BOC International to maintain Jinshan software buy rating target price unchanged

Sina Science and Technology hearing Beijing time August 26 afternoon news, China Silver International today released a study to maintain the Kingsoft software to buy a rating and the 6.11 Hong Kong dollar target share price unchanged. The following is the summary of the report: Jinshan Company in the first half of 2011 income of 494 million yuan, a micro-growth of 0.5%, of which online gaming revenue growth of 5%, the application of software revenue fell 8% year-on-year. Net profit rose 9% to 171 million yuan in the quarter. The company's gross profit margin remained at around 86%, while net profit margins rose from 32% to 35% in the first half of the 2010. The performance of the second quarter was encouraging, with the WPS product line surprisingly strong growth, driving the application business revenue growth by 32%, up 3% year-on-year.　　In the future we expect the WPS product line to maintain growth momentum, and more private cloud products and cloud storage concepts will be introduced. First half of 2011 Performance summary: Second quarter online game revenue growth of 6%, year-on-year growth of 9%, to 173 million yuan, accounting for the quarterly income of 66%.　　With the launch of the new game in the third quarter and the steady performance of the Swordsman Love game series, we expect the game business to continue to drive revenue growth for the year. Application software business income growth 32%, year-on-year growth of 3%, reached RMB 90 million yuan, strong WPS office orders and Japanese business sales rebound is the main driving factor. The decline in the number of antivirus VIP members in the second quarter slowed, from 2.36 million in the first quarter to 2.13 million, compared with 3.67 million in the fourth quarter of last year.　　With the introduction of more value-added services, we expect the anti-virus software business revenue will grow. Corporate research and development costs and management costs have declined, mainly affected by government subsidies and the number of staff control.　　The promotion of new games in the second half of the year may push up sales costs. Valuation: We reaffirm the buying rating for Jinshan stocks and maintain the target price of HK $6.11 unchanged. The target price is equivalent to 16 times times the expected earnings of Kingsoft in 2011 and 12 times times the expected earnings in 2012. The shares are now equivalent to 10 times and 8 times times the expected earnings for fiscal 2011 and 2012, which now hold a net cash of 1.3 billion yuan. Leisurely)