The9 (NASDAQ : NCTY), China's top online game developer and operator, has today released its unaudited financial results for the fourth quarter and fiscal year up to December 31, 2006.

For the fourth quarter of 2006, The9 earned a total net revenue of RMB 282.7 million (36.2 million USD), representing a 21% increase from the third quarter of 2006 and 33% increase from the fourth quarter of 2005. For the 2006 fiscal year, net revenues increased by 112% to RMB 985.8 million (126.3 million USD) from RMB 465.0 million (59.6 million USD) in the 2005 fiscal year. The cause for the substantial growth of the company primarily resulted from its commercial operation of Blizzard Entertainment's online game 'World of Warcraft' (WoW) in mainland China in June 2005. For the fourth quarter and fiscal year 2006, net revenues attributable to the operation of WoW, including game playing time, merchandise sales and other related revenues, were RMB 281.4 million (36.1 million USD) and RMB 977.6 million (125.3 million USD respectively.

Gross profit for the fourth quarter of 2006 was RMB 134.7 million (17.3 million USD), a 25% quarter-over-quarter and 38% year-over-year increase, mainly due to increased revenues. Gross profit margin increased to 48% for the fourth quarter of 2006 from 46% in both the previous quarter and the same period of last year.

For the fourth quarter of 2006, profit from operations increased by 26% quarter-over-quarter and 52% year-over-year to RMB 80.0 million (10.3 million USD). Operating margin for the fourth quarter of 2006 was 28%, compared to 27% in the third quarter of 2006 and 25% in the fourth quarter of 2005.

"We' re very pleased to report our marvelous revenue and profit for the fourth quarter and fiscal year up to December 31, 2006, which hit a record high. For the fourth quarter of 2006, the largest number of simultaneous online users and average number of online users for the game 'WoW' in mainland China have reached 680,000 and 340,000 respectively. As of December 31, 2006, approximately 6.8 million paid accounts have been activated," said Zhu Jun, Chairman of the Board and CEO of The9.

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