CDC Corporation's (CHINA) China.com has announced its Hong Kong GAAP financial results for the three months ended March 31, 2006.
In Q1 2006, China.com's online game Yulgang continued to achieve new milestones and sustain strong growth momentum. Peak concurrent users for Yulgang surpassed 330,000, representing a quarter-on-quarter increase of 27%.
Registered users exceeded 22 million in Q1 2006, up 47% quarter-on-quarter. Server groups throughout China supporting Yulgang and the company's other online games numbered 43, up 19% quarter-on-quarter. Compared to Q4 2005, the online game revenue increased by 59% to nearly HK$40 million in Q1 2006.
During the quarter, China.com increased its shareholding in 17game from 48% to 100%. 17game is a leading massive multiplayer online role-playing games (MMORPG) provider with a proven track record in launching and distributing successful online games for the China market, including Yulgang.
In Q1 2006, the China.com portal clearly listed four strategic focus areas: build China.com's Chinese website as a portal for Chinese professionals; build China.com's English channel as the world's gateway to China; leverage the value of China.com's URL and establish services in City.China.com, Country.China.com and Brand.China.com; prepare for launch of new products and services to existing enterprise clients, such as Software as a Service.
In achieving the first two goals, the China.com portal reformatted its homepage, launched a Lifestyle channel and revamped its English channel in Q1 2006. These initiatives have been well-received by the China.com users and its unique Luxury sub-channel has already generated over 800,000 daily page views.
As for the development of Country.China.com services, the China.com portal has established strategic partnership with ProAdvertising, an Italian online advertisement company, by jointly launching Italy.China.com. The new website provides Chinese Internet users with the latest Italian content in fashion, music, tourism, football and gourmet cooking, and serves as a gateway for Italian and other European businesses to enter the China market.
To further build entertainment content suited for well-educated Chinese professionals, the China.com portal formed a production team comprising former CCTV editors, writers and producers. The newly and uniquely produced "The Real Show" will be launched in May, which is expected to attract a new group of online audience, reinforce China.com's brand equity, and further position the China.com portal as a major content source for the imminent mobile 3G era.
"In Q1 2006, we achieved excellent results across our core business units. While online game business was a particularly strong driver, our China.com portal continued to play a strategic role in enhancing our brand value," said Albert Lam, Chief Executive Officer of China.com. "During the quarter, we also achieved our goal of transforming our mobile services and applications business unit from a SMS focused service provider to one with a balanced portfolio of SMS and advanced mobile products."
In Q1 2006, total mobile services and applications revenues was HK$69 million, representing 53% of the company's total revenue. Wireless application protocol (WAP) revenue grew by 36% on a quarter-on-quarter basis, driven by the company's aggressive marketing and promotional activities.
During the quarter, China.com achieved a more balanced revenue mix from its mobile services and applications. Revenue contribution of short messaging services (SMS), WAP, interactive voice response (IVR) and multimedia messaging services (MMS) represented 36%, 30%, 23% and 11% respectively, comparing to 56%, 20%, 17% and 7% respectively in Q1 2005. In addition, the company signed a number of exclusive contracts with music companies to offer some of the hottest music albums of pop singers to its users.
