Internet: The9 "QoQ Decline in 3Q, Gloomy Outlook for 4Q"
Key Points:
◆ A quarter of QoQ decline. WoW ACU declined from 478k in 2Q to 416k in 3Q due to seasonality and the Olympic Games. Without content upgrades, SUN kept flat and GE declined.
◆ As it did with TBC, The9 has again run into regulatory issues with WotLK in mainland China and the launch date has not yet been decided. WoW players continue chomping at the bit. The company is also still in negotiations for WoW license renewal. Big concerns remain.
◆ The 4Q outlook is not exciting due to the slow WoW ACU recovery and increasing costs for new games.
◆ Our 2008 EPS forecast is US$1.76 and our 2009 is US$1.80. We assume the successful renewal of WoW licensing but with Blizzard asking 10% more revenue to be shared. The Company is traded at 6.8x 2009 forward-looking P/E and net cash per share is US$11.4.
◆ Maintain HOLD due to the uncertainty in license renewal.
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发表于 2008-11-20 10:52
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