China Mobile Games And Entertai (NASDAQ:CMGE)

HONG KONG, Aug. 10, 2015 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, announced today the completion of the merger (the "merger") with Pegasus Merger Sub Limited ("Merger Sub"), a wholly-owned subsidiary of Pegasus Investment Holdings Limited ("Parent"), pursuant to the agreement and plan of merger (the "merger agreement") dated June 9, 2015 by and among Parent, Merger Sub and the Company. As a result of the merger, the Company ceased to be a publicly traded company and became a wholly-owned subsidiary of Parent.

Under the terms of the merger agreement, each of the Company's class A ordinary shares, par value US$0.001 per share (the "Class A Shares") and each of the Company's class B ordinary shares, par value US$0.001 per share (together with the Class A Shares, the "Shares"), issued and outstanding immediately prior to the effective time of the merger, has been canceled in exchange for the right to receive US$1.5714 in cash without interest, and, for the avoidance of doubt, each of the Company's American depositary shares, each representing fourteen Class A Shares (the "ADSs") issued and outstanding immediately prior to the effective time of the merger has been canceled in exchange for the right to receive US$22.00 in cash without interest (less US$0.05 per ADS cancellation fee pursuant to the terms of the ADS depositary agreement).

Shareholders of record as of the effective time of the merger who are entitled to the merger consideration will receive a letter of transmittal and instructions on how to surrender their share certificates in exchange for the merger consideration. Shareholders should wait to receive the letter of transmittal before surrendering their share certificates. As soon as practicable after the date of this announcement, The Bank of New York Mellon, in its capacity as ADS depositary (the "ADS Depositary") will call for the surrender of all ADSs for delivery of the merger consideration. Upon the surrender of ADSs, the ADS Depositary will pay to the surrendering holders US$22.00 per ADS surrendered in cash without interest (less US$0.05 per ADS cancellation fee pursuant to the terms of the ADS deposit agreement).

The Company also announced today that it has requested that trading of its ADSs on the NASDAQ Global Market (the "NASDAQ") be suspended. The Company requested the NASDAQ to file Form 25 with the United States Securities and Exchange Commission (the "SEC") notifying the SEC of the delisting of its ADSs on the NASDAQ and the deregistration of the Company's registered securities. The Company intends to terminate its reporting obligations under the Securities Exchange Act of 1934, as amended, by filing Form 15 with the SEC in ten days. The Company's obligations to file or furnish with the SEC certain reports and forms, including Form 20-F and Form 6-K, will be suspended immediately as of the filing date of the Form 15 and will cease once the deregistration becomes effective.

HONG KONG, July 27, 2015 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, announced today that, at an extraordinary general meeting held today, the Company's shareholders voted in favor of, among others, the proposal to authorize and approve the previously announced agreement and plan of merger (the "merger agreement") dated June 9, 2015 and among Pegasus Investment Holdings Limited ("Parent"), Pegasus Merger Sub Limited ("Merger Sub") and the Company, pursuant to which Merger Sub will be merged with and into the Company with the Company continuing as the surviving company as a wholly-owned subsidiary of Parent after the merger (the "merger"), and to authorize and approve any and all transactions contemplated by the merger agreement, including the merger.

Immediately after the completion of the merger, Parent will be beneficially owned by the affiliates of Orient Hongtai Zhihe (Beijing) Investment Management Co., Ltd. (a controlled affiliate of Orient Securities Company Limited), ChangJiang Growth Capital Investment Co., Ltd. (a subsidiary of Changjiang Securities Company Limited) and Beijing HT Capital Investment Management Co., Ltd.

Approximately 65% of the Company's total outstanding voting ordinary shares voted in person or by proxy at today's extraordinary general meeting. Of the voting power represented by these ordinary shares voted in person or by proxy at the extraordinary general meeting, approximately 99% were voted in favor of the proposal to authorize and approve the merger agreement and any and all transactions contemplated by the merger agreement, including the merger. A two-thirds majority of the voting power represented by the ordinary shares of the Company present and voting in person or by proxy at the extraordinary general meeting was required for approving the merger.

The parties currently expect to complete the merger as soon as practicable, subject to the satisfaction or waiver of the conditions set forth in the merger agreement. Upon completion of the merger, the Company will become a privately held company and its American depositary shares will no longer be listed on the Nasdaq Global Market ("NASDAQ").

• Revenues were RMB441.8 million (US$71.3 million¹), compared with RMB214.7 million in the first quarter of 2014 and RMB417.8 million in the fourth quarter of 2014, and exceeded guidance for the quarter of RMB435.0 million by approximately 1.6%. Revenues were 105.8% higher year-over-year and 5.7% higher quarter-over-quarter.
• Non-GAAP basic and diluted earnings per ADS were RMB2.71 (US$0.44) and RMB2.59 (US$0.42), respectively, compared with non-GAAP basic and diluted earnings per ADS of RMB1.39 and RMB1.29, respectively, in the first quarter of 2014. Non-GAAP basic and diluted earnings per ADS were RMB2.81 and RMB2.66, respectively, in the fourth quarter of 2014.

Mr. Ken Jian Xiao, Chief Executive Officer of CMGE, said, "Heading into 2015, we are facing challenges, particularly, we are seeing increased competition in both publishing and self-developed game businesses. Despite these headwinds, I am pleased to see that our revenue growth remains steady with quarter-over-quarter growth at 5.7%."

