Giant Interactive Announces Third Quarter 2012 Results

            Giant Interactive Announces Third Quarter 2012 Results

PR Newswire

SHANGHAI, Nov. 13, 2012

SHANGHAI, Nov. 13, 2012 /PRNewswire-FirstCall/ --Giant Interactive Group Inc.
(NYSE: GA) ("Giant" or the "Company"), one of China's leading online game
developers and operators, announced today its unaudited financial results for
the third fiscal quarter ended September 30, 2012.

Third Quarter 2012 Highlights as Compared to Second Quarter 2012 ("QoQ") and
Third Quarter 2011 ("YoY"):

  oNet revenue was RMB543.2 million (US$86.4 million), up 2.8% QoQ and up
    18.6% YoY.
  oGross profit was RMB468.1 million (US$74.5 million), up 1.5% QoQ and up
    18.6% YoY. Gross profit margin for the third quarter 2012 was 86.2%.
  oNet income attributable to the Company's shareholders was RMB311.7 million
    (US$49.6million), up 1.4% QoQ and down 13.7% YoY. The margin of net income
    attributable to the Company's shareholders for the third quarter 2012 was
    57.4%.
  oBasic and diluted earnings per American Depositary Share ("ADS") which
    represents one ordinary share, were RMB1.32 (US$0.21) and RMB1.28
    (US$0.20), respectively, compared to basic and diluted earnings per ADS of
    RMB1.30 and RMB1.26, respectively, for the second quarter 2012, and basic
    and diluted earnings per ADS of RMB1.54 and RMB1.53, respectively, for the
    third quarter 2011.
  oNon-GAAP net income attributable to the Company's shareholders was
    RMB342.5 million (US$54.5 million), up 0.9% QoQ and 20.2% YoY. The margin
    of non-GAAP net income attributable to the Company's shareholders was
    63.0%.
  oBasic and diluted non-GAAP earnings per ADS were RMB1.45 (US$0.23) and
    RMB1.41 (US$0.22), respectively, compared to basic and diluted non-GAAP
    earnings per ADS of RMB1.43 and RMB1.40, respectively, for the second
    quarter 2012, and basic and diluted non-GAAP earnings per ADS of RMB1.22
    and RMB1.21, respectively, for the third quarter 2011.
  oActive Paying Accounts ("APA") for online games was 2,241,000, up 1.1% QoQ
    and up 7.4% YoY.
  oAverage Revenue Per User ("ARPU") for online games was RMB238, up 2.4% QoQ
    and up 9.6% YoY.
  oAverage Concurrent Users ("ACU") for online games was 694,000, up 1.3% QoQ
    and up 4.9% YoY.
  oPeak Concurrent Users ("PCU") for online games was 2,328,000, up 0.9% QoQ
    and up 1.4% YoY.

Please refer to the table on page 8 for a reconciliation between net income
attributable to the Company's shareholder on a GAAP to non-GAAP basis.

Mr. Yuzhu Shi, Giant's Chairman and Chief Executive Officer commented, "Our
solid third quarter results reflect the strength of our expanded MMO game
portfolio. Overall, we are pleased to see our underlying businesses perform
well, especially with respect to our diversification efforts.

"While the largest portion of our revenue is still based on the ZT Online 1
Series, we are seeing promising results from our portfolio diversification
strategy implemented over the past year. For example, ZT Online 2 has emerged
as a key revenue growth driver. In addition, ZT Online 2's micro-client
version, which successfully launched in September 2012, is now acquiring new
users every day and, as we expected, is already contributing to revenue. We
have also bolstered our MMORPG pipeline with titles such as World of Xianxia.
The positive feedback we received from the engineering testing of such game in
September 2012 indicates its potential to be another blockbuster game, and
demonstrates the Company's superior MMORPG development capabilities to
continue creating products that attract hardcore gamers. Besides MMORPGs, we
have made substantial progress in games under brand new genres such as the
recent release of an upgraded single-player campaign version of Glorious
Mission, which has exceeded our expectations by attracting over a million
downloads. We believe these strong third quarter results offer a first look at
the new revenue growth profile based on which we expect our future earnings
and growth.

