HONG KONG, Aug. 15, 2014 /PRNewswire/ — BAIOO Family Interactive Limited ("BAIOO" or the "Company"; stock code: 2100), China’s largest online entertainment destination designed for children, provided the following explanation about the impact on its 2014 First Half Results of the existence of its convertible redeemable preferred shares until April 10, 2014.
In its Announcement published on August 14, 2014, the Company, under IFRS accounting standards, reported a fair value loss of RMB327.7 million on its convertible redeemable preferred shares for the six months ended 30 June 2014 due to the continued increase in the equity value of the Company.
After the Company’s IPO on April 10, 2014, the convertible redeemable preferred shares were converted into common shares of the Company and ceased to exist.
As a result, from this date on, the need to record adjustments for gain(s) or loss(es) in fair value has ceased to exist and no such adjustment will impact the Company’s results for the second half of 2014.
This is why the Company has chosen to focus on its adjusted net profit (up 20.7% year over year) as management believes it better reflects the fundamental performance of the business, currently and going forward.
Fair value Loss of convertible redeemable preferred shares does not result in any forms of cash payment or payable to any parties.
The Company operates the largest online entertainment destination designed for children as measured by revenue in 2013. Its web portal page, 100bt.com, is a centralized platform for interactive children’s content through which users can access all six of its virtual worlds and entertainment, e-learning and other products and services using one registered account. Representing its core brand values of "Dreams, Friendship and Development," BAIOO’s virtual worlds and their characters have gained strong awareness among children and parents in China. As the leading provider of interactive online content for children in China, the Company has accumulated an extensive knowledge base and deep understanding of children’s behavior and needs with respect to online activity and consumption. Through BAIOO’s commitment to create a safe and fun environment with age-appropriate content and its understanding of children’s needs, the Company’s products and services have gained the trust of parents and regulators. Leveraging the Company’s competitive strengths, BAIOO plans to pursue a variety of growth strategies, including increasing its addressable market, expanding its online product offerings, strengthening its brand, and continuing to execute its mobile strategy. The Company also intends to leverage its strong brand recognition, expertise in the industry and unique product development and operating model to expand into new international markets over time and is committed to maximizing shareholder value over time.