Morgan Stanley maintains a swimming stock reduction rating

The July 28 Evening News of Beijing Time, Morgan Stanley released its investment report today to maintain a nasdaq:cyou "reduction" rating.

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

In the second quarter of fiscal year 2014, revenue was lower than expected and net profit exceeded expectations. Total revenue of 177.8 million U.S. dollars, down 3% compared with the company's guidance expected lower than the lower limit of 2.3%. Based on non-US GAAP, the net profit is $2.4 million trillion, and the company's guidance is expected to be a loss of USD 14 million to $20 million, mainly thanks to lower than expected sales and marketing expenses.

Revenue for the first time lower than the guidance expected: the second quarter of the total revenue of 177.8 million U.S. dollars, the chain fell 2%, year-on-year decline of 3%, compared with the company's guidance expected lower limit of 2.3%, mainly by the game's low lower level of revenue drag. The second quarter of the game revenue of 153.9 million U.S. dollars, the chain fell 6%, year-on-year decline of 9%, compared with the company's guidance expected lower 4.4%. This is the first quarter since the initial public offering, which is lower than the company's guiding expectations. Company management has said that the main decline in revenue is "Tianlong eight", "the Divine Comedy" and "Pinball Hall," the performance of the downturn.

The number of users of the game is low: The total average monthly active users of the game is 24 million, the chain down 14%, down 33% year-on-year, the history of the lowest record. In addition, the total average monthly active users of the platform channel 252 million, the chain growth of 5%, year-on-year growth of 196%, mainly thanks to the continuous promotion.

Recovery: Based on non-US GAAP, a 2.4 million dollar net profit was achieved in the second quarter, while the company's guidance was expected to be a loss of $14 million to $20 million, mainly thanks to lower than expected sales and marketing expenses. In the second quarter, the cost of the cruise sales and marketing was $69 million, which accounted for 39% of total revenue, well below our expected $96 million trillion.

Third-quarter guidance expected: the third quarter of the total revenue will reach 186 million U.S. dollars to 192 million U.S. dollars, which game revenue of 158 million U.S. dollars to 163 million U.S. dollars, advertising revenue of 16 million U.S. dollars to 17 million U.S. dollars. By contrast, Wall Street expects revenue to reach $200 million trillion, and our forecast is $192 million trillion. Based on non-US GAAP, the tour is expected to lose $6 million trillion in the third quarter, while Wall Street is expected to profit 13 million dollars.

Invest in Dolphin Browser developer MOBOTAP Update: In addition to the previously announced investment agreement, Mobotap's founder shareholders will have an opportunity to exercise their put options and sell their 15% Mobotap Stakes to a swim at a price of 53 million dollars.

Valuation: We continue to maintain the "reduction" rating of the shares. (Li Ming)