"As a pivotal business initiative, we have also made progress developing our
webgame pipeline, which is part of our diversification efforts. For example,
we anticipate the commercial launch of two webgames in the first quarter 2013.
Even as we invest in growing our business by introducing new game types, while
also exploring new markets and user bases, we continue to successfully
maintain growth rates and profitability that exceed the industry average.

"Finally, our Company is positioned for long-term growth as we continue to
exercise our multi-year plan to broaden our user base by diversifying our game
portfolio, increasing our distribution through the leveraging of our strong
relationships with internet platform partners, and increasing our geographic
footprint through developing and licensing innovative new games. I have never
been more excited about the future of Giant and am confident that the new
games in our pipeline will enable us to reach new levels of success and
growth."

Third Quarter Fiscal 2012 Unaudited Financial Results 

Net Revenue. Net revenue for the third quarter 2012 was RMB543.2 million
(US$86.4 million), representing a 2.8% increase from RMB528.2 million in the
second quarter 2012, and an 18.6% increase from RMB457.9 million in the third
quarter 2011.

Revenue from online games in the third quarter 2012 totaled RMB523.8 million
(US$83.3 million), representing a 3.5% increase from RMB505.9 million in the
second quarter 2012, and an 18.0% increase from RMB443.9 million in the third
quarter 2011. The sequential and year-over-year increases in online game net
revenue were mainly due to the growth of the ZT Online franchise.

APA for online games in the third quarter 2012 was to 2,241,000, representing
a 1.1% sequential increase and a 7.4% increase over the third quarter 2011.
The sequential and year-over-year increases in APA were mainly due to an
increase in ZT Online 2 users. ARPU for online games in the third quarter 2012
was RMB238, representing a 2.4% sequential increase and a 9.6% increase over
the third quarter 2011. The slight sequential and year-over-year increases in
ARPU were due to ZT Online 2 users spending more as they progress through the
game. ACU for online games in the third quarter 2012 was 694,000, representing
a 1.3% sequential increase and a 4.9% increase over the third quarter 2011.
PCU for online games in the third quarter 2012 was 2,328,000, representing a
0.9% sequential increase and a 1.4% increase over the third quarter 2011. The
slight sequential and year-over-year increases in ACU and PCU were mainly due
to the continual popularity of the ZT Online franchise.

Cost of Services. Cost of services for the third quarter 2012 was RMB75.1
million (US$12.0 million), representing a 12% increase from the second quarter
2012 and an 18.7% increase from the third quarter 2011. The sequential and
year-over-year increases in cost of services were mainly due to an increase in
value-added tax payable as a result of increased game card sales to
distributors in connection with a holiday promotion, and an increase in
compensation for technical operations and customer service staff.

Gross Profit and Gross Margin. Gross profit for the third quarter 2012 was
RMB468.1 million (US$74.5million), representing a 1.5% increase from the
second quarter 2012 and an 18.6% increase from the third quarter 2011. Gross
margin for the third quarter 2012 was 86.2%, down from 87.3% in the second
quarter 2012, and remained flat compared with the third quarter 2011.

Operating Expenses. Total operating expenses for the third quarter 2012 were
RMB141.7 million (US$22.6 million), representing a 6.4% increase from RMB133.2
million in the second quarter 2012 and a 24.7% increase from RMB113.7 million
in the third quarter 2011. As a percentage of revenue, total operating
expenses were 26.1% for the third quarter 2012, compared to 25.2% in the
second quarter 2012 and 24.8% in the third quarter 2011.The sequential
increase in operating expenses was mainly attributable to a decrease in
financial incentives received from the government, which are recorded as an
offset to operating expenses. The year-over-year increase was mainly due to
share-based compensation expenses related to restricted shares granted at the
end of November 2011, as well as the general increase in cash compensation
including raises and performance based bonuses.