"The Company's social games have continued to perform solidly in the first quarter of 2015, including San Guo Wei Li Jia Qiang Ban (三国威力加强版), Super Hero (超级英雄) and Crisis Action (全民枪战). Another unique 3D dance-themed game, Charming Dancer (天天炫舞), began its closed beta testing on January 21, 2015. In early February, the company published Uncharted Waters V (大航海时代5) in cooperation with Tecmo Koei. Uncharted Waters V (大航海时代5) became one of the few successful Japanese mobile games published in China in the first quarter of 2015."

"During the first quarter of 2015, the Company's overseas publishing business made progress.Blood Reincarnation (战国阴阳师) was published in Taiwan. Age of Tank (坦克世界) was published in Russia and Korea and has been distributed on KAKAO Talk in Korea. In addition, the Company published Super Hero (超级英雄) on February 10, 2015 in Thailand. The Company also published Rise of Darkness (全民破坏神) in North America on both Android and iOS on May 20, 2015. Rise of Darkness (全民破坏神) is an MMORPG mobile game published by Tencent in Mainland China, for which the Company has the rights to publish in the United States, Canada, Australia and the United Kingdom. The Company currently has a strong publishing pipeline in mainland China as well as overseas. In particular, the Company is cooperating with Disney and has obtained rights to publish the combat strategy mobile game Star Wars ^TM: Commander in Mainland China, Hong Kong, Macau and Taiwan."

"In late January, the Company published Pleasant Goat and Big Big Wolf Rush (喜羊羊快跑) ("Pleasant Goat"), the world's first 3D running game that Company co-developed based on thePleasant Goat IP rights that it acquired. In its first day of launch, Pleasant Goat reached 2.85 million downloads. We began closed beta testing of New Legend of Sword and Fairy (新仙剑奇侠传), co-developed with Softstar Technology (大宇资讯), on April 9, 2015. In addition, the Company has a number of games in various stages of development, both self-developed and co-developed, based on IP rights that the Company has obtained. Beginning in June, the Company is planning to start closed beta testing for Si Da Ming Bu Da Dui Jue (四大名捕大对决), Naruto: Shinobi Masters (火影忍者: 忍者大师), One Piece: The Path of Powers (航海王), Shaolin Temple (少林寺),Ze Tian Ji (择天记), The Creator (无间狱), Hello Kitty (凱蒂猫) and Samurai Showdown (侍魂)."

HONG KONG, May 27, 2015 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, today announced that it has entered into cooperation with Disney and obtained rights to publish the combat strategy mobile game Star Wars(TM): Commanderin Mainland China, Hong Kong, Macau and Taiwan. CMGE has been entrusted to perform game localization and development. Based on Lucasfilm's Star Wars(TM) film franchise, players will strategically build their base and rise through the ranks as a powerful battlefield commander in this exciting game of strategy and competitive combat. Star Wars: Commander was the top ranked iPad Free App and ranked No. 4 Free App on overall Apple's App Store.

HONG KONG, May 20, 2015 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (Nasdaq:CMGE), the largest publisher and a leading developer of mobile games in China, today announced that Chengdu Zhuoxing Technology Co., Ltd. ("Chengdu Zhuoxing"), a subsidiary of one of the Company's variable interest entities, has entered into an agreement to restructure and sell a portion of its interest in Beijing Zhuoyuechenxing Technology Co., Ltd. ("Beijing Zhuoyuechenxing"), a subsidiary of Chengdu Zhuoxing, to Tianjin Zhuoyue Mobile Technology Co., Ltd. ("Tianjin Zhuoyue"), a company controlled by Mr. Shuling Ying, the Company's chief operating officer. The Company also announced that Mr. Ying will leave his current position to assume the role of chief executive officer of Beijing Zhuoyuechenxing. This strategic restructuring is intended to increase the profitability of Beijing Zhuoyuechenxing, previously an inactive subsidiary, and to enable CMGE to benefit from Mr. Ying's leadership developing and managing the business of the newly restructured Beijing Zhuoyuechenxing.

Mr. Ken Jian Xiao, chief executive officer of CMGE, stated, "I am confident that this strategic restructuring of Beijing Zhuoyuechenxing will benefit the Company in the long run. We believe that elevating Mr. Ying to the role of a strategic partner will help ensure the development of Beijing Zhuoyuechenxing's business and maximize our return in this strategic investment."

Under the agreement, Chengdu Zhuoxing will sell up to 51% of its equity interest in Beijing Zhuoyuechenxing to Tianjin Zhuoyue over a period of three years for a total consideration of RMB130 million, including a RMB20 million contribution to Beijing Zhuoyuechenxing's share capital. Chengdu Zhuoxing will also transfer the operations of two social games to Beijing Zhuoyuechenxing: Crisis Action and Charming Dancer. If Beijing Zhuoyuechenxing fails to achieve profit targets of RMB45 million, RMB80 million and RMB107 million for 2015, 2016 and 2017, respectively, Tianjin Zhuoyue will return to Chengdu Zhuoxing up to 25% of its shares in Beijing Zhuoyuechenxing without consideration. Under the agreement, CMGE will obtain the right to appoint members to the Beijing Zhuoyuechenxing board of directors and will also hold a right of first refusal and co-sale rights.

HONG KONG, May 18, 2015 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (Nasdaq:CMGE), the largest publisher and a leading developer of mobile games in China, today announced that its Board of Directors (the "Board") has received a preliminary non-binding proposal from Orient Hongtai (Beijing) Investment Management Co., Ltd. ("Orient Investment"), a subsidiary of Orient Securities Company Limited ("Orient Hongtai"), to acquire all of the outstanding shares of the Company, including ordinary shares represented by American depositary shares (the "ADSs"), for $1.5357 in cash per Class A or Class B ordinary share, or $21.5 in cash per ADS. A copy of the proposal letter is attached hereto as Exhibit A. Orient Investment has separately indicated to the Company that it has secured committed equity financing from certain of its affiliates and co-investors in an aggregate amount of RMB5 billion.

