IGG Annual Results Announcement: 2015

Key insights

7 takeaways

01
IGG generated US$202.5 million in annual revenue in 2015, with mobile games accounting for 94% of that total.See it on page 37
02
Net profit declined 38% to US$41.2 million due to rising operational costs, increased channel fees, and higher R&D investment, including the acquisition of Nerd Kingdom.See it on page 39
03
The company maintained a strong financial position with US$185.5 million in cash and an effective tax rate of 8.2%.See it on page 5
04
Despite profit contraction, the firm increased dividend payouts to US$67.66 million and executed share repurchases to signal long-term stability.See it on page 7
05
IGG successfully transitioned its listing from the Growth Enterprise Market to the Main Board of the Hong Kong Stock Exchange during 2015.See it on page 9
06
The user base grew to approximately 300 million accounts, with a 15% revenue surge recorded in the final quarter of the year.See it on page 35
07
Future strategy focuses on launching 15 to 20 new titles and leveraging social networking applications to drive user acquisition in North America and Europe.See it on page 36

Summary

IGG solidified its standing as a global mobile game developer throughout 2015, successfully transitioning its listing from the Growth Enterprise Market to the Main Board of the Hong Kong Stock Exchange. The company’s primary objective centered on scaling its mobile-first strategy, which resulted in mobile games accounting for 94 percent of its total annual revenue. With a user base expanding to approximately 300 million accounts, the firm leveraged its global operational structure to maintain stable annual revenue of US$202.5 million, bolstered by a 15 percent revenue surge in the final quarter.

Despite this top-line stability, profitability faced significant pressure, declining 38 percent to US$41.2 million. This contraction was driven by rising operational costs, including increased channel fees, higher employee benefits, and expanded investments in research and development, such as the acquisition of U.S.-based developer Nerd Kingdom. Furthermore, the company navigated complex financial headwinds, including new value-added tax regulations across the European Union, Korea, and Japan. Nevertheless, the firm maintained a robust cash position of US$185.5 million and a favorable effective tax rate of 8.2 percent, supported by regional tax incentives.

Strategic capital management remained a priority throughout the year. The company fully utilized the US$105 million in net proceeds from its 2013 share placement to fund promotional activities and development capabilities. Reflecting confidence in its long-term stability, the firm significantly increased dividend payouts to US$67.66 million and executed share repurchases. Looking forward, the organization intends to sustain its growth trajectory by launching 15 to 20 new titles and utilizing social networking applications to enhance user acquisition and engagement across its primary markets in North America and Europe.