Research and product development ("R&D") expenses for the third quarter 2012
was RMB76.1 million (US$12.1 million), representing a 5.6% decrease from
RMB80.6 million in the second quarter 2012 and a 55.5% increase from RMB48.9
million in the third quarter 2011. As a percentage of revenue, R&D expenses
were 14.0% for the third quarter 2012, compared to 15.3% in the second quarter
2012 and 10.7% in the third quarter 2011. The sequential decrease in R&D
expenses was mainly attributable to higher expenses in the second quarter 2012
associated with certain game projects that were no longer being capitalized,
and the lack of such expenses in the third quarter 2012. The year-over-year
increase was primarily due to increased compensation for R&D employees and
share-based compensation expenses related to restricted shares granted at the
end of November 2011.

Sales and marketing ("S&M") expenses for the third quarter 2012 were RMB37.4
million (US$5.9 million), representing a 21.6% decrease from RMB47.7 million
in the second quarter 2012, and a 24.7% decrease from RMB49.6 million in the
third quarter 2011. As a percentage of revenue, S&M expenses were 6.9% in the
third quarter 2012, compared to 9.0% in the second quarter 2012 and 10.8% in
the third quarter 2011. The sequential decrease in S&M expenses was due to the
higher marketing expenses incurred in the second quarter 2012 to promote the
first expansion pack of ZT Online 2. The year-over-year decrease in S&M
expenses was due to marketing expenses incurred in the third quarter 2011
related to the open beta testing of ZT Online 2.

General and administrative expenses ("G&A") for the third quarter 2012 were
RMB38.3 million (US$6.1 million), representing a 0.3% increase from RMB38.2
million in the second quarter 2012, and a 52.2% increase from RMB25.2 million
in the third quarter 2011. As a percentage of revenue, G&A expenses were 7.0%
in the third quarter 2012, compared to 7.2% in the second quarter 2012 and
5.5% in the third quarter 2011. The sequential increase in G&A expenses was
minimal, and the year-over-year increase was mainly attributable to the
share-based compensation expenses related to the restricted shares granted at
the end of November 2011.

Government Financial Incentives. The government financial incentives, which
mainly relate to the refund of business tax, value-added tax, and enterprise
income tax from the Shanghai municipal government, was RMB10.0 million (US$1.6
million) in the third quarter 2012. The Company records these government
financial incentives as a reduction in operating expenses.

Interest Income. Interest income for the third quarter 2012 was RMB31.3
million (US$5.0 million), representing a 21.9% increase from RMB25.6 million
in the second quarter 2012, and a 20.9% decrease from RMB39.5 million in the
third quarter 2011. The sequential increase in interest income was mainly due
to the growing cash balance and higher returns on several short-term
investments during the current quarter, while the year-over-year decrease was
due to the Company's lower cash balances after the payment of the
one-time special cash dividend of US$707.9 million or US$3.00 per ADS or
ordinary share in September 2011.

Income Tax. Income tax expense for the third quarter 2012 was RMB30.9 million
(US$4.9 million), compared to income tax expense of RMB36.3 million in the
second quarter 2012 and income tax benefit of RMB19.3 million in the third
quarter 2011. Income tax expense decreased sequentially mainly due to a
decrease in our consolidated effective tax rate,but increased year-over-year
due to the recognition of RMB63.0 million in deferred tax assets (an increase
in deferred tax asset on the balance sheet and a corresponding income tax
benefit on the income statement) in the third quarter 2011.