The proposal letter did not state any information pertaining to Orient Hongtai's or Orient Investment's current ownership of the Company's ordinary shares or ADSs. The Company is not aware through public filings or other documents that Orient Hongtai or Orient Investment may beneficially own 5% or more of the Company's ordinary shares. In addition, no members of the Board are affiliates of Orient Hongtai or Orient Investment.

• Revenues were RMB417.8 million (US$67.3 million¹), compared with RMB146.4 million in the fourth quarter of 2013 and RMB357.6 million in the third quarter of 2014.
• Non-GAAP basic and diluted earnings per ADS were RMB2.81 (US$0.45) and RMB2.66 (US$0.43), respectively, compared with non-GAAP basic and diluted earnings per ADS of RMB1.28 and RMB1.19, respectively, in the fourth quarter of 2013. Non-GAAP basic and diluted earnings per ADS were RMB2.67 and RMB2.54, respectively, in the third quarter of 2014.

"During 2014 we have achieved many significant milestones," said Mr. Ken Jian Xiao, Chief Executive Officer of CMGE. "First, we further advanced our leadership position in the China mobile game publishing industry, as reflected by our leading and expanding share of gross billings according to Analysys International. Second, we increased our revenue and Non-GAAP profitability sequentially and on a year-to-year basis. Finally, we significantly grew our player base, from 28.0 million MAUs in the fourth quarter of 2013 to 71.5 million MAUs in the fourth quarter in 2014."

As of December 31, 2014, the Company had over 1,500 employees, with offices located in Shenzhen, Guangzhou, Beijing, Chengdu, Shanghai, Hong Kong, Taipei, Tokyo and Seoul. The Company has grown rapidly in 2014 in both its publishing business and self-developed games. Moreover, throughout the course of the year, the Company has strengthened its intellectual property ("IP") and overseas strategy. Building on the core principles of "product innovation" and "user satisfaction," the Company has firmly established a diverse and comprehensive mobile gaming ecosystem that includes its self-developed games, publishing business, IP, game support platform and distribution platform.

Business Outlook

For the first quarter of 2015, the Company expects revenue of RMB435.0 million (US$70.1 million). This forecast reflects the Company's current and preliminary view on the estimated performance of its game portfolio and on the market and operational conditions, which may fluctuate and are subject to change.

Explanatory Note

This Amendment No. 1 on Form 20-F/A (this “Amendment No. 1”) to our annual report on Form 20-F for the year ended December 31, 2013, filed with the Securities and Exchange Commission on March 7, 2014 (the “2013 Form 20-F”), is filed to disclose our management’s annual report on internal control over financial reporting in Item 15. This Amendment No. 1 also includes new language in “Item 3. Key Information—D. Risk Factors” detailing the potential consequences of failing to disclose management’s annual report on internal control over financial reporting in the 2013 Form 20-F. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our chief executive officer and chief financial officer are being filed as exhibits to this Amendment No. 1. The amended portion of Item 19 Exhibits is repeated in this Amendment No. 1.

This Amendment No. 1 speaks as of the filing date of the 2013 Form 20-F on March 7, 2014. Other than as set forth above, this Amendment No. 1 does not, and does not purport to, amend, update or restate any other information or disclosure included in the 2013 Form 20-F or reflect any events that have occurred since March 7, 2014.

Part I

Item 3. KEY INFORMATION

D. Risk Factors

Our current ineligibility to use a Registration Statement on Form F-3 may affect our ability to access the public markets quickly to raise debt or equity capital.

As a result of the fact that we are amending our Form 20-F to correct an Item 15 disclosure deficiency, we are ineligible to register sales of our securities on the SEC’s short-form registration statement, Form F-3. We will not be eligible to use Form F-3 to conduct registered public offerings until our filings with the SEC have been timely made for 12 full months, assuming the other eligibility criteria are satisfied at that time. While we are ineligible to use Form F-3, which is faster and less costly to prepare, we will be required to file a long-form registration statement in order to effect a registered public offering. This will negatively affect our ability to access the public capital markets quickly and flexibly until we are once again eligible to use Form F-3. Furthermore, certain investors, for whom the ability to resell their shares relatively soon after they acquire them is important, may only be willing to participate in private financings by us if we can register their shares using a Form F-3. Therefore, our ineligibility to use Form F-3 may limit our ability to raise additional capital from such investors.

Part II

Item 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as of December 31, 2013. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures as of December 31, 2013 were not effective solely as a result of the material weaknesses in internal control over financial reporting as described below and in “Item 3. Key Information. D—Risk Factors— If we fail to maintain an effective system of internal control over financial reporting, we may lose investor confidence in the reliability of our financial statements.”

Management’s Annual Report on Internal Control over Financial Reporting

Our management, including our chief executive officer and chief financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

• pertain to maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;  
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and 
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Table of Contents

As required by Section 404 of the Sarbanes-Oxley Act and related rules as promulgated by the SEC, our management, including our chief executive officer and chief financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2013 using criteria established in “Internal Control—Integrated Framework (1992)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, our management concluded that, as of December 31, 2013, our internal control over financial reporting was not effective based on the above criteria as a result of a material weakness in internal control over financial reporting. The material weakness relates to insufficient personnel with U.S. GAAP expertise in the preparation and review of the financial statements and related disclosures in accordance with U.S. GAAP and the SEC reporting requirements. We have taken initiatives to improve and will continue to strengthen our internal control over financial reporting and disclosure controls. For details on these initiatives, please see “Item 5. Operating and Financial Review and Prospects—Internal Control Over Financial Reporting.”

