Mobile gaming giant Perfect World sees sharp drop in annual net profit, shares tumble
Your browser does not support HTML5 audio
Perfect World, one of China’s leading mobile game companies, reported a significant decline in net profit in 2021. Affected by the news, the company’s share price fell to 14.63 yuan (2 .31 dollars), with a total market value of 28.382 billion yuan.
On Jan. 21, Perfect World released its 2021 forecast performance report, showing an expected annual net profit of 350 million to 390 million yuan, down 77.40% to 74.81% year-on-year. ‘other. It is also estimated that non-net profit will be deducted 100-120 million yuan, down 90.42% to 88.50% from last year.
In its attempt to explain the decline in performance, Perfect World pointed out in the announcement that its net income consisted primarily of its games, movies and drama business and headquarters expenses. Among them, the game industry is at a critical stage of upgrading products and strategies, and performance during the transition period is under pressure. The profit is estimated to be between 670 million and 690 million yuan, down 70.68% to 69.81% year-on-year. The film and drama business is expected to suffer a loss of between 170 million and 190 million yuan, due to the loss of changes in fair value caused by the company’s investment in Universal Pictures.
Perfect World further pointed out that for overseas business, the company duly adjusted the game layout and closed some projects that failed to meet expectations in the second quarter of 2021, resulting in a one-time loss of around 270 million yuan. At the end of the reporting period, the company signed an agreement with the relevant parties on the sale of studios in the United States and local distribution teams in Europe and America. The transactions are expected to be finalized in 2022. For its domestic business, the company increased its investments in R&D, which had some impact on the 2021 annual performance.
SEE ALSO: Perfect World reports net profit of $84.8 million in the third quarter of 2021
Additionally, Perfect World said performance of some games declined, leading to a lower revenue stream compared to last year, which was impacted by the pandemic. The performance of the new exploration game was not as good as expected, which also affected the results presented in the report.
According to its official website, Perfect World is a cultural and entertainment industry group, focusing on the R&D, distribution and operation of online games, and also investing in movies and drama series.