Morgan Stanley maintains giant overweight rating up to $9.6

Sina Science and technology news Beijing time August 7 afternoon, Morgan Stanley released a study today to maintain the giant network (NYSE:GA) stock "overweight" (overweight) rating, and its target share price from 8.70 U.S. dollars to 9.60 U.S. dollars.

The following is a summary of the report:

Because of the strong growth of the Giants, the "Fairy World" outstanding performance, dividend yield is also very healthy, we still maintain the giant stock "overweight" rating. The company has a wide range of game lines, ranging from first-person shooter and MMORPG (massively multiplayer online role-playing games) to web games and mobile games. The stock is currently 8 times times the 2014-year price-to-earnings ratio, with a reasonable valuation and a dividend yield of about 3% per cent a year.

Profit beyond our expectations: The Giants 2013 second quarter revenue for 588 million yuan, the chain growth of 3%, year-on-year growth of 11%, in line with our expectations. Net profit of 368 million yuan, the chain growth of 13%, year-on-year growth of 20%, higher than our expectations of 13%, because of interest income and higher tax rebate.

We are optimistic: 1 since the release, the "Fairy World" has become the giant's new growth engine, according to our estimates, the game in the second quarter of the company contributed about 10% of the revenue. 2 The APA (active pay account), ARPU (per user average income) and ACU (average simultaneous online users) and other operating indicators grew 3% to 5% Year-on-year. 3 net cash for 544 million U.S. dollars, the chain growth of 11%, accounting for the company's market value of 25% to 30%. The giant announced a semi-annual dividend of ads (US depository shares) of 0.23 U.S. dollars, equivalent to about 50% of the payout rate and a dividend yield of 3% per share.

We are not optimistic: because of higher sales and marketing costs (up 78%), operating profit rate of the chain reduction of 2%, year-on-year decrease of 1%, to 63%.

Maintain the "overweight" rating: 1 The giant has a wealth of game lines, including 6 operating games, and one or two MMORPG, two web games, one or two mobile games. 2 The new game "Fairy World" April 19, 2013 into the unrestricted-test phase, in the first hour after the release attracted more than 100,000 players. 5 "New Journey" is "journey online" important information, has entered the test phase on July 12, 2013, and has attracted 400,000 of users in the game to create their own incarnation. (Ding Macro)