Net Income Attributable to the Company's Shareholders. Net income
attributable to the Company's shareholders for the third quarter 2012 was
RMB311.7 million (US$49.6 million), representing a 1.4% increase from RMB307.2
million in the second quarter 2012, and a 13.7% decrease from RMB361.3 million
in the third quarter 2011. The sequential increase in net income attributable
to the Company's shareholders was mainly due to the increase in online game
revenue, partially offset by the decrease in government financial incentives.
The year-over-year decrease was a result of (a) a significant increase in
income tax expense, which reflected an income tax benefit in the third quarter
of 2011 due to the one-time recognition of RMB63.0 million in deferred tax
assets, (b) a decrease in other income of RMB19.0 million which was mainly
due to foreign exchange gains as the Company obtained a more favorable
exchange rate for the repatriation of cash for the special cash dividend paid
during the third quarter 2011, and (c) a significant increase in net income
attributable to non-controlling interest, which reflected the financial
results of the reorganization of the Company's game development studios. The
margin of net income attributable to the Company's shareholders was 57.4% for
the third quarter 2012, compared to 58.2% in the second quarter 2012 and 78.9%
in the third quarter 2011.

Non-GAAP net income attributable to the Company's shareholders for the third
quarter 2012 was RMB342.5 million (US$54.5 million) representing a 0.9%
increase from RMB339.4 million in the second quarter 2012, and a 20.2%
increase from RMB284.9 million in the third quarter 2011. As described in
further detail in the reconciliation table below, non-GAAP net income
attributable to the Company's shareholders excludes non-cash share-based
compensation expense, as well as the one-time items from the third quarter
2011 relating to recognition of additional deferred tax assets and foreign
exchange gains on the payment of a special dividend. The margin of non-GAAP
net income attributable to the Company's shareholders was 63.0% for the third
quarter 2012, compared to 64.3% in the second quarter 2012 and 62.2% in the
third quarter 2011.

Cash and  Cash Equivalents and Short-Term Investments. As of September 30,
2012, the Company's cash and cash equivalents and short-term investments
totaled RMB2,337.7 million (US$372.0 million), compared to RMB1,998.7 million
as of June 30, 2012. The sequential increase was primarily due to the growth
of the Company's game operations and effective cost controls.

Cash Dividend. The Board of Directors has approved, beginning in 2013, a
change in the Company's payment of cash dividends to the Company's
shareholders from on an annual basis to on a semi-annual basis. The payment
amounts and dates are subject to approval by the Board of Directors and
compliance with applicable laws.

Business Highlights and Outlook

Existing Games

ZT Online 1 Series – During the third quarter 2012, the Company held several
ZT Online PK tournaments and introduced new gameplay designed to encourage
interaction among gamers, both of which received positive feedback from
gamers. The Company also plans to launch an expansion pack for ZT Online in
the first quarter 2013. In addition, the Company released a selection of new
ZT Online Classic Edition gameplay centered on farming and guild functions
and, for the ZT Online Green Edition, optimized the pet raising and equipment
upgrading systems.

ZT Online 2 – In August, the Company launched the first part of a new ZT
Online 2 expansion pack to attract gamers during the summer holiday. The first
part of the expansion pack included new in-game activities and gameplay that
were well received by gamers. During the fourth quarter, the Company will
release the second part of the much anticipated expansion pack, which includes
two new professions and additional in-game activities. The micro-client
version of ZT Online 2 has gained positive momentum since the beginning of its
testing on Qihoo 360's platform in September. The Company plans to add
additional servers for the micro-client version during the fourth quarter
2012.

Elsword – In third quarter 2012, the Company released a new expansion pack for
Elsword during the summer holiday that was directed towards younger gamers and
increased user activity for the game. In the fourth quarter 2012, the Company
plans to introduce another expansion pack to commemorate the first anniversary
of the game's commercial launch in order to further boost momentum.

Allods Online – Allods Online began its closed beta testing on August 30, 2012
and its performance has met with the Company's expectations. Its 3D
western-style fantasy and science fiction theme has also helped attract a more
diverse user base. The Company expects to launch its first expansion pack in
the fourth quarter 2012.

Pipeline Games

World of Xianxia -  World of Xianxia is a self-developed 3D Chinese
fantasy-style MMORPG with an ancient Chinese mythological theme. The game
allows users to compete against each other as part of small groups. In
September 2012, the Company conducted the second round of engineering testing
with limited accounts. The testing results have been positive, demonstrating
the high quality of the game and its ability to continuously attract and
engage gamers. The development team is currently working to improve new
gamers' experience based on user feedback and add additional content to the
game. The Company plans to begin unlimited closed beta testing in the fourth
quarter 2012, supported by large scale marketing campaigns in March or April
2013.

