Goldman Sachs adds grand games to the Buy list, says valuations are low

The figure is the grand game since the listing of stock price trend in Beijing time November 4 Morning news, Goldman Sachs today released its investment report, the Grand Games (nasdaq:game) stock rating of "buy" (purchase), 12-month target share price set to 13 U.S. dollars. The following is a summary of the report: We believe that the grand game of the product mix is more balanced, can continue to maintain 5-9% revenue growth, so, compared with other Chinese network game companies, Shanda games short-term profit risk is relatively small. As the second half of the "Eternal Tower" (AION) will solve the key issues such as content, the game is expected to shake off the status of low growth.　　We believe that Shanda's share price decline after the IPO is unfounded, given that it is China's most-paid active account and gaming company, and we think it is a good time to get involved in the Shanda game stock. Good factor 1) Shanda games will release stable third-quarter earnings in early December, helping to dispel fears of slowing growth. We expect Shanda's third-quarter revenue growth to be 9%, up 44% year-on-year. Not according to the United States General accounting standards, the third quarter of the grand game is expected to increase the quarter-on-quarter growth of 3%, year-on-year growth of 43%. In the second quarter, as the Tower of Eternity exceeded its expectations, the grand game released half of its information as usual, and plans to launch more information in the second half of the year; 2 the performance of the Tower of Eternity will be better in the second half of the year, after the adoption of the software in August. In addition, Shanda games will be released in late November or early December, a larger version of the 1.5 edition of the film, 3 because the grand game can maintain a high growth rate, for the next two quarters of expectations are adjusted upward. We believe that our profits are expected to face upward risk if the performance of the new games exceeds our expectations.　　Our expectations are based on the premise that there will be no new games to play. The price of a grand game stock is equivalent to 11.1 times times the expected earnings per share in 2010 (not according to US GAAP), and the average Chinese gaming company is valued at 11.5 times times.　　Our target price is $13 trillion, equivalent to 13 times times the expected earnings per share in 2010 (not in accordance with US GAAP). Major risks existing games enter maturity, lack of game masterpieces, intensified industry competition, industry supervision issues, relationship with parent company and payment to parent company. (Sean)