Attestation Report of the Registered Public Accounting Firm

This annual report does not include a report of an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the SEC for emerging growth companies.

Changes in Internal Controls Over Financial Reporting

As described above and in “Item 3: Key Information—D. Risk Factors,” there was one material weakness identified in our internal control over financial reporting, which related to insufficient personnel with U.S. GAAP expertise in the preparation and review of the financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting requirements. In connection with the audit of our consolidated financial statements for the year ended December 31, 2013, we and our independent registered public accounting firm determined that the above-mentioned material weaknesses in our internal control over financial reporting continue to exist.

We have undertaken certain remedial steps to address the material weakness. For example, we have (i) provided and continue to provide additional training for our new and existing personnel by expanding the training program on U.S. GAAP financial statement preparation and financial reporting and (ii) hired additional staff with financial reporting experience. In particular, since the beginning of 2013 we have hired one finance manager, two assistant finance managers and one internal audit manager.

HONG KONG, March 4, 2015 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, today announced that it has been authorized by North Stars Pictures Inc., ("NSP") to develop mobile games based on the famous Japanese comics Fist of the North Star.

Fist of the North Star, drawn by Tetsuo Hara and written by Buronson, has been one of the most influential action comics came from Japan in the 20^th century. The masculine drawing style and cool fighting scenes have won world-wide popularity and millions of loyal fans. Fist of the North Star has been sold approximately 100 million copies around the world. Animation and games based on Fist of the North Star have also achieved success, continuing the expansion of its brand influence from the Asian market to the global market.

Based on the intellectual property ("IP") of Fist of the North Star, CMGE will develop and publish two mobile games in different styles. "We really appreciate the IP owner's trust and recognition on us. It is CMGE's another important IP with world-wide popularity; no doubt it will further enrich our IP resources and pipeline," said Xiao Jian, CEO of CMGE. "Since we launched the IP strategy in 2014, CMGE has acquired numerous top IP resources such as Naruto, One Piece, Dragon Ball Z, Samurai Shodown, Ikkyuu San, Hello Kitty, Pleasant Goat and Big Big Wolf, The King of Fighters 97, Shaolin Temple,etc. Many self-developed mobile games based on these IPs will be launched in the first half of 2015. Amongst which, Pleasant Goat and Big Big Wolf Rush was launched and has been doing very well. CMGE will continue to cooperate closely with global top IP owners and game developers and we will deliver more competitive mobile games to our world-wide players in the very near future. "

HONG KONG, Jan. 16, 2015 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, issued the following statement in response to allegations made by a short seller on January 15, 2015:

The Company believes that the allegations made contain numerous errors, unsupported speculation and incorrect interpretations of facts and circumstances.

Neither the Company nor, to the best of the Company's knowledge, any member of its management controls Shenzhen Zhongzheng Ruanyin Science & Technology Co., Ltd. ("Zhongzheng"), a mobile game advertising agent in China and the company at the center of the short seller's allegations. The Company's transactions with Zhongzheng have been conducted and will continue to be conducted in the ordinary course of business and on an arm's length basis. Moreover, the Company's revenue derived from business with Zhongzheng for the first three quarters of 2014 accounted for less than 1.0% of the Company's total revenue for the period, and payments made to Zhongzheng for the first three quarters of 2014 accounted for approximately 3.0% of the Company's operating expenses for the same period.

The Company intends to take all appropriate legal actions to defend itself against these malicious allegations and to protect the interest of its shareholders.

HONG KONG, Oct. 22, 2014 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, today announced that it has been authorized to develop mobile games based on twelve famous Sanrio characters including HELLO KITTY.

HELLO KITTY was created in 1974 and has become the best known character of Sanrio Co., Ltd, not only in Japan, but also worldwide. She has adorned countless conceivable products, as small as stickers, pens, toys and watches, and as large as computers, treadmills, cars and even theme parks. According to statistics, the image of HELLO KITTY has appeared on 50,000 kinds of product sold in more than 130 countries, and has been regarded as one of the most valuable characters in the world.

CMGE has been authorized to develop mobile game based on twelve Sanrio characters, including HELLO KITTY, BAD BADTZ-MARU, KEROKEROKEROPPI, MY MELODY, KUROMI, SUGARBUNNIES, POMPOMPURIN, LITTLE TWIN STARS, CINNAMOROLL, U-SA-HA-NA, PATTY & JIMMY and CHARMMY KITTY, and to publish in mainland China, HK, Taiwan and Macau.

Sanrio Co., Ltd was founded in 1960. In addition to licensing characters, Sanrio designs and sells products, produces and publishes books and videos, as well as music and live shows based on its extensive character portfolio.

"We appreciate the IP owner's dedication on the Chinese market. These excellent Japanese IPs are always attractive to Chinese users," said Xiao Jian, CEO of CMGE. "As the first mobile game company listed on Nasdaq, CMGE is working diligently to provide great mobile games to extensive players through strong IP co-operations and to improve its competitive advantage in the industry as well."

HONG KONG, Aug. 18, 2014 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, announced that effective today, Mr. Shuling Ying has been appointed as our new chief operating officer ("COO").

