Morgan Stanley continues to maintain an overweight rating for perfect space-time

Morgan Stanley today published its investment report to maintain a NASDAQGS:PWRD "overweight" stock rating and an "attractive" (attractive) industry Outlook rating. The following is a summary of the report: perfect space-time the second quarter to achieve income of 594 million yuan, the chain to reduce 5%, but the year-on-year growth of 14%, basically in line with our expectations.　　Each share of the United States depository shares diluted income of 3.71 yuan, the chain reduction of 35%, year-on-year reduction of 25%, compared with our expectations of 22%, the main reason is the rising costs. Positive factors: 1 benefit from the "Pocket West Tour" in Korea, "Ghost legend" in Vietnam and "the evil" in South Korea and Russia, the successful release of Perfect space-time in the second quarter of foreign revenue (about 9% of total income) on the chain growth of 3%, year-on-year growth of 19%; 2 benefit from seasonal positive factors,　　Perfect space-time expected third-quarter sales to remain stable and likely to rise (0至5%); 3) The company is considering share buybacks and is awaiting approval from the board. Bad factor: Perfect Time and space the second quarter of online game sales decreased by 5%, year-on-year growth of only 14%. The company's active paid subscribers decreased by 14%, 24% Year-on-year, while online games per user average income (ARPU) decreased by 5%, but grew 23%.　　The main reason for the decline of the chain is the promotion and profit-making activities within the game, more stringent cheating control and the "dream of the Fairy" performance is poor. We believe that the value of perfect space-time is attractive, but it still has to wait for the catalyst: 1 In spite of weak short-term performance, the perfect time and space in the transformation of the new game to play the process, still maintain the industry's leading position. The company's upcoming games cover 2D, 2.5D and 3D, which occupy the strongest position in the industry; 2 Perfect Space-Time is the leader of China's online game export market. We estimate that the company accounted for about 40% of China's online game exports in 2009; 3 the perfect time and space the current share price is 7 to 8 times times the earnings forecast for 2010 per share, and we expect its profits to increase by 3 to 20% annually in the next 25% years. We are paying close attention to the release of the Magic Continent (3D), The Sword of the Dragon (2D) and the "Laughing Pride", which are expected to become the company's new catalyst.