Giant Network Announces privatisation

On the evening of November 25, the giant announced the unexpected, yet understandable, message to all. According to the giant's announcement, Shi Yuzhu will join the Baring Asia Investment subsidiary of a consortium, to buy 11.75 dollars per share of the giant network of all the shares, the total transaction price of about 2.82 billion U.S. dollars.

Six months ago, Shi Yuzhu resigned as giant Network CEO, announced the retirement, but also the micro-blog name changed to "Shi Yuzhu", but the Shi Yuzhu after the retirement apparently has not been completely idle down, at least, has not idle to what he said "main business is playing, sideline is to do some public welfare" point. This again, the dominant giants of privatization, Shi Yuzhu's gourd in the end selling what medicine?

Miss the best time

Privatization, Shi Yuzhu is afraid already moved the mind.

From Ali to grand to the public, TMT industry, so far the privatization of several large companies, Shi Yuzhu do not forget to speak very much. Even for the old opponents Chen, Shi Yuzhu are not generous words, praise its "martial", said has created many first Chen Tianqiao completed grand privatization, is to create a new first.

Also because of this, the world has been the Giants listed as the most likely to privatize one of the companies, coupled with online games stocks in the overseas valuation is too low, giant shareholding high concentration, Shi Yuzhu personal shareholding nearly half and other factors, the giant privatization of the difficulty and resistance is not big.

But in terms of cost alone, the Giants missed the best time to privatize. "A person familiar with the U.S. stock industry said.

Looking back at the giant's share price performance is not hard to find, in 2011, after the middle-and-winter hit, the giant's share price has been halved in two months, from 7-8 U.S. dollars to 3-4 U.S. dollars, but after a slight rebound, but the entire 2012 years around 5 U.S. dollars. In the meantime, the same share price setback of the grand first launched the privatisation, and then, even the short of muddy water to choose the privatization of the city, but the company to pull off Wall Street Shi Yuzhu himself but did not act.

By the year 2013, in the United States, the trust crisis gradually subsided, stock prices began to rebound collectively, nearly a year, the giant's share price is out of a unilateral rally curve, all the way from the beginning of the 6 U.S. dollars, rose to more than 10 U.S. dollars, up to 70%. This also means that Shi Yuzhu's privatization now costs much more than a year ago.

"But the time to pull a bit longer to see, Shi Yuzhu actually still earn." "The privatization of Shanda and the public is carried out at the low level of their share price," the analysis said. But after all is still higher than the year, the giant price of 15.5 U.S. dollars, now buy less than 12 U.S. dollars, not only from the capital market to a large amount of interest-free loans, investors also paid several dollars per share. ”

As for missing the best opportunity, a person familiar with the Giants said, "Privatization still needs a lot of money, the first two years of Shi Yuzhu desperately increase the Minsheng bank, should consume a lot of money, may not have surplus energy to operate privatization." "Public information shows that Shi Yuzhu in this June 5, but also in another increase in Minsheng Bank, to 8.5 yuan to reduce the price of the giant network of shares, set now 128 million U.S. dollars to replenish funds."

Where to pay for huge investments

Although the price of giant privatisation is not high, in absolute terms, the privatisation will consume more than 1.3 billion dollars in cash, equivalent to a huge investment. If the rate of return is considered, then a return to a shares may be the best solution, because compared to the game companies in the United States, a A-share for the game company is simply love to crazy.

This year, the concept of the game stock is staged round after round of crazy rally, so far, a shares of the most typical two game stocks, Palm Technology (300315) and the Chinese Green Treasure (300052), the dynamic P/E ratio reached 200 times times and 250 times times, this and Giants, grand, swim 10 times times the price/earnings ratio of a gaming company that is listed in the U.S. In other words, the return of the city's grand, giant if you can go to a a-shares, market capitalisation is bound to be higher than in the U.S. stock market.

"Although the gap from the P/E to consider, the return of a shares is indeed a temptation, but in the short term difficult or very large, a-share on the game company itself is very strict, and this year's good market, next year may not be able to have such a good market." "Analysys International analyst Shi Yong Analysis said.

Moreover, in the capital markets that value the future of the company, the big, giant's end-travel companies are probably also limited in their attractiveness to investors. According to the view of the data, the entire client online game market scale of nearly four quarters of the chain growth is only about 5%, and mobile games in the first half of the year 135% of the growth rate is not a level. Industry consensus is that the end of the tour in a stable development phase, the era of high growth has passed. And the giant's latest quarterly earnings show that its net revenue for the quarter was 590 million yuan, an increase of 8.6% per cent year-on-year.

"The end of the tour is a typical cash cow, although the growth rate is not good, but the plate is big, profit margins are high, extremely lucrative," said the gaming industry. Their main problem is not the lack of money, but the money to spend it. Because not to hit a sum of money can make a and the same as the old money of the client game, so the listing of money does not mean much. ”

A big game of chess?

Since the 2007 IPO, the giant's income has been heavily dependent on the "Journey" series, although also tried other game projects, but the effect is flat, Shi Yuzhu resigned, the giant finally launched a strategic masterpiece "Fairy World", but because the project was just beginning in September, profitability is still to be seen.

Shi Yong said, "in the transformation of the enterprise, the giant's transition speed is indeed relatively slow, so far in the field of hand travel has not much to build, for the transition period of enterprises, the withdrawal will often be more conducive to their own big adjustment." ”

The gaming industry also said that this kind of business adjustment may be more than just the game business, "the status of listed companies, to some extent, is conducive to financial savings, but not conducive to spending, because all investment should be disclosed to investors and responsible." For cash cows, the hands of a huge amount of money is not fully invigorated, is a relatively loss of things. "In his view, whether the Giants or grand, although the hands of large, but previously in the Internet investment is not outstanding performance."

Interestingly, the giant's investment is not much, Shi Yuzhu himself is a master of investment, 2011 he is because of 78 increase in Minsheng Bank, carrying a surplus of 6 billion yuan and many investors are sealed as "the stock."

"Shi Yuzhu is a capital master, involved in the industry are also many, subordinate industries may have synergy between the possibility of the giant's retreat may be the next big game." "Shi Yong evaluation Way.