想谈谈GA

LDK777

总觉GA要涨了，可能在2，3月。 理由是它的PE低，而且GAME在亚洲很盛行，我的什么友人们都是网迷，每月都要交几千给他们，中国人口那么多，按人头算算，老史不赚死才怪。基本认为它在3月能到16以上，欢迎讨论。

LDK777

Why do we invest in this stock? Hype? Well perhaps initially because we wanted to find the next BIDU, STP, First Solar (Before all got hammered due to stock market correction). But after some research, GA could be a decent investment.

"GA is a three-year-old company and a new-comer to the Chinese online gaming industry, specializing in MMORPGs (Massively Multiplayer Online Role-Playing Games). Its first MMO game, ZT Online, went into commercialization only in January 2006. However, this game proved the company to be a super-runner. ZT Online was rated the most popular online game in China in the same year by both IDC and game players."

Sounded pretty good. Let's examine ZT Online.

ZT Online sequential growth:

"Its first six months (following commercial launch) brought in RMB 82.4M revenue and 43.5M net income. Each of the following two six-month periods recorded three-digit sequential growth. Revenue for the second six-month period (ending December 2006) increased by 296% sequentially to RMB 326.1M and net income increased by 362% sequentially to 201.1M. Then the third six-month period (ending June 2007) saw sequential revenue growth of 111% to RMB 687.5M and sequential net income growth of 155% to RMB 512.3M. Obviously this type of growth rate is not sustainable. So Q3 began to revert to the more normal sequential growth rates. In the quarter net revenue grew by 9.5% sequentially and net income grew by 9.8% sequentially over Q2 of the year. The abrupt growth deceleration appears related to the life cycle of MOM games which tend to peak roughly 18 months following commercial launch."

That's the reason GA got hammered when they announced Q3 numbers. The reliance on a single block buster game could hurt you if it had peaked. We won't know how successful ZT Online in 2nd and 3rd tier chine cities till Q4.

Let's see the magnitude of a single block buster game did to the industry:
According to iResarch, the industrial revenue in 2006 grew 60% over 2005. And it reached RMB 3.04B in Q3 2007 alone, compared to RMB 7.68B for whole year 2006. As of Q3 GA's market share was third in the industry, at 13.8%, only trailing NetEase's 15.1% and Shanda's 18.4%.

Imagine a game capturing 13.8% market share of online gaming revenue in China! We'll have to watch the trend on Q4 to see Giant Online's potential in increasing GA's market share, assuming ZT Online has peaked, and subsequent quarters for King of King 3 contribution to capture more market share.

Imagine a game capturing the top spot in terms of net income for a company.
GA 290.2M
NTES 260.2M
SNDA 238.9M

Pretty impressive don't you think? We know that GA will make a lot of money from ZT Online, the big question now is how Giant Online will perform?

"Mr. Shi expects this game to generate at least the same level of revenue as ZT Onlne. Furthermore, the company will be rolling out its licensed 3D game King of Kings III next year. And you can count on more games to be developed and released in the future."
HMMM.... We could speculate what that would do to the stock price!

Next to the Net Margin:
GA is holding the top spot for ALL Chinese companies! Clocking at 70% operating and 70% net margin. Let's compare it to other companies:

SNDA: 40%, 62%
NTES: 55%, 55%
PWRD: 41%, 42%
BIDU: 33%, 37%
STP: 13%, 13%

To increase market share, net margin will suffer because of competition. Enjoy it while you can.
Of course BIDU and STP are not in the online gaming industry...but it's just an interesting comparison.

LDK777

"To value this company, I used a DCF model with 16% discount rate. Here are the assumptions I made: (1) the company will be in business for the next 30 years only, (2) free cash flow (FCF) is equal to net earnings, (3) the company will grow FCF or earnings at 27% annual rate for the first five years (starting 08), followed by 15% for the next five years and 7% for the remaining 20 years. I arrived at $12.30 (per share) when I used the hypothetical (25% tax rate) NOPAT for this year, and $16.32 (per share) when I used an estimated net earnings for FY 07. So this model puts the stock at $12.30 to $16.32 per share."
We are at 10.18. 50% of its high.

You know why the stock is not moving? Not much analysts coverage. No catalyst. Market fear. And because there are other stocks on bargain basement prices. Wasn't it AAPL at 200 several month ago? How about BIDU? Wasn't it $400 at its peak? SNDA was a $40 stock. Why risk money in this market environment? The support is the $200 million buy back. Maybe they wanted to prop the price above 10 since savvy investors and the big boys generally don't like to touch stocks below 10. If you wanted to short...do it at your own risk.

GA Forward PE: 10.18/0.8 = 12.62
SNDA Forward PE: 13.16 to 15.62
NTES Forward PE: 15.01
BIDU Forward PE: 71.64

A PE of 15, would get GA at 12.
HM....Could you say undervalued compared to its peers?

lovelyguoguo

俺正深度被套。

卜丁

10上下可逐步建仓，啥时风水轮到他家，肯定有点儿小钱赚。

wahaha

同意扑丁，正考虑10左右买 进。我在18买进，后来在16止损。

saryee

成交量在萎缩，价格波动在减小。现在持有股的都是铁杆。所以庄稼继续打压的意义不大。

Brainteaser

GA 这个公司的赚钱方法非常值得注意 如果政府缓过神来. 可能立法ban了他们的游戏.

quicktime2004

嘿嘿，如果美国办了微软，INTC呢 赚钱只要合法，就可以吧 花儿街一群流氓不是天天玩钱么

LDK777

recently, GA is up. I feel it will up more. But feel the DOW and NAZ will be down for the W. Someone said it is CHinese stocks time from now to next week. It is same as last Oct 1. It is hard to make decision to hold or sell my GA option.

shyuan

关于GA，它一上市就走出了BX模式，一开始就跌，这至少说明公司自己都不care这个股票（据说史和他女儿刚开始就在拼命卖），根本没有想去托住它，为公司以后的发展打下基础，记得livemore的书上曾经讲过类似的一个故事。。。他很不屑。。

 

这种公司自己都不关心的股票，我们老去关心它干啥？呵呵

 

my sense

 

 

jeeplover

应该不会吧。 史不是宣布回购股票吗? 而且史和她女儿手上的股票一开始不能卖的. 要卖要提前6个月向SEC提出申请.