Gold Online Games Research report: Swimming game product structure diversification

(i) CICC February 1, 2012 released the first time to cover the Chinese online games industry research report, CICC gave a tour "prudent recommended" rating, the target price of 28.60 U.S. dollars, the following is the CICC's rating summary of the tour:

The game product structure is diversified, the foreground is broad

For the first time, we focus on cyou. US) to give a prudent recommendation rating of 12-month target price of 28.60 U.S. dollars. 2010, the tour came from behind in the domestic market share of online games rose to fourth place. The company is currently in transition from a focus on MMORPG to an integrated network game developer and operator.

Star Game products have become the main driving force for revenue growth. "Tianlong Eight" is still popular among online gaming users, providing a steady income contribution and sustained revenue growth in an increasingly competitive market. We believe that the newly upgraded version of "Tianlong eight 3", released in the 2011 Four seasons, will be the main driver of the company's performance growth in 2012.

Other game products have different prospects. With the acquisition of "Pinball Hall" developers Seventh Avenue, swim successfully into the rapid development of the web game market. At the same time, we also see in 2012 in the high-end casual gaming market, especially FPS this subdivision area, with a certain revenue growth opportunities. However, in the MMORPG business, "Deer Ding" 2011 Three or four quarterly performance is not very good, and the planned play adjustment also has some uncertainties, so we are cautious about its market prospects.

17173 platform Synergy: At the end of 2011, the company completed the acquisition of the game information website 17173.com of its parent corporation Sohu. In our view, the potential synergies that will result from this transaction and the 17173 user platform construction would include: the cost savings of gaming marketing and the user platform integration and user flow import of Web game users.

Performance forecasts and investment advice

We expect to enjoy 2012 and 2013 earnings per share (based on non-US GAAP) of USD 5.09 and USD 5.72 respectively. Our target price of 28.60 dollars is mainly based on non-US GAAP 2012 years of 5.6 times times P/E, compared to the historical dynamic P/E ratio of 33%. Although we are very optimistic about the "Tianlong Eight" and "Pinball Hall" market prospects, but the "Deer Ding kee," the future performance of certain concerns. At the same time, we are also optimistic about the 17173 platform for the long-term contribution of the tour.

Downside risk:

(1) "Tianlong Eight" and "Pinball Hall," the popularity of unexpected decline, (2) increased competition led to loss of market share, (3) The new game performance is lower than expected.

This article mentions stocks: $ cruise (cyou) $