Paliresearch: Grand Games will continue to grow

Beijing time November 30 Evening News, the U.S. investment company Pali Research published an analysis of the report said that Shanda games will be released in the third quarter of 2009 earnings, the company's analysts expect Shanda games to continue to grow. The following is the full report: The Grand game will be in the U.S. Eastern Time December 1 after the U.S. stock market close (Beijing Time December 2) released in the third quarter of 2009 earnings, and will be the Eastern Time December 1 20:00 (Beijing time December 2 9:00) to hold a conference call. We believe that Shanda's third-quarter earnings will reflect the sustainability of growth. We believe that Shanda's earnings per share in the third quarter are likely to be higher than analysts ' average expectations, consistent with our expectations. In addition, we expect the Shanda games to release upbeat fourth-quarter earnings forecasts, benefiting from the steady growth of existing gaming products.　　These games, including "The Tower of Eternity", the effect of the "Tower of Eternity" will be fully reflected in the fourth quarter. Consider a grand game of competitors, both the tour and the Giants are facing product line problems, and NetEase is facing regulatory problems. Therefore, Shanda games face the least problems and uncertainties. We believe that, given the rich, diverse product lines, as well as strong operational capabilities, Shanda games should be higher than the Chinese online gaming industry average, at least not below the average level. However, Shanda is currently the cheapest Chinese online gaming concept Unit, which calculates its earnings ratio of 10.6 times times earnings per share in 2010 and is below 12 times times the industry average.　　We reiterate our rating for the Grand game "buy". We expect Shanda's third-quarter earnings to be robust, with earnings per share above analysts ' average forecasts, at least in line with our expectations. We expect Shanda's third-quarter revenue to be 184.6 million US dollars and 0.19 dollars per share. On average, analysts expect Shanda's third-quarter revenue to be $185.5 million trillion, with earnings of $0.18 per share. We believe that the existing game products will be the main driving force for the third quarter growth of Shanda games. We believe that the Grand game in the third quarter of the U.S. accounting standards operating profit will be lower, mainly due to the one-time Non-cash option cost.　　Therefore, we believe that the grand third quarter of the operating gross margin will fall from 37.2% in the second quarter to 36.3%, and will return to the fourth quarter of the normal level of 37.9%. We believe that Shanda's performance in the fourth quarter is expected to grow by 5% to 7% on a month-on-month basis. Its growth momentum includes: 1 "Eternal Tower" the full launch of the information to bring contributions; 2. As Shanda Games release a variety of game information, existing games will continue to grow. We expect Shanda's quarterly revenue to be $193.8 million, up 5% per cent, and $0.20 a share.　　Analysts expect Shanda's quarterly revenue to be $194.5 million, up 5% per cent, and 0.21 dollars a share. We reiterate our "buy" rating for Shanda games stocks and the 15 dollar target share price.　　The share price is based on a 0.96 dollar 2010 earnings forecast per share and 15.5 times multiples. The future of Shanda games are: 1 the impact of external and private servers; 2 the centralization of revenue; 3 the market competition is becoming fiercer; 4 management's lack of experience in communicating with Wall Street; 5 changes in regulation; 6 regulation increases. (D-Gold)