The9 Q4 2005 Earnings Conference Call Transcript (NCTY)

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Earnings Call Excerpt

The9 Q4 2005 Earnings Conference Call Transcript (NCTY)

February 22, 2006

Executives

Jun Zhu, Chairman and CEO
Hannah Lee, Chief Financial Officer
Dahlia Lee, Senior Investor Relations Manager

Analysts

Antonio Tambunan, Bear Stearns
Stephen Ng, Cazenove
Jason Brueschke, Citigroup
Wallace Cheung, Credit Suisse First Boston
Dick Wei, JP Morgan
Lu Sun, Lehman Brothers
C. Ming Zheo, Susquehanna

Presentation

Dahlia Lee, Sr. Investor Relations Manager.

Thank you. Hello everyone and thank you for joining us today for the The9 fourth quarter and fiscal year 2005 financial results conference call. The management with me today are Mr. Jun Zhu, Chairman and Chief Executive Officer and Miss Hannah Lee, Chief Financial Officer and we have a translator for the Q&A Session. Before we start, I would like to make a couple of statements. During the course of this call, certain projections or forward looking statements may be made regarding The9’s future financial performance or future events. We wish to caution you that such statements and predictions are based on current information and expectations and actual results may differ materially from those projected in the forward looking statements. We would also like to refer you to the documents that the company files with the US securities and exchange commission. Those documents contain additional information and factors that could cause actual results to differ materially from those contained in the management projections or forward looking statements. Let me know turn the call over to Mr. Zhu, our CEO, who will provide you with an overview of our recent 4th quarter and fiscal year.

Jun Zhu, Chairman and CEO.

Good morning and good evening ladies and gentlemen, I would like to thank you for participating in our review of The9 Q4 and fiscal year 2005 earnings.

First, I would like to present a quick overview of the key financial highlights for the fourth quarter and fiscal year 2005. The 4th quarter was again a good quarter for our operations of in China markets. Net revenue for Q4 was US$26.3 million, representing 15% quarter over quarter growth. Net income was US$8.5 million, or earnings of US$.55 per ADS.

For the fiscal year 2005, net revenue was US$55.6 million, representing 1,239% year on year growth. Net income was US$9 million or earnings of US$.76 per ADS.

Now let’s discuss the development of our online game business.

For the fourth quarter we obtained WOW users of approximately 530,000, and average users of 217,000. In each month of the fourth quarter, our PCU numbers grew sequentially month over month. As of December 31st of 2005, there are over 3.3 million registered WOW accounts.

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