ChinaSecurities

Perfect World Co., Ltd. operates as an online game developer and operator in China. It primarily develops three-dimensional (3D) online games based on its proprietary Angelica 3D game engine and game development platform. The company’s 3D massively multiplayer online role playing games (MMORPG) include Perfect World, Legend of Martial Arts, Perfect World II, Zhu Xian, Chi Bi, Hot Dance Party and Pocketpet Journey West. It is trying to diversify its portfolio by tapping the 2D& 2.5D game market, with the first title, Battle of Immortals, to be launched in 2009. The company has 5 MMORPGs under in-house development, and it just acquired a studio that has 2 new games under development. The company was founded in 2004 and is based in Beijing, China.

For 3Q08, PWRD reported revenue of $56.2 million and EPADS of $0.49. Active Paying Accounts (APA) increased 5.3% q/q in 3Q08, driven in part by newly launched Pockpet Journey West (PPJW). Mgt expects 4Q08 revenue growth of 5-10% q/q and operating margins to remain relatively stable. The company also expects to take a one-time charge in Q4 related to the $15 million InterServ game licenses acquired in the qtr. PWRD has 5 MMORPGs under in-house development, and its first 2.5D game, Battle of Immortals, is undergoing closed beta for commercial launch that could take place as early as 1Q09. PWRD announced a repurchase program in 3Q to buy back up to $100 million ADSs through Oct-09.