Webgames - Genesis of the Empire is an action role playing game ("ARPG") based
on the Three Kingdoms period of ancient Chinese history. The Sky is an ARPG
incorporating core gameplay mechanics from the ZT Online series. The Company
conducted engineering testing for both games in the third quarter 2012 and
expects to commercially launch the games in the first quarter 2013.

Glorious Mission –  Glorious Mission is the Company's first self-developed
first person shooter ("FPS") game and is currently the only game in the world
that is playable from the perspective of China's military, the People's
Liberation Army ("PLA"). During the third quarter 2012, the Company released
an upgraded single-player campaign version of the game based on the version
the Company delivered to the PLA in June 2011, which has attracted over one
million downloads. The development team is working on the online version and
the Company is targeting the first quarter 2013 for an engineering testing.

Fourth Quarter 2012 Guidance — The Company expects sequential growth to be
higher in the fourth quarter 2012 when compared to the third quarter 2012 due
to contributions from multiple new games.

Conference Call

Giant's senior management will host a conference call on November 13, 2012 at
8:00 pm (US Eastern Time) / 5:00 pm (US Pacific Time), which is November 14,
2012 at 9:00 am (Beijing Time) to discuss its 2012 third quarter financial
results and recent business activities.

The conference call may be accessed using the following numbers:

US:            +1-866-519-4004
China:         400-620-8038
Hong Kong:     800-930-346
International: +65-6723-9381
Passcode:      Giant (or 44268)

Please dial in approximately 10 minutes before the scheduled time of this
call.

A replay of the conference call will be available starting 11:00 pm (US
Eastern Time) on November 13, 2012 through 11:00 pm (US Eastern Time) on
November 20, 2012 using the following numbers:

US:         +1-866-214-5335
Outside US: +61-2-8235-5000
Passcode:   58638554

A live webcast of the conference call and replay will be available on the
investor relations page of Giant Interactive Group's website at
http://www.ga-me.com/earningsannouncements.php.

Currency Convenience Translation

This earnings press release contains translations of certain Renminbi (RMB)
amounts into US dollars (US$) at the rate of US$1.00 to RMB6.2848, which was
the noon buying rate as of September 30, 2012 in the City of New York for
cable transfers in Renminbi per US dollar as certified for customs purposes by
the Federal Reserve Bank of New York.The Company makes no representation that
the Renminbi or US dollar amounts referred to in this release could have been,
or could be, converted into US dollars at such rate or at all.

Use of Non-GAAP Financial Measures

The Company has reported net income attributable to the Company's shareholders
for the period indicated below on a non-GAAP basis excluding non-cash
share-based compensation, recognition of additional deferred tax assets, and
foreign exchange gains on the payment of a special dividend. The Company
believes that both management and investors benefit from referring to these
non-GAAP financial measures in assessing the performance of the Company as
well as when planning and forecasting future periods.

Readers are cautioned not to view non-GAAP results on a stand-alone basis or
as a substitute for results under GAAP, or as being comparable to results
reported or forecasted by other companies, and should refer to the
reconciliation of GAAP results with non-GAAP results in the attached financial
information.