Mr. Ying's primary responsibility will be to supervise our mobile game publishing business for third party content providers. Mr. Ying previously served as our President from October 2013 to June 2014 and has extensive experience in the licensing, publishing, operation and marketing of mobile games and helping to manage our publishing business. Prior to joining our company, Mr. Ying had worked at the Shanghai branch of Standard Chartered Bank. Our previous COO, Mr. Hu Zhenyu, has been appointed as our Senior Vice President, effective today. Mr. Hu's primary responsibilities will be in our self-developed games division as well as assisting in the integration of all investment activities.

In addition, the Company has been informed that Mr. Ying and Mr. Ken Jian Xiao, our CEO and Director, intend to individually purchase RMB10 million each of the Company's American Depositary Shares ("ADSs"). The Company has been informed that the repurchases will be made in the open market at prevailing market prices or through privately negotiated transactions. The timing and extent of any purchases will be determined by Mr. Ying and Mr. Xiao and may depend upon market conditions, the trading price of ADS and other factors. Mr. Xiao and Mr. Ying have informed the Company that the share repurchases will be completed within two months of this press release and will be financed with their own personal funds.

CEO Mr. Xiao commented, "Management share purchases reflect the confidence that we have in CMGE's future and our ability to drive long-term growth."

Second Quarter 2014 Unaudited Financial Results

• Revenues were RMB274.6 million (US$44.3 million1), compared with RMB72.0 million in the second quarter of 2013 and RMB214.7 million in the first quarter of 2014. Revenues were 281.4% higher year-over-year and 27.9% higher quarter-over-quarter.
• Basic and diluted earnings per American depositary share3 ("ADS") were RMB1.76 (US$0.28) and RMB1.66 (US$0.27), respectively, compared with basic and diluted loss per ADS of RMB0.66 in the second quarter of 2013. Basic and diluted earnings per ADS were RMB1.26 and RMB1.16, respectively, in the first quarter of 2014.

Business Outlook

For the third quarter of 2014, the Company expects its total revenues to be between RMB 330 million and RMB350 million. This forecast reflects the Company's current and preliminary view on the estimated performance of our game portfolio and on the market and operational conditions, which may fluctuate and are subject to change.

HONG KONG, Aug. 14, 2014 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, today announced that the Independent Committee of the Board of Directors of the Company has completed its review of market rumors of possible bribery.

As previously announced, the Independent Committee was formed on June 20, 2014, and is comprised of the four independent directors of the Company.

The Independent Committee retained Simpson Thacher & Bartlett LLP to assist it in conducting the independent review.

The independent review included interviews with relevant personnel and a review of documents, digital information and data extract through procedures recommended by Simpson Thacher. The foregoing investigation did not find any evidence that suggested CMGE or anyone at CMGE had engaged in bribery.

The Independent Committee therefore advised CMGE's Board of Directors of the completion of its investigation.

HONG KONG, July 31, 2014 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, today announced that it has made exclusive strategic partnership with GREE, a famous Japanese social networking platform company, to co-develop the first official mobile game on Naruto in China. CMGE also has the rights to publish the game and combat piracy in China.

Naruto is a masterpiece of Japanese cartoonist Masashi Kishimoto and serialized on < Weekly Shonen Jump > from 1999. It has been translated into various languages and released in more than 30 overseas countries. Cumulative circulation of the original comic has reached more than 200 million globally. Its animation has been played in a number of countries and regions, with a high and world-class popularity.

"We are delighted to cooperate with GREE to co-develop and publish the official mobile game on Naruto in China. GREE, together with Shueisha Inc, TV Tokyo Corporation and Studio Pierrot, as the production committee (IP owner), recognize and trust the R&D and publishing capability of CMGE. We really appreciate that," said Xiao Jian, CEO of CMGE. "CMGE has been working diligently to provide great mobile games to extensive players. In our joint effort with GREE, we believe the official mobile game on Naruto will be launched in the fourth quarter this year. Warm-up activities will be started soon. Besides, we will start to clean up the pirated market in the meanwhile."

HONG KONG, June 30, 2014 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (CMGE), the largest publisher and a leading developer of mobile games in China, today announced that it has signed an exclusive licensing agreement with TECMO KOEI GAMES CO., LTD. ("TKG") to publish mobile game Uncharted Waters 5 in Mainland China for three years.

Uncharted Waters has been the classic simulation and role-playing game series on adventurous sailings and explorations firstly published during the year of 1990. The series up till Uncharted Waters 4 and Uncharted Waters Online have been very popular with a large cult following. After the release of Uncharted Waters 4 in 1999, it has been 15 years until the launch of the Uncharted Waters 5. The Uncharted Waters 5 will be released on PC, web-based and mobile game versions.

TKG is a famous Japanese gaming software company founded in 1978, and best known for its simulation games based on history. The series Nobunaga's Ambition, Romance of the Three Kingdoms, TaiKo Risshiden, and Uncharted Waters are all created against the backdrop of world history and their games have been very popular among Chinese speaking areas in the world.

"As the first mobile game company listed on Nasdaq in China, CMGE has extensive experience in mobile game publishing and operating. In 2013, CMGE was ranked No.1 mobile game publisher in terms of market share and successfully published many mobile games with monthly gross billing over RMB10 million," said Xiao Jian, CEO of CMGE. "We are dedicated to deliver competitive mobile games to players and games developed by TKG with strong historical and cultural background fulfill our target. We are delighted to cooperate with TKG and look forward to more cooperation in the future."

HONG KONG, June 26, 2014 (GLOBE NEWSWIRE) -- As announced on 20 June, 2014 by China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (Nasdaq:CMGE), the largest publisher and a leading developer of mobile games in China, there was an implementation of organizational restructuring and personnel changes in its game publishing business, one of the three business segments of the Company. The purpose of the restructuring is to streamline the Company's operations to better position it for profitable long-term growth.

