IGG Inc. Annual Report 2015

Key insights

6 takeaways

01
IGG Inc. successfully transitioned its listing from the Growth Enterprise Market to the Main Board of the Hong Kong Stock Exchange in 2015.See it on page 6
02
Mobile gaming became the company's core revenue driver, accounting for 94% of total annual revenue.See it on page 5
03
Annual revenue remained stable at US$202.5 million, while net profit declined to US$41.2 million from US$66.4 million due to higher R&D, administrative costs, and new tax regulations.See it on page 76
04
The company maintained a strong liquidity position with US$185.5 million in cash and zero bank borrowings.See it on page 16
05
The workforce grew to 860 employees, supported by equity incentive schemes including Pre-IPO and Post-IPO share options and a specific program for the Tapcash subsidiary.See it on page 57
06
Management utilized 'Structured Contracts' to navigate PRC regulatory environments and foreign investment laws, asserting that these arrangements remained secure.See it on page 68

Summary

The 2015 Annual Report for IGG Inc. details a pivotal year of transition and consolidation as the company successfully migrated its listing from the Growth Enterprise Market to the Main Board of the Hong Kong Stock Exchange. The primary thesis of the report centers on the company’s strategic pivot toward mobile gaming, which accounted for 94% of its total revenue, and its efforts to maintain a robust global footprint while navigating complex regulatory environments in Mainland China and abroad.

Financially, the company maintained stable revenue of US$202.5 million, though net profit declined to US$41.2 million from US$66.4 million in the previous year. This contraction was largely attributed to increased research and development expenditures, rising administrative costs, and the impact of new value-added tax regulations. Despite these pressures, the company remained in a strong liquidity position with US$185.5 million in cash and no bank borrowings. The firm’s capital management strategy emphasized shareholder returns, evidenced by the distribution of dividends and the execution of a share buy-back program for shares deemed undervalued by the Board.

Operationally, the company expanded its international presence and workforce, which grew to 860 employees. To ensure long-term talent retention and alignment with corporate performance, management utilized various equity incentive schemes, including Pre-IPO and Post-IPO share options and a dedicated scheme for its Tapcash subsidiary. Governance remained a priority, characterized by a stable board structure and the use of "Structured Contracts" to manage operations within the PRC. While the company acknowledged potential regulatory risks regarding foreign investment laws, it concluded that these arrangements remained secure and that any necessary structural transitions would have an immaterial financial impact. Overall, the company concluded the year with a solid balance sheet and a clear focus on sustaining its competitive position in the global mobile gaming market.