Morgan Stanley to hold grand game rating to shareholding

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Beijing Time August 29 Evening News, Morgan Stanley released its investment report today, the Grand Game Stock (Nasdaq:game) rating from "overweight" to "hold the sidelines", the target share price from 4 U.S. dollars to 4.6 dollars.

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

Traditional MMO Game aging: "Dragon Valley", "Blood Legend 2" and "Legend of the World" is the first half of the Grand games revenue source, contributed 13%, 31% and 12% of the revenue. In the first half of the year, revenue from these games fell 19% to 35% year-on-year, mainly because of fierce market competition. "Blood Legend 2" and "legendary World" continue to age. Compared with competitors, Shanda Games MMO New game resources are not exciting.

Mobile game growth, but revenue contribution is limited: in the first half of this year, mobile gaming contributed 10% of total revenue, "Million King Arthur" performance best. But we expect mobile gaming to contribute only 5% of the profit in the first half of this year. The goal of the Grand game is that mobile gaming will contribute 50% of the revenue in the next few years.

Operating profit slipped: In the first half of this year, Shanda game operating profit fell 25% Year-on-year, operating profit margin fell 4%. We believe that this trend will continue. In view of the merger factor, we will be the Grand game 2013 to 2015 fiscal year diluted earnings per share expected to increase by 21% to 38%.

Valuation: We downgraded the Shanda game stock rating from "overweight" to "holding" and set the target share price from 4 US dollars to $4.6.