Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- IGG Inc (IGGGF, Financial) achieved a total revenue of $2.74 billion, marking a 9% increase.
- The company has diversified its business with three products exceeding USD10 million in billings, contributing to a historical peak in total revenue.
- Viking Rise and APP business have shown significant growth, with Viking Rise's billing doubling and APP business tripling.
- The company has resumed profitability with a profit of HKD330 million and plans to allocate 30% of the profit for dividends and 10% for share buybacks.
- Lords Mobile, despite being over eight years old, remains stable with a gross billing of over USD28 million, showing resilience and continued user engagement.
Negative Points
- The gaming industry faces increased competition, particularly in the SLG segment, which could impact market share and growth.
- Marketing expenses remain high, affecting profit margins, with significant spending planned for promotions in December.
- The company's APP business, although growing, is still relatively small and vulnerable to competition from larger players.
- Despite growth, the market value of IGG Inc (IGGGF) is not as high as expected, prompting management to consider shareholding increases.
- Capital expenditure is expected to rise by 30% to 35% in the second half of the year due to the completion of the headquarters building, which could impact cash flow.
Q & A Highlights
Q: Can you provide insights on user acquisition and competition for Doomsday and Viking Rise, especially in overseas markets?
A: Yuan Xu, Chief Operating Officer: For Doomsday, we expect to maintain a gross billing of USD12 million per month in the second half of the year, with increased promotion in December. The theme is popular, giving us an edge in user acquisition. Despite increasing competition in the SLG game market, our structural and thematic advantages give us confidence. For Viking Rise, we aim for USD10 million in gross billing, with plans to boost it to USD50 million per month through promotions.
Q: What are the expectations for Project FL and other new games?
A: Yuan Xu, Chief Operating Officer: Project FL, based on Doomsday, targets a global audience and is expected to release in November. Another game based on Viking Rise is planned for Q2 next year. We aim to break audience limitations by designing games that appeal worldwide, leveraging past successes.
Q: Can you discuss the growth and future potential of the APP business?
A: Yuan Xu, Chief Operating Officer: The APP business has seen rapid growth, with gross billing increasing from USD5 million in January to over USD50 million in July. We expect continued growth, aiming to push revenue to new levels. The NP margin is currently over 10%, with potential to exceed 20% as the business stabilizes.
Q: What are your plans for cash usage and market value management?
A: Yuan Xu, Chief Operating Officer: We are in a rapid growth phase, so cash will primarily support business development. While dividends are currently at 30%, we aim to use resources to drive company growth. Once revenue and profit stabilize at higher levels, we will consider increasing dividends and share buybacks.
Q: How do you plan to manage marketing expenses for the second half of the year?
A: Yuan Xu, Chief Operating Officer: For Lords Mobile, we aim to maintain revenue at USD30 million with 30%-35% marketing spend. Viking Rise will have a 50% marketing spend to sustain USD10 million revenue. We plan to increase advertising for Viking Rise and Doomsday in December to boost growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
