Maintain a swim in the stock to reduce the target price from 45 U.S. dollars to 40 dollars

The following is a summary of the contents of the report:

The focus shifted to the release platform: a steady stream of revenue sources and cash flows, but a decline in the number of users of independent research and development games. We expect that the excursion will shift the focus of business to the release platform (web games, mobile games and mobile apps, including 17173.com and its mobile version, mobile browsers and offshore web game sites). Third quarter, swim independent research and development of the game's monthly number of active users 31 million, the chain down 14%, down 21% year-on-year. Nevertheless, the swim revenue is still strong and the operating cash flow is plentiful, which will provide resources and time for the cruise development platform. In the third quarter, the number of active users on the platform channel increased by 16%, an increase of 15%. But because ARPU (per-user average revenue) is still low, the revenue contribution will not be significant.

Adjusted performance expectations: Thanks to the strong performance of web games and mobile games, we will be in the 2013 fiscal year, 2014 fiscal year and 2015 fiscal year revenue forecast to increase by 1%, 9% and 24% respectively, but the 2013 fiscal year, 2014 fiscal year and 2015 fiscal year for each share of diluted earnings expected to reduce 16%, 38% And 15%, largely dragged down by investments in new platforms.

Third quarter results: Revenue for 183 million U.S. dollars, the chain flat, an increase of 10%. Net profit of 72.8 million U.S. dollars, the chain fell 3%, flat, and Wall Street expected to coincide. We believe that the main MMORPG and web games drive revenue growth. The fourth quarter is expected to grow 5% to 9% quarter-on-quarter.

Valuation: We continue to maintain a "neutral" rating on the stock market, bringing the target share price from 45 US dollars to $40.