Morgan Stanley: "Dream West Tour" PCU record high

Beijing time July 5 Evening News, Morgan Stanley released a report today, said NetEase's operation of the online game "Dream West Tour" July 5 the highest simultaneous number of users (PCU) reached 2.6 million, more than last year's 2.56 million, hit a record high.　　Morgan Stanley expects the "Dream West" contribution to NetEase's 2010 revenue will reach about 30%. The following are the main elements of the report: We expect a revival of the Dream West Tour. In the past two quarters, the PCU of "Dream West Tour" has been weak. This is mainly because: 1 netease more resources into the "World of Warcraft", 2 "Dream West Tour" lack of new information or large-scale promotional activities. With the first quarter of World of Warcraft approved, we expect NetEase will pay more attention to the "Dream West Tour" of the upgrade and marketing, so as to enhance the performance of the game.　　It is noteworthy that, although "Dream West Tour" has been operating for 7 years, but still China's most popular game (currently in Baidu Search keywords ranked 4th). NetEase is the market leader in online games, and its value is underestimated. According to our 2010-year revenue forecast, NetEase's current dynamic P/E ratio is only 12 to 13 times times.　　We estimate that NetEase's operating profit will grow by more than 20% per annum over the next 3 years. We want to point out: 1 NetEase currently operates China's top 10 online games in 3, including "Dream West Tour", "World of Warcraft" (we estimate the total revenue of about 30%), as well as "Dahua West Tour 2" and "Dahua West Tour 3" (we estimate the total revenue of about 15%). 2) We estimate that 2010, "World of Warcraft" will make NetEase's online games market share up about 5%, to 15%. 3 NetEase's two new games, "The World" and "Datang chivalrous" is becoming the new growth power. We estimate that "World II" 2010 to NetEase revenue contribution will reach 10% to 15%. 4 NetEase's non gaming assets, including the email community (according to Analysys International data, accounting for about 70% of Chinese users ' market share) and portals (according to Alexa data, traffic in the Chinese market ranked third) is not reflected in the current price.　　5 NetEase currently holds more than 1.1 billion U.S. dollars net cash, up to the market value of 25% to 30%, which makes NetEase become China's top three of the most cash-holding internet listed companies. Morgan Stanley's current rating of NetEase shares is overweight (overweight). (Edit Zhang Xing)