The table below sets forth the reconciliation of GAAP measures to non-GAAP
measures for the indicated periods:

Giant Interactive Group Inc.
Reconciliation of GAAP to Non-GAAP (Unaudited)
                     Three months ended
                     September30,   June 30,     September30,  September30,
                     2011            2012         2012           2012
                     (RMB)           (RMB)        (RMB)          (US$)
GAAP net income
attributable to the  361,274,260     307,217,574  311,659,943    49,589,478
Company's
shareholders:
Share-based          6,301,546       32,181,526   30,827,515     4,905,091
compensation
Recognizing
additional deferred  (63,240,829)    -            -              -
tax assets
Foreign exchange
gains on the payment
of a                 (19,437,460)    -            -              -

special dividend
Non-GAAP net income
attributable to the
                     284,897,517     339,399,100  342,487,458    54,494,569
Company's
shareholders:
Non-GAAP earnings
per share:
Basic                1.22           1.43          1.45           0.23
Diluted              1.21           1.40          1.41           0.22
Weighted average
ordinary shares:
Basic                233,989,130    236,700,106   236,534,154    236,534,154
Diluted              235,648,260    243,280,108   243,395,859    243,395,859

Statement Regarding Unaudited Condensed Financial Information

The unaudited financial information set forth above is preliminary and subject
to potential adjustments.Adjustments to the consolidated financial statements
may be identified when audit work has been performed for the Company's
year-end audit, which could result in significant differences from this
preliminary unaudited condensed financial information.

About Giant Interactive Group Inc.

Giant Interactive GroupInc. (NYSE: GA) isa leading online game developer and
operator in China in terms of market share, and focuses on massively
multiplayer online role playing games.Currently, Giant operates multiple
games, including the ZT Online 1 Series, ZT Online 2, Giant Online, XT Online,
The Golden Land, Elsword, and Allods Online. The Companyhas built a
nationwide distribution network to sell the prepaid game cards and game points
required to play the Company's games.For more information, please visit Giant
Interactive Group on the web at www.ga-me.com.

Safe Harbor Statement

Statements in this release contain "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and as defined in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates" and
similar statements and among others, include statements regarding the
Company's expectation for sequential growth in the fourth quarter 2012, the
ability of the Company to introduce new game types to maintain its growth
rates and profitability that exceed the industry average, the ability of the
Company to successfully diversify its revenues, the sustained progress and
performance of ZT Online 2 after the launch of its first new expansion pack
and micro-client version, the sustained growth and diversity of the Company's
user base after the launch, distribution and testing of pipeline games,
including MMO games, that are part of the Company's portfolio diversification
strategy, the ability for World of Xianxia to become another blockbuster
MMORPG of the Company, the ability of the Company to implement its strategy in
connection with webgames such as the expected commercial launches of Genesis
of the Empire and The Sky, and the timetable for testing and release of new
games and expansion packs in the Company's game pipeline. These
forward-looking statements are not historical facts but instead represent only
our belief regarding future events, many of which, by their nature, are
inherently uncertain and outside of our control.Our actual results and
financial condition and other circumstances may differ, possibly materially,
from the anticipated results and financial condition indicated in these
forward-looking statements.Among the factors that could cause our actual
results to differ from what the Company currently anticipates may include a
deterioration in the performances of the ZT Online 1 Series and ZT Online 2,
unexpected delays in developing expansion packs or in the timetable for
testing and launching our games, our dependence on ZT Online 1 Series and ZT
Online 2, which currently account for the majority of our historical net
revenues, failure of our webgames, MMO pipeline games, first FPS game or other
diversification or distribution efforts to grow as successful as expected, our
uncertainties with respect to the PRC legal and regulatory environments and
the volatility of the markets in which the Company operates. The financial
information contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in our annual
report on Form 20-F for the fiscal year 2011, as filed with the Securities and
Exchange Commission on April 23, 2012 and in our amended annual report on Form
20-F/A for fiscal year 2011, as filed with the Securities and Exchange
Commission on September 26, 2012; both of which are available on the
Securities and Exchange Commission's website at www.sec.gov.For additional
information on these and other important factors that could adversely affect
our business, financial condition, results of operations and prospects, see
"Risk Factors" beginning on page 6 of our annual report for fiscal year
2011.Our actual results of operations for the third quarter of 2012 are not
necessarily indicative of our operating results for any future periods.Any
projections in this release are based on limited information currently
available to the Company, which is subject to change.Although such
projections and the factors influencing them will likely change, the Company
undertakes no obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise, after the
date of this press release. Such information speaks only as of the date of
this release.