Our CEO Mr. Xiao Jian believes that Mr. Ying Shuling and the other 8 executives job reassignments would be better utilized in other capacities. To the best of the Company's knowledge, the Company is currently unaware of any evidence of bribery. Nevertheless, in order to provide the highest level of transparency to its shareholders, the independent committee has been formed to look into and address the market speculations circulating in the market. An external law firm will be appointed to assist the independent committee. The Company will announce further update on the results of its independent committee's investigation.

HONG KONG, June 20, 2014 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (Nasdaq:CMGE), the largest publisher and a leading developer of mobile games in China, today announces the implementation of organizational restructuring and personnel changes in its game publishing business. The purpose of the restructuring is to streamline the Company's operations to better position it for profitable long-term growth.

The Company has made the transition from a feature phone game developer to a mobile game publisher and developing platform, leading to rapid growth.  Since Mr. Shuling Ying was asked to oversee the Company's publishing business in October 2013, its publishing business has grown significantly, and now has teams of over 700 employees located in Beijing, Shanghai, Shenzhen and Chengdu.  However, the Company's rapid growth has also created operational challenges that it must carefully manage, including redundancies within its businesses which have resulted in inefficiencies. To make the Company more efficient and competitive and to continue producing high quality and innovative products, and to ensure the Company is positioned to be profitable and achieve sustainable growth, the chief executive officer has been tasked with conducting organizational reviews and structural realignments.  As part of the organizational restructuring of its publishing business, on June 19, 2014 the Company removed nine employees from their positions in the publishing business, including Mr. Ying.  The Company notes that these employees are awaiting reassignments within the Company.  The Company does not expect this restructuring, including the personnel changes, to have a material adverse impact on the Company's overall operations.  The Company expects the restructuring will enhance its productivity, helping to strengthen its leading market position.

The Company is aware of market speculations about the reasons for the restructuring, including allegations of employee misconduct, which have led to significant fluctuations in its ADS price.  The Company announces that today its board of directors has authorized an independent committee, consisting solely of independent directors, to look into the market speculations.  In order to provide a high level of transparency to its shareholders, the Company will update shareholders on the results of its findings.

China Mobile Games and Entertainment Group Limited

Representing 48,188,000 Class A Ordinary Shares

We are offering 3,442,000 American Depositary Shares, or ADSs. Each ADS represents 14 Class A ordinary shares, par value US$0.001 per ordinary share.

Our ADSs are listed on the Nasdaq Global Market, under the symbol “CMGE.” The last reported sale price of our ADSs on March 20, 2014 was US$25.36 per ADS.  

HONG KONG, March 12, 2014 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (Nasdaq:CMGE), the largest publisher and a leading developer of mobile games in China, announced that on March 5, 2014, it had amended its quarterly financial information, which was originally furnished to the Securities and Exchange Commission on March 4, 2014, in order to correct earnings per American depositary share ("ADS") information. CMGE's basic and diluted earnings per ADS were RMB1.28 (US$0.21) and RMB1.18 (US$0.20), respectively, during the fourth quarter of 2013. CMGE's non-GAAP basic and diluted earnings per ADS, excluding (1) share-based compensation, and (2) goodwill and intangible assets impartment loss, were RMB1.30 (US$0.21) and RMB1.19 (US$0.20), respectively, during the fourth quarter of 2013.

Fourth Quarter 2013 Financial Results

• Total net revenues were RMB146.4 million (US$24.2 million), compared with RMB28.9 million in the fourth quarter of 2012 and RMB98.1 million in the prior quarter.
• Non-GAAP basic and diluted loss per ADS of RMB0.48 in the fourth quarter of 2012 and non-GAAP basic and diluted earnings per ADS of RMB0.98 in the third quarter of 2013.

"During 2013 we achieved many significant milestones," said Mr. Ken Jian Xiao, Chief Executive Officer of CMGE. "Foremost, we maintained our leadership position in the China mobile game publishing industry, as reflected by our leading share of gross billings according to Analysys International, a leading independent research firm on the technology, media and telecom industries in China. We achieved this by applying our mobile game and entertainment expertise to successfully expand our portfolio of popular social games that are designed for smartphones and tablets. We also regained profitability on a quarterly and annual basis with accelerating growth in revenue in the fourth quarter of 2013. In addition, we significantly grew our player base, which exceeded 130 million in 2013, with 27.5 million paying users for the full year.

"As of the end of December 2013, we licensed 51 social games in our publishing portfolio, of which 21 were exclusive licenses. In our licensing portfolio, our top three revenue grossing games in the fourth quarter of 2013 were Wu Xia Q Zhuan, San Guo Zhi Weili Jiaqiang Banand a Ninja-based card game. Our success in selecting top games for licensing, as well as our success in widely distributing licensed games, are significant achievements for our company.

"In the area of self-developed games, we released a very successful, high-quality poker and RPG games in 2013. Our self-developed social poker game, Joyful Da Ying Jia (also marketed as Joyful Zha Jin Hua) which we launched in March 2013, the first social poker game in our Joyful poker game series. This game not only obtained the "Golden Apple Award" by Shang Fang Wang, but also surpassed over RMB10.0 million in monthly gross billings from July to December of 2013 and had accumulated gross billings of RMB95.2 million in 2013. The success of Joyful Da Ying Jia, together with our other Joyful poker games releases, helped increase our registered users for the Joyful poker game series to 60 million in 2013. In addition, our self-developed MMORPG game, War Valley, received five top industry awards, including the Golden Plume Award by China Mobile Game Industry Annual Summit. We not only made War Valley popular in China, but also expanded it overseas to Korea. For a period of time in December 2013,War Valley was the most downloaded mobile game on T-Store, which is a popular application store in Korea. Beginning in the first quarter of 2014, we are working to introduce War Valley into other Asian markets."

