Deutsche Bank Takes Shanda Games To Hold (SNDA, GAME, CYOU, NCTY, GIGM, PWRD)

Tickerspy’s Chinese Online Gaming Index

CHINESE ONLINE GAMING INVESTING IDEAS

• Popular long ideas: NTES, GIGM, PWRD
• Popular short ideas: PWRD, CYOU, GAME
• Top dividend plays: GA, PWRD
• Pro favorites: NTES, CYOU, GA

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CHINESE ONLINE GAMING COVERAGE

China-focused online gaming companies

• Chinese Online Gaming Shares Bucking The Sell-Off (NTES, NCTY, SNDA, PWRD)
• Chinese Gaming Stocks Pull Back On Tencent Outlook (NCTY, PWRD, NTES, SNDA, GAME)
• Analyst Lops $21 Off Perfect World Target (PWRD, NTES, SOHU, CYOU, GAME, BIDU, SNDA)

CHINESE ONLINE GAMING CHART

CHINESE ONLINE GAMING METRICS

Avg. Market Cap:	$1.8B
Avg. P/E Ratio:	7.9
Avg. Div Yield:	1.2%

2009 Shanda Interactive Entertertainment (SNDA) spinoff Shanda Games Limited (GAME) has been the focus of the Chinese online gaming segment of late following the company’s second-quarter earnings report, a strategic acquisition, and some related commentary from analysts. This morning Deutsche Bank downgraded the stock to Hold from Buy, citing the “faster-than-expected aging of its two flagship games,” which represent about 75% of the company’s revenue.

After the bell on Wednesday, Shanda Games said its profits slipped by -16% in the second quarter, and net revenue was off by -4%. The 16-cent profit per American depositary share was in line with analyst consensus. The firm also announced plans to acquire Eyedentity Games, a Korean development studio, for about $95 million in cash.

As a whole, the Chinese Online Gaming Stocks Index lagged the S&P 500 by -3% in the month ended Thursday’s close. Shanda Games is the Index’s worst performer for the period, sliding by more than -20%, compared to less than -10% declines by next-worst Changyou (CYOU), another 2009 gaming spinoff.

Elsewhere in the sector, The9 Limited (NCTY), Gigamedia (GIGM), and Perfect World Co (PWRD) hung onto one-month gains as of Thursday’s closing bell, but all three are giving some back in today’s session.

Investors can track the Chinese Online Gaming Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

Tags: CYOU, GAME, GIGM, NCTY, PWRD, SNDA