Interim Report 2015

During the first half of 2015, IGG demonstrated consistent top-line growth, generating US$103.8 million in revenue, a 12.9% increase compared to the same period in the previous year. This performance was underpinned by a mobile-first strategy, with mobile titles accounting for 93.4% of total revenue, led by flagship products such as Castle Clash and Clash of Lords II. Despite this revenue growth, net profit declined by 24.6% to US$24.8 million, a result of rising operational expenditures, including a 40.2% increase in personnel costs, higher channel fees, and increased investment in research and development.

The company maintained a robust financial position throughout the period, reporting US$161.1 million in cash and cash equivalents as of June 30, 2015. This liquidity supported ongoing international expansion, including the establishment of new subsidiaries in Japan and Korea, and the successful transition of the company’s listing to the Main Board. Equity incentive programs, including share option and award schemes, remained central to the company’s human capital strategy, with significant activity in option grants and exercises occurring during the first half of the year.

Geographically, North America remained the primary market for the company’s operations. To navigate regulatory complexities in China, the company utilized structured contracts with Fuzhou Tianmeng to comply with foreign ownership restrictions. While these arrangements represent a minimal portion of total revenue and assets, the company continues to monitor the draft Foreign Investment Law, maintaining contingency plans to ensure operational continuity. Overall, the company remains focused on leveraging its global user base of over 260 million accounts to drive future growth while managing the cost pressures associated with its expanding global footprint and workforce.