See the rising curve of mobile games revenues.
Owing to smart phone, mobile game must be another growth engine besides roII to Gravity.
millions of Won (thousands of US $)
2006 --- 3,840
2007 --- 4,063
2008 --- 6,882
2009 --- 7,882
2010 --- 9,118 (8,374)
Based on the 20-F I calculate a current value of the GRVY of 2.60 per ADS. I used conservative Graham criteria for the balance sheet value (1.34/ADS) and determined a NPV of FCF using 0 growth and 18 percent discount rate of 1.28/ADS.
It appears a reasonable hold at this point.
They made 11c a share in 2010. They had $1.45 in cash at the end of 2010. The release of Ragnarok 2 has been delayed until the 4th Quarter of 2011, and if they can actually pull that off, the value of the Royalties is about $43 million.
You need to use short-term investments in your cash calculation. So that brings cash per share to 2.02. I saw the $43 million as well. Are you sure you can make that statement that this is all they are going to make on RO2? So even if its a bust and no plays they get 43 million? Please further explain your analysis you stated. Thanks.
Here's the para with all the goodies:
In addition, we have experienced significant delays in and cost overruns related to the launch of many of our online games. For example, although we conducted open beta testing of Ragnarok Online II from May 2007 to August 2010, followed by closed beta testing on the upgraded version of the game from August 2010 to September 2010 and a customer satisfaction test called R Care Test in January 2011, and had indicated our plan to release Ragnarok Online II at various times over the past few years, the launch of this game has been significantly delayed on a number of occasions for a variety of reasons, including as a result of technical difficulties and corrective actions taken in response to market feedback during the testing and development phase. While no assurance can be given that we will be able to meet our current anticipated launch date, we currently intend to launch Ragnarok Online II in the fourth quarter of 2011. We entered into license and distribution agreements for Ragnarok Online II with six licensees in ten countries in 2006, 2007 and 2008, including Thailand, Japan, Taiwan, the Philippines, Singapore, Malaysia, Vietnam, China, Indonesia and Brazil. Our agreement with the licensee for licensing and distribution of Ragnarok Online II in the Taiwan, Hong Kong and Macau markets was terminated in December 2010. Licensing and distribution agreements with licensees in the Philippines and Brazil were amended in June 2010, and those in Thailand, Singapore and Malaysia were amended in November 2010 with less favorable terms than the original agreements, such as reduced license fees or guaranteed minimum royalty. As a result of such termination and amendments, the total value of our license and distribution agreements for Ragnarok Online II in nine countries is US$43,390 thousand as of December 31, 2010. Any continued delay in the launch schedule of Ragnarok Online II could result in financial losses, including termination or amendments of more license agreements, which could damage our reputation and have a material adverse effect on our business, prospects, financial condition and results of operation.