GIANT INTERACTIVE GROUP INC.
CONSOLIDATED BALANCE SHEETS
                                  Unaudited        Unaudited        Unaudited        Unaudited
                                  September30,    June 30,         September30,    September30,
                                  2011             2012             2012             2012
                                  (RMB)            (RMB)            (RMB)            (US$)
ASSETS
Current assets:
Cash and cash equivalents         1,608,527,647    804,654,944      1,017,685,858    161,928,121
Prepayments and other current     108,285,283      170,289,336      179,988,925      28,638,767
assets
Accounts receivable               14,032,361       17,051,202       12,082,488       1,922,494
Due from related parties         3,598,811        15,359,843       15,516,480       2,468,890
Inventories                       234,833          297,817          562,208          89,455
Deferred tax assets               187,550,300      162,858,572      164,684,388      26,203,600
Short-term investments            306,254,260      1,194,022,110    1,319,976,950    210,026,882
Total current assets              2,228,483,495    2,364,533,824    2,710,497,297    431,278,209
Non-current assets:
Property and equipment, net       159,836,437      336,615,015      343,946,307      54,726,691
Intangible assets, net            24,588,960       28,034,096       28,831,697       4,587,528
Due from research and development 7,637,000        12,637,000       12,637,000       2,010,724
entity partners
Goodwill                          22,201,960       22,201,960       22,201,960       3,532,644
Investment in equity investees    39,942,140       347,837,176      346,657,534      55,158,085
Long-term investment              29,495,239       39,331,600       39,331,600       6,258,210
Available-for-sale securities     399,097,693      346,218,997      345,966,664      55,048,158
Held-to-maturity securities       100,000,000      190,000,000      190,000,000      30,231,670
Deferred tax assets               10,371,229       22,329,767       23,666,048       3,765,601
Other assets                      276,220,919      19,374,293       35,987,666       5,726,143
Total non-current assets          1,069,391,577    1,364,579,904    1,389,226,476    221,045,454
Total assets                      3,297,875,072    3,729,113,728    4,099,723,773    652,323,663
LIABILITIES AND
SHAREHOLDERS'EQUITY
Current liabilities:
Payables and accrued expenses     186,607,355      144,414,604      172,464,838      27,441,579
Advances from distributors        102,658,418      75,732,035       88,701,101       14,113,592
Due to related parties           1,836,294        552,400          1,145,433        182,254
Deferred revenue                  522,406,376      497,149,174      502,029,007      79,879,870
Unrecognized tax benefit          42,967,121       47,579,967       47,579,967       7,570,641
Tax payable                       4,908,847        19,810,821       32,646,444       5,194,508
Deferred tax liabilities          155,810,298      111,844,191      112,482,669      17,897,573
Total current liabilities         1,017,194,709    897,083,192      957,049,459      152,280,017
Non-current liabilities:
Deferred tax liabilities          8,346,456        25,545,973       25,228,303       4,014,178
Total non-current liabilities    8,346,456        25,545,973       25,228,303       4,014,178
Total liabilities                 1,025,541,165    922,629,165      982,277,762      156,294,195
Shareholders' equity
Ordinary shares

(Par value US$0.0000002 per
share; 500,000,000 shares
authorized as at Sep 30, 2011,
June 30, 2012 and Sep 30, 2012
respectively; 273,110,626 shares  430              430              430              68
issued and 235,956,731 shares
outstanding at Sep 30,2011 ,
273,110,626 shares issued and
236,988,598 shares outstanding at
June 30, 2012, 273,110,626 shares
issued and 236,479,772 shares
outstanding at Sep 30, 2012)
Additional paid-in capital        4,336,278,339    4,448,772,557    4,483,677,511    713,416,101
Statutory                         43,890,273       14,125,819       14,125,819       2,247,616
reserves
Accumulated other comprehensive  (388,275,272)    (409,464,576)    (408,478,961)    (64,994,743)
loss
Retained earnings                 378,816,423      808,080,356      1,119,740,300    178,166,417
Treasury stock                    (2,099,580,756)  (2,122,597,526)  (2,145,387,206)  (341,361,254)
Total Giant Interactive Group     2,271,129,437    2,738,917,060    3,063,677,893    487,474,205
Inc.'s equity
Non controlling interest          1,204,470        67,567,503       53,768,118       8,555,263
Total shareholders'  equity       2,272,333,907    2,806,484,563    3,117,446,011    496,029,468
Total liabilities and             3,297,875,072    3,729,113,728    4,099,723,773    652,323,663
shareholders'  equity