Mr. Xiao continued "During 2013, we added over 200 people to grow our research and game development teams, which are located in Shenzhen, Beijing, Guangzhou and Chengdu. We also grew our distribution platform, both in terms of the number of channels and overall reach. Our distribution platform serves self-developed games as well as licensed games, and we have also entered into co-production agreements where CMGE funds some portion of production costs in exchange for various distribution rights (typically via a license agreement). CMGE runs one of China's strongest and most extensive mobile distribution channels in China. In addition to wide-scale pre-installations, CMGE has extensive distribution agreements with third-party application stores as well as all three mobile network operators."

Vice Chairman Hendrick Sin added "Our outlook for 2014 is promising, as we continue to expand our product portfolio, grow our distribution platform and expand into overseas markets. In terms of product pipeline, CMGE expects to launch approximately 15 self-developed social games and at least 30 third party social games with exclusive licenses. We are very excited about our pipeline, which includes RPG, card and poker games. In terms of our distribution platform, we continue to deepen our pre-installation channel and open additional app store platforms. Finally, we plan to expand significantly to overseas markets in 2014, with emphasis on Asian markets such as Taiwan, Hong Kong, Korea and other South East Asia. In conclusion, we are confident that with everyone's continued dedication, motivation and innovation, 2014 will be a very successful year for CMGE."

Mr. Ken Chang, CMGE's Chief Financial Officer, added "I am pleased to report that CMGE again achieved record quarterly revenue and significant improvement in financial and operational performance in the fourth quarter. Our game revenue grew 608.0% year-over-year or 64.5% quarter-over-quarter, with over 95.0% of revenue generated from smartphone games as compared to approximately 60.2% in the same period of last year. The growth was driven by the success of our self-developed games as well as our powerful distribution platform. Our operating data for social games was exceptional in the fourth quarter. Our social games are clearly the growth driver as they represented approximately 79.1% of total revenue, while paying users increased by over 13.0% sequentially. In addition, ARPU for social games increased to RMB36.6 in the fourth quarter from RMB24.9 in the third quarter. New registered users for the fourth quarter of 2013 were 59.9 million, of which approximately 93.6% were players of our social games. "

"Our gross profit margin improved to 63.1% in the fourth quarter of 2013, up from 58.3% in the third quarter of 2013, primarily due to higher revenues compared to certain fixed costs. Our operating expenses as a percentage of revenue decreased to 58.7% in the fourth quarter compared to 60.1% in the third quarter. As a result of the improvement in gross profit margin and reduction of operating expenses as a percentage of revenue, our operating income improved in the fourth quarter compared to the third quarter. For our 2014 outlook, I am very excited about our new product pipeline, our stronger distribution platform, and our continued expansion to overseas markets. Continued revenue growth combined with prudent expense management should drive further margin expansion in 2014."

Second Quarter 2013 Financial Results

• Revenues were RMB72.0 million (US$11.7 million¹), 18.6% and 97.3% increases compared with RMB60.7 million in the second quarter of 2012 and RMB36.5 million in the first quarter of 2013, respectively. The sequential quarterly growth in revenue was largely a result of increased revenue from mobile social games and the expansion of the Company's third-party game publishing business as well as an increase in the number of subscriptions to the Company's single-player game bundles.
• Net loss was RMB12.6 million (US$2.1 million), compared with net income of RMB23.4 million in the second quarter of 2012 and net loss of RMB21.6 million in the first quarter of 2013.
• Non-GAAP² net loss, excluding (1) share-based compensation expenses and (2) intangible assets impairment loss, was RMB3.9 million (US$0.6 million), compared with non-GAAP net income of RMB26.6 million in the second quarter of 2012 and non-GAAP net loss of RMB13.2 million in the first quarter of 2013.
• Basic and diluted loss per American Depositary Share³ ("ADS") was RMB0.66 (US$0.11), compared with an earning of RMB0.92 in the second quarter of 2012 and a loss of RMB1.01 in the first quarter of 2013.

"I am pleased to report a strong quarter of revenue growth sequentially demonstrating the strong recovery of our overall financial and operational performance since the end of 2012," commented Mr. Ken Jian Xiao, CMGE's Chief Executive Officer. "Revenue increased by 97% sequentially as we started to benefit from the execution of our long-term strategy of both self-developing and publishing third-party smartphone social games. Our operational and financial results are representative of the progress that we have been making. I believe we are in the early stages of a renewed growth period and that momentum will continue to accelerate.

"Our existing game portfolio has now expanded to contain over 500 single player games and 60 social games. Our self-developed social game Joyful Zha Jin Hua, the first social poker game in our Joyful poker game series, reached almost RMB 10 million in gross revenue in the month of June of 2013 even though it was only launched in February 2013. The number of monthly paying users for Joyful Zha Jin Hua has grown from approximately 295,000 in April to approximately 595,000 in June. We plan to introduce the iOS version of this game during the third quarter of this year. During the second quarter of 2013, we also launched Joyful Dou Di Zhu, Joyful Niuniu, Joyful Mahjong for two and Joyful Mahjong-tuidaohu, all of which we believe will contribute to the success of our Joyful poker game series. In addition, we launchedWar Valley in mid-July and it has performed well with a paying user conversion rate of around 10% and over 50,000 registrations during the first day of its launch. We believe these results indicate the potential of our proprietary social games. As of 30 June 2013, in addition to the six self-developed social games (two out of six are still under beta testing, namely Joyful Niuniu and Xiang Mo Shen Hua) we have already launched during 2013, we are on track to launch an additional nine such games before the end of the year, such as Immortal Wind (Xian Feng), Dazzling Dance (Xuan Wu Pai) and Che Che Bomb (Che Che Dan).

