BRIEF: CMGE forecasts first-half loss up to $90 million
Game operator CMGE Technology Group Ltd. (0302.HK) said on Tuesday it expects to report a net loss of up to 650 million yuan ($90 million) for the first half of this year, widening from a 241 million yuan loss in the same period a year earlier.
The company said its overseas business posted significant year-over-year growth for the period. But its domestically developed flagship game, “Legend of Sword and Fairy: World” underperformed following its February launch, leading to a 40% year-on-year decline in first-half revenue. CMGE also recorded write-offs related to prepaid license fees for some games before their launch, as well as an increase in fair value losses on its financial assets. In addition, the company recorded substantially higher sales and distribution expenses during the six-month period due to increased promotional spending.
Shares of CMGE opened down 14% at HK$0.54 on Wednesday. The stock is down over 50% from its 52-week high .
By Lau Chi Hang
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