CLSA maintains Shanda game stock wins market rating

Sina Science and technology news in Beijing November 17 night, CLSA Asia-Pacific market (CLSA asia-pacific CMC) today released an investment report to maintain the grand game (Micro-blog) (nasdaq:game) stock "run to win the market" rating,　　Reduce the target share price from 6 US dollars to 5.7 dollars. The following is a summary of the report: Shanda Games 2011 in the third quarter, profits rose 19% year-on-year, revenue rose 23% Year-on-year, but the fourth quarter revenue is expected to be lower than our expectations 7%. Traditional games remain strong, but the new game "star Change" (Legend of Immortals) does not perform well enough to attract the player's interest. 2012 to 2013 (calendar year), Shanda games have 17 games to be launched. With the expected downturn in the fourth quarter of the Shanda game, we cut our profit forecasts for 2011 and 2012 by 4% to 7% respectively. The dismal fourth-quarter results are expected to affect share prices, but the strong performance of traditional games and the 83 million dollar share buyback plan will prevent further declines.　　We maintain the "outperform" rating of the Shanda game stock, bringing the target share price from 6 US dollars down to 5.7 dollars. Third-quarter results: The total revenue for 1.4 billion yuan, the year-on-year growth of 23%, the chain growth of 2.4%. Net profit of 343 million yuan, an increase of 19%. In the third quarter, Shanda won a government subsidy of 43.6 million yuan, higher than our expected 20 million yuan. Deduct government subsidy, Shanda game the net profit of the third quarter is in line with our expectation, but we are disappointed with the forecast of the fourth quarter's performance.　　Shanda game is expected to achieve the fourth quarter revenue will reach 1.35 billion yuan, the chain is flat, lower than our expected 1.45 billion yuan, as well as the industry's average expected 1.38 billion yuan. The game performance is mixed: "Blood legend" and "legendary World" strong performance, the total revenue growth of 10% per cent, accounting for the total revenue of 61%. "The Valley of the Dragon" due to the delayed content update performance, revenue for 176 million yuan, the chain fell 22%. Shanda is expected to increase revenue from the fourth quarter of the "Dragon Valley", boosted by new data sheets.　　Our findings show that the "star change" performance was poor in the third quarter. Rich new Game Theme: 2011 The fourth quarter to 2012, Shanda Games has a wealth of new game themes.　　October launched the "Legendary 3" performance, the first half of 2012 will also launch three RPG games and a FPS game.　　In addition, Shanda games are also localized in several games, including "Dragonball Online" (Dragon Ball Online) and "Final Fantasy 14" (Final Fantasy XIV), which is expected to be launched in the second half of 2012. Valuation: We maintain the "outperform" rating of the Shanda game stock and target stocksThe price was lowered from 6 US dollars to 5.7 dollars. (Li Ming)