Details: Citi cut grand game rating to hold

U.S. Eastern Time March 1 (Beijing time March 1 evening) news, according to foreign media today reported that Citigroup today's grand game of the stock rating to "hold", while its target price cut to 9.00 U.S. dollars. Citi released its report saying Shanda's weak forecasts for the first quarter of fiscal year 2010 may mean that the commercial impact of the legend 2 will last longer than Citigroup analysts had predicted, which would likely push analysts to downgrade their performance forecasts and lead to a setback in investor confidence in Shanda gaming stocks. Based on this, Citi cut its revenue forecasts for the Grand Games 2010 and 2011, respectively, by 24% and 25%, while cutting its earnings per share for the 2010 and 2011 fiscal Year by 28% and 25% respectively, and believes investors will want to see the average per-user income for Shanda Games (ARPU)　　Return to normal levels and further rise thereafter. Based on the expected return on US depository receipts (not in accordance with US general accounting standards) of $0.70 and 13 times times the market surplus for the 2010 fiscal year after the grand game was adjusted, Citi downgraded the shares of Shanda games to "hold/Low Risk" (Hold/low disorientated),　　It also lowered its target price from 12.50 to $9.00. Citigroup analysts pointed out that the grand game in the 2009 fiscal year quarter results in line with the company itself and Wall Street analysts had expected, but surprisingly, the grand game forecast in the first quarter of the 2010 fiscal year total revenue will decline 10% to 15%, mainly due to the flagship game of Shanda games "Legend 2" The latest upgrade package, launched at the end of 2009, has had a significant impact on average per-user revenue. Since legend 2 still accounts for more than 50% of the total revenue from the Shanda games, as a result, the sharp drop in average per-user income is likely to be offset by the following factors: 1 Casual games are expected to rebound strongly in the first quarter; 2 from the recently acquired Gold and American game distribution and built-in advertising platform Mochi　　The total revenue of media company.　　Citi believes that while Shanda's management claims that its active users and paying subscribers are still stable, it is not yet clear when average earnings per user will return to normal levels. Citigroup analysts also pointed out that the reason for not advising investors to sell Shanda game shares is that Citi's forecast for Shanda's 2010 profit multiplier is 13 times times the overall profitability of the game company, which is 10 times times to 13 times times　　The fair value of Shanda's shares should be $7.00, even with 10 times times the profit multiplier, given Citi's analyst's move to cut earnings per share in the 2010 fiscal year by 28%. Shanda's shares have fallen 34 since the IPO, and Shanda's shares have fallen 19% per cent so far this year.　　Based on this, Citigroup analysts predict that Shanda's recent share price may be under pressure, and that Shanda's latest announcement of a total of $150 million trillion in share buybacks will support the downward trend in its share price. Shanda Games expect its total revenue in the first quarter of fiscal year 2010 to be $166.3 million to $176 million, with operating margins in the middle of 30% to 40%. (Tangfeng)