"Our third-party game publishing business has also expanded significantly. Since the launch of this business in the fourth quarter of 2012, we have published a total of 50 third-party social games, including over 15 games which we have exclusive licensing agreements. Many of the games that we publish have been ranked in the top 10 in terms of total downloads on major app stores and gaming platforms, such as Qihoo360, 91.com and Android Market.

"We have established strong capabilities in publishing, operating, sales and technology to support and help further expand our third-party publishing business. For publishing, CMGE runs one of China's strongest and most extensive mobile distribution channels. We are on target to pre-install our Game Center application or games on more than 60 million smartphones by the end of 2013. We have entered into pre-installation arrangements with a number of well-respected mobile brands in China, including Coolpad, K-touch, Eton, Haier, Zopo and Hedy. We have entered into an exclusive cooperation agreement with KuGuo, one of the largest mobile advertising platforms in China. In terms of operating games, CMGE has established strong teams that provide data analysis, product testing as well as around-the-clock customer support service, which allows us to continuously refine the games to help us meet our targeted operating performance. To enhance our sales and marketing, we have recruited top talent to promote our products on consumer- and business-oriented platforms innovatively and efficiently. In terms of technology, we have established strong SDK support and operating capabilities, and we are able to quickly connect our games onto many app stores or social networking platforms, as well as many major third-party payment gateways.

"We are proud of what we have achieved during the second quarter of 2013, and believe we have just begun to see the benefits of the transition that we initiated in late 2012 on the implementation of our long term strategy of focusing on developing and publishing smartphone games. We are confident that the strategy we have implemented and the investments we have made will deliver the long-term sustainable growth we are seeking."

Mr. Ken Chang, CMGE's Chief Financial Officer, added, "I am pleased to see the further acceleration of revenue growth in the second quarter of 2013, particularly in our games segment, which increased by a strong 87.2% compared to the first quarter. Our operating performance for social games is on a good path, with paying users increasing by 361.4%, from over 308,000 users during the first quarter of 2013 to 1.4 million users in the second quarter, driven by our proprietary gameJoyful Zha Jin Hua, as well as third-party games that we are publishing. During the second quarter, third-party game publishing revenue represents 19% of our game revenue, demonstrating the significant progress we have made since starting this business segment in late 2012. With respect to the game bundles, the number of subscriptions on China Mobile's platform increased by 29.8% sequentially, largely because of our good quality game selection and China Mobile's increase in promotion efforts."

First Quarter 2013 Results

• Revenues were $5.9 million, compared with $8.61 million in the first quarter of 2012.
• Basic and diluted loss per ADS excluding (1) share-based compensation and (2) goodwill and intangible assets impairment loss (non-GAAP) were $0.10 during the first quarter of 2013, compared with earnings per ADS of $0.15 in the first quarter of 2012.

"We were pleased to see a strong increase in revenue and an overall improvement in our financial and operational performance during the first quarter. We have begun to pick up momentum following the implementation last year of our long-term strategy of focusing on developing and publishing smartphone games," commented Mr. Ken Jian Xiao, CMGE's Chief Executive Officer. "We have been working diligently to enhance and adjust our distribution channels and our technology and development teams to take advantage of the significant growth opportunities in China's smartphone game business. On top of our existing game portfolio of 510 games, we recently announced the upcoming launch of our newest games, War Valley, Xiang Mo Shen Hua, and Immortal Wind, which are all self-developed social games for both Android and iOS-based platforms. In a demonstration of its potential, the Company received three national mobile game awards in 2013. Among these, War Valley was awarded the Online Game Award for Excellence by the Global Mobile Game Confederation and was named a Top 10 Mobile Game at the Global Mobile Internet Conference. In addition, the Golden Apple Award for Best Game was presented to Joyful Zha Jin Hua. We also significantly expanded our game publishing operations. In particular, we recently published Dragon's Summon, an Android-based game developed by a third-party.

"The year ahead holds great potential as we believe that we have only just begun to see the initial benefits of our transition to smartphone games. With a distribution network that reaches over 150 million mobile users, and a strong portfolio of games supported by strategic cooperation agreements with handset manufacturers, mobile operators and other third party platforms, I am confident in our ability to leverage these investments and carry out our transition as we seek to deliver long-term value to our shareholders."

Mr. Ken Chang, China Mobile Games' Chief Financial Officer, added, "We were pleased to see a strong increase in overall revenue, particularly from our games segment, which rose by 40.0% from the fourth quarter of 2012. This increase was largely a result of our ongoing successful transition to smartphone games and the expansion of our third-party game publishing business. In the first quarter of 2013, we launched three proprietary social games, including Joyful Zha Jin Hua, the first in a series of card games, which quickly achieved success with monthly paying users exceeding 160,000. In addition, the number of subscriptions to our single-player game bundles on China Mobile's platform increased as China Mobile began relaxing its advertising policies. Our game bundles again ranked first on China Mobile's platform in terms of revenue this quarter overall. We believe we are in the early stages of renewed growth as we pick up momentum from the transitional efforts that we undertook last year."

Second Quarter 2012 Results