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Shanda Games Limited (GAME) Message Board

  • robbierasser9az robbierasser9az Aug 28, 2013 4:46 PM Flag

    Home run- net profit up 45.5% from last quarter

    Keep in mind, this doesn't even account for the launch of Million Arthur in China, which took place in July.

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    • perhaps you would like to take a look at the income statement - the increase in net profit is solely due to two one time items: government subsidies nearly doubled last quarter and there's a huge income tax benefit. Without these one time gains earnings actually would have been much lower.

      the after hours run in the stock might be due to the company's guidance for mobile revenues to increase about 50% (or $8.25 mln) to close to $25 mln or 13,5% of total sales. This should come as no surprise to investors as the company already announced the good performance of the game in China. On the flipside this means that the core MMO business will actually be down slightly qoq.

      And while the number of daily active mobile users increased from by 32.5% average revenue per mobile user is actually down 28.2% which looks disappointing at least to me.

      Bottom line:

      with the core business still on the decline and margins deteriorating further the company will need more than a single well performing mobile game to increase its mobile revenues to a more significant amount - also monetization outside of Korea needs to improve vastly

      That said the stock isn't expensive and might be a good play on mobile gaming going forward - but with the majority of revenues still derived from a business in decline and the rest originating from a single game this investment carries some risk.

      Would short the stock into the after hours run.

      • 4 Replies to hageneriksson
      • hagen is right. the results are horrible. For me it is scary that relatively new games like aeon and dragon nest still can't make up for the dropping revenues of Mir and Wool. Also scary is how fast the revenues from Million Arthur dropped in Taiwan and Korea. Shows that mobile profits are only short term. So after a year of strong million arthur in china they'll have paid off the 200 million loan to buy out SDO and then what??? no cash on hand and waiting to see if they have a worthwhile game! I've owned Game for 2 years, averaged down all the way from 7 to 3, expected the stock would be worth at least 8 some day but Chen F==d it up . Sold entire position 60,000 shares at 4.30 Good luck to all. I think i'll try my luck with GA. same field, 5% dividend and 500 mln cash.

        Sentiment: Sell

      • Hagen, are you always be such a pain in a butttttt like this, you're nit pickin' every little thing that irrelevant to investors.. your reading is selective and you only focus on negatives and express displeasure with every accomplishments that this company had done.. go ahead and short as you please, and I hope you will get crashed and burnt ..

      • Shanda currently has a pipeline of 36 mobile games on their mobiile platform, and there's no doubt that they'll be expanding this platform every quarter. Everyone in the gaming industry admits that the majority of revenue will be from mobile games by 2020, so Shanda is on the cutting edge of this trend. They're still expanding their MMORPGs, but over time mobile games will likely bring in a much greater percentage of income.

        Shanda currently has a forward PE of about 4 with plenty of cash coming in and a market cap of just over 1 billion. Given their guidance, there's really not that much lower they can go- it could fall 5% tomorrow, but it'll be back up by next week. If I were shorting a stock, I'd choose something with a market cap of $128 billion and no profit in sight, like Amazon.

        Sentiment: Strong Buy

      • perhaps you would like to look at forward guidance. everyone and their moms are expecting revenues to decrease from the typical core mmo business. it's the mobile that is in play. even you said mobile going forward and the shifts of their reliance from non mobile moving into the mobile arena is what investors should be buying into. shorts probably will get toasted sooner or later since the drop was caused by the announcement of them buying out the affiliates who provide user and payment platform services. if this deal is dead, expect a huge jump. the way the stock has been trading is that they're expecting this deal to proceed.

    • Could double by end of year

      Sentiment: Strong Buy

 
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