Morgan Stanley maintains Shanda games overweight rating

Sina Science and technology news Beijing time August 24 afternoon, Morgan Stanley published a research report today to maintain the Grand game (nasdaq:game) Stock "overweight" (overweight) rating. The following is a summary of the report: The success of "star Change" and the strong performance of "Legend 2" and "Legendary World", Shanda's second-quarter sales grew 19% year-on-year. The company's third-quarter sales are expected to accelerate growth. Its share price is 5.9 times times the 2012-year P/E ratio, and PEG, which is 0.8 times times the relative earnings ratio, has an attractive valuation.　　We maintain the "overweight" rating of the unit. Profit in line with expectations: Shanda games in the second quarter to achieve sales of 1.321 billion yuan, the chain growth of 5%, the year-on-year growth of 19%. Realize operating profit of 362 million yuan, the chain growth of 3%, an increase of 12%.　　Each share of ADS (US depository shares) diluted revenue of 0.17 U.S. dollars, basically in line with our expectations. Positive factors: 1 The Grand game of MMORPG (large multiplayer online role-playing game) sales growth of 7%, year-on-year growth of 16%, every active pay account average monthly income growth of 18%. 2 The third quarter revenue is expected to grow 2% to 4%, year-on-year growth of 23% to 25%, the continuation of the first half of the rising momentum. 3 Thanks to the solid performance of the "Valley of Dragons", overseas sales rose to 76% year-on-year, accounting for 6% of total revenue. 4 The net cash balance accounts for about 35% to 40% of the market value.　　The company is launching a stock repurchase scheme of up to 112 million dollars, about 8% of its market capitalisation.　　Bad factor: Due to the slow seasonal growth, Shanda games high-end leisure game sales decreased by 12%, accounting for about 6% of total income, less than 7% of the first quarter. With a newer game mix: We calculate the fair value of the Shanda game stock based on cash flow discount of $5.90 per share. Benefiting from "The Valley of the Dragon" and "star change" outstanding performance, Shanda games have a more balanced game mix. We note: 1 The income contribution of old games such as legend 2 and legendary world has fallen from 78% in 2009 to 57% in the second quarter of this year. 2 Grand game combination is very rich, with 36 games, there are 15 new games waiting to be released. 3) including "Final Fantasy 14" (Final Fantasy XIV), "Blitz Storm" (sudden Attack), "Dragonball Online" (Dragon Ball Online) and "Champions Football Manager" (Championship Manager) Overseas licensing games are expected to become the new flagship game. (Si yuan)