Morgan Stanley maintains swim net overweight rating

Sina Science and technology news Beijing time, July 26 morning, Morgan Stanley published a study today, the Tour network (nasdaq:cyou) to maintain the stock rating of "overweight" (overweight) unchanged.

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

The net is scheduled for the U.S. Eastern Time July 29 The U.S. stock market before the opening of the 2013 fiscal year, the second quarter, then will be in the eastern time of the same day 7 points (19 o'clock), a conference call to interpret the earnings.

Second quarter performance forecast: 1 We expect the net in the second quarter of the total revenue of 183.6 million U.S. dollars, an increase of 25%, in line with the company's previous forecast growth of 21% to 26%; 2 We expect the net's second-quarter operating profit to be 94.3 million U.S. dollars, up 15% from the same period last year. Operating profit margin of 51%, lower than 57% in the previous quarter and 56% in the same period last year, mainly due to the increase in sales and marketing of new game promotions; 3 We expect net profit in the second quarter to be 72.5 million U.S. dollars, with a share of U.S. depository receipts of US $1.35, which is up 4% from a year earlier.

Earnings Focus:

The strong growth of web games: In the "Comedy of the War" and the growth of overseas revenue, we expect that the contribution of web game to net revenue will be expanded to 20% to 30% of the lower limit of the total revenue in the second quarter. Seventh Avenue next Page game "Poseidon" status updates will become the focus of attention. In addition, the integration of the game teams should also be a focus after the net buys the remaining stakes on Seventh Avenue.

Mobile games can be a new irritant momentum: The net has recently launched 10 balance mobile games. We observed that the swim net mobile game "don't touch My Cheese" has become a popular iOS game. The revenue potential and economy of mobile games will be the focus of attention.

"Tianlong Eight" is still the main source of revenue for the network, the game's important upgrade package to maintain its growth momentum: the tour of "Tianlong Eight" is still the largest revenue contributor, we believe that the growth of the game has been very stable. The tour will be released in the fourth quarter, "New Tianlong Eight," this important update will support its growth.

Potential special dividend: a special dividend of $3.8 per share of US depository receipts was distributed by the network in August 2012. Since the network currently holds a net cash balance of USD 8.8 per share of US depository receipts, and Nasdaq:sohu, the parent company, may need cash to develop new business, we think the net may consider paying a special dividend again. (Tangfeng)