GIANT INTERACTIVE GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                   Three months ended
                   September30,  June 30,       September30,   September30,
                   2011           2012           2012            2012
                   (RMB)          (RMB)          (RMB)           (US$)
                   Unaudited      Unaudited      Unaudited       Unaudited
Net revenue:
Online games       443,922,834    505,935,805    523,808,979     83,345,370
Licensing revenues 12,872,925     14,412,389     14,550,927      2,315,257
Other revenues,    1,092,202      7,868,368      4,869,426       774,794
net
Total net revenue  457,887,961    528,216,562    543,229,332     86,435,421
Cost of services   (63,310,384)   (67,099,146)   (75,139,809)    (11,955,800)
Gross profit       394,577,577    461,117,416    468,089,523     74,479,621
Operating
(expenses) income:
Research and
product            (48,895,557)   (80,557,569)   (76,055,754)    (12,101,539)
development
Sales and          (49,630,468)   (47,669,338)   (37,388,125)    (5,948,976)
marketing
General and        (25,155,496)   (38,179,977)   (38,290,384)    (6,092,538)
administrative
Government
financial          10,000,000     33,214,000     10,000,000      1,591,141
incentives
Total operating    (113,681,521)  (133,192,884)  (141,734,263)   (22,551,912)
expenses
Income from        280,896,056    327,924,532    326,355,260     51,927,709
operations
Interest income    39,505,643     25,647,412     31,266,605      4,974,956
Other income, net 25,557,006     13,888,822     6,578,424       1,046,720
Income before
income tax         345,958,705    367,460,766    364,200,289     57,949,385
expenses
Income tax expense 19,315,492     (36,255,506)   (30,860,090)    (4,910,274)
Share of loss of  (746,467)      (1,053,761)    (1,179,641)     (187,697)
equity investees
Net Income         364,527,730    330,151,499    332,160,558     52,851,414
Net income
attributable to    (3,253,470)    (22,933,925)   (20,500,615)    (3,261,936)
non controlling
interests
Net income
attributable to    361,274,260    307,217,574    311,659,943     49,589,478
the Company's
shareholders
Other
comprehensive
income (loss), net
of tax
Foreign currency
translation (loss) (29,652,528)   4,819,713      2,119,300       337,210
gain
Unrealized holding (4,749,315)    (20,059,373)   (1,133,685)     (180,385)
losses
Total other
comprehensive      (34,401,843)   (15,239,660)   985,615         156,825
income (loss), net
of tax
Comprehensive      326,872,417    291,977,914    312,645,558     49,746,303
income
Earnings per
share:
Basic              1.54           1.30           1.32           0.21
Diluted            1.53           1.26           1.28           0.20
Weighted average
ordinary shares:
Basic              233,989,130    236,700,106    236,534,154    236,534,154
Diluted            235,648,260    243,280,108    243,395,859    243,395,859

SOURCE Giant Interactive Group Inc.

Website: http://www.ga-me.com
Website: http://www.ga-me.com/earningsannouncements.php
Contact: Giant Interactive Group Inc., Rich Chiang, IR Director,
+86-21-3397-9959, ir@ztgame.com and Kristie Chen, IR Manager,
+86-21-3397-9971, ir@ztgame.com or Fleishman-Hillard, Hon Gay Lau,
+852-2530-0228, giantinteractive@fleishman.com
 
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