SNDA

[nicknite20]

yukii, "sequentially lower revenue growth on a percentage basis in the current quarter" does not translate to Zero growth.

They grew 50% over previous quarter..sequentially lower growth could be anywhere upto 49%.

Anyway, doesnt matter..every1 is entitled to their opinions..I'll continue to hold GIGM.

[yukiii]

yukii, "sequentially lower revenue growth on a percentage basis in the current quarter" does not translate to Zero growth.

They grew 50% over previous quarter..sequentially lower growth could be anywhere upto 49%.

Anyway, doesnt matter..every1 is entitled to their opinions..I'll continue to hold GIGM.

You are not following the last 2 quarters the next 2 quarter no sequentially growth. last 4 quarter .59
estimate for the year 2007 .64 last year 2006 .51.
Yes earning are up alot from the first quarter last year, that's history next quarter the comparables will be .18 for the 2 quarter they will not beat it. Don't be blinded by the truth.

[BigSully1]

Tommorrow probably won't be too pleasant, especially for Chinese stocks.

[yukiii]

Tommorrow probably won't be too pleasant, especially for Chinese stocks.

Yeah down 6%, on triple trade price, how weak is that. It will not affect the economy.....

[BigSully1]

Tommorrow probably won't be too pleasant, especially for Chinese stocks.

Yeah down 6%, on triple trade price, how weak is that. It will not affect the economy.....

I didn't say it would affect the economy, smart aleck.

[David Randolph]

David,
Why would you want to get into SNDA when you have a winner like GIGM?
The upside potential in GIGM is far higher..
Nick

I agree with you nicknite20, I see more upside potential in GIGM than in SNDA, but I have a money management rule that says I need 15 different stocks to be full invested, so I can't put all my money in GIGM.

I'm making a strong bet on online gaming, as the group now accounts for about 20% of the Main Portfolio, since I have GIGM, NTES and SNDA from that space. I think it is a sector that will keep growing, indifferent to economic cycles, for the next 10 - 20 years.

SNDA had 2.34 million active customers in Q1 2007, I think that over time this number may very well increase 10 fold. I mean, what's 23.4 million people in a $1.3 B universe? I also believe these online gaming Chinese companies will eventually expand overseas, they're leading the world in this particular space, which is really incredible considering the innovation and technical skills involved.

SNDA has $68.8 M in revenues in Q1 2007 and forecasts $70.9 - $72.9 M in Q2 2007, so there will be sequential revenue growth. EPS will probably be something like $0.40 - $0.45 in Q2 2007 (it was $0.37 in Q1 2007 if we exclude SINA's share sale gain). If there's some more growth in Q3 and Q4 we can be talking about a $2 EPS number for the full year of 2007 (analysts estimate just $1.38, but they've been raising estimates lately).

I'll continue holding SNDA.

[nicknite20]

yukii, in the previous quarter, there was a 1 time gain due to sail of ISP..thats the reason EPