previous quarter. Air network in the second quarter of the wireless Internet service revenue 18% from wireless advertising, 82% from the Air Network wireless Internet Station services and the new acquisition of network literature site zhulang.com revenue.　　Air Network wireless Internet service revenue decline, mainly due to the air network all mobile operators partner WAP Billing platform are temporarily stop billing. NET game revenue for the second quarter was 4 million dollars, down 5% from the previous quarter. Although we released the second 3D MMORPG (massively multiplayer online role-playing game) "Demon Law" at the end of May, "Dragon" 's revenue in mainland China has declined in the first quarter.　　However, the decline in operating income of the dragon was offset by revenue from the game's authorised operations overseas, mainly in Taiwan, and the total overseas revenue of the dragon in the second quarter accounted for 37% per cent of total net gaming revenues, up from 7% in the first quarter. The net's gross profit for the second quarter was 16.9 million dollars, up 8% from a year earlier, down 5% from the previous quarter. In the second quarter, the net gross margin was 48%, up from 44% in the previous quarter.　　The decline in gross profit of the air network was partly offset by the growth of the mobile gaming business, largely because of the restrictive regulatory environment that led to the decline in total wireless value-added services. Air network total wireless value-added service second-quarter furProfits were 7.9 million dollars, down 29% from a year earlier, down 22% from the previous quarter.　　Air Network wireless value-added services the second quarter gross margin was 45%, higher than the last quarter of 39%, mainly because we focus on higher profit distribution channels and partners. NET mobile gaming's second-quarter gross profit was $5.5 million, up 45% from a year earlier, and 53% per cent from the previous quarter. Online mobile gaming services in the second quarter gross profit margin of 43%, higher than the last quarter of 38%.　　The second-quarter gross margin of mobile gaming in the air network has normalized to a somewhat restrained level in the previous quarter, as we continue to move the mobile gaming business to a monthly subscription service. Air Network wireless Internet services in the second quarter gross loss of 100,000 U.S. dollars, the last quarter gross profit of 300,000 U.S. dollars, the same period last year gross profit of 700,000 U.S. dollars. Internet mobile Advertising services in the second quarter gross profit margin of 7%, the previous quarter gross profit margin of 27%.　　Air Network wireless internet service gross profit decline, mainly due to the air network all mobile operators partner WAP Billing platform are temporarily stop billing. NET games in the second quarter gross profit was 3.5 million dollars, down 6% from the previous quarter.　　NET online game in the second quarter gross profit margin of 87%, with the first quarter flat.　　The air network's total operating costs for the second quarter were $14 million trillion, roughly the same as in the previous quarter, because of the restrictive policy environment of total wireless value-added services, which we implemented in the quarter. The net's second-quarter product development cost was $6.1 million trillion, down 10% from 6.8 million dollars in the previous quarter.　　While we anticipate that product and development will remain the company's main focus for the next few quarters, we have taken cost-saving measures in the second quarter, including streamlining the wireless internet and the total wireless value-added services team, which have reduced the share incentive spending in the second quarter. The second quarter of the air network sales and marketing costs of 5.1 million U.S. dollars, the previous quarter of 4.4 million U.S. dollars, the same period last year, 4.5 million U.S. dollars.　　The increase in sales and marketing costs for the air network was mainly due to the commercialization of the Demon Code at the end of May.　　The second-quarter overhead was $2.7 million trillion, down about 4% from the 2.8 million dollar in the previous quarter. As of June 30, 2010, the total number of air network staff was 1209, as at March 31, 2010, 1330. As total wireless value-added services continue to be in a restrictive regulatory environment, we have implemented cost-saving measures that have resulted in the streamlining of the wireless internet and total wireless value-added services teams.　　As a result, the number of mobile phone games and online gaming staff currently accounts for 50% of total staff, above 22% per cent at the end of 2009. The net's second-quarter operating profit was $2.9 million trillion, up from $3.7 million in the previous quarter.　　In the second quarter, the net operating profit margin was 8%, below 9% in the previous quarter. According to the United States General accounting standards, the second quarter net profit of the air network is 2.6 millionThe dollar, in line with the company's previous expectations of 2.5 million dollars to 3 million dollars.　　According to the United States General accounting standards, based on 36.76 million shares of the United States depository receipts, the air network in the second quarter of the United States depository receipts of the basic income of 0.07 U.S. dollars; based on 38.65 million shares of U.S. depository receipts, air network in the second quarter of the United States depository receipts in the U.S. receipts of a thin　　Not in line with U.S. GAAP, the net profit for the second quarter was $5.4 million trillion, up 14% from 4.7 million trillion in the same period last year; not in accordance with U.S. GAAP, the second quarter of the air network of the United States depository receipts per share receipts of the thin income of 0.13 U.S. dollars.　　As at June 30, 2010, the net's cash and cash equivalents amounted to USD 135 million, that is, the cash and cash equivalents of the United States Depository Receipts (based on 36.76 million per cent of US depository receipts) for USD 3.7. Business outlook: Air networks are expected to have a total revenue of 35 million to 36 million dollars in the third quarter of 2010.　　Among them (calculated as expected), the total wireless value-added services sector revenue is expected to be about 17 million U.S. dollars, mobile gaming department revenue of 14 million U.S. dollars, wireless internet service sector revenue of 1 million U.S. dollars, online gaming sector revenue of 3.5 million U.S. dollars. In the third quarter of 2010, the air network expects gross profit of $14.5 million to $15.5 million, with total operating profit and net profit of $1 million to $1.5 million.　　In accordance with U.S. GAAP, the network expects net profit of about $3.5 million to $4.5 million in the third quarter of 2010. Conference call: After the earnings release, air network management will be in the U.S. Eastern Time August 25 19:30 (Beijing time August 26 7:30) to hold a conference call to discuss the second quarter earnings. To listen to the conference call, China Telecom users can call free telephone +86-10-800-130-0399, +86-10-800-152-1490, Chinese unicom users can make free phone +86-10-800-852-1490, Hong Kong can call free telephone +　　852-800-963-844, the United States can call free phone +1-866-356-4441, or pay phone +1-617-597-5396, passwords are 31285695. Within two weeks of the end of the conference call, U.S. investors can call a toll-free number +1-888-286-8010 or pay phone +1-617-801-6888 to listen to a teleconference, with a password of 37923250. Investors can also use the following URL: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=180513&eventID= 3289775 listen to the webcast and audio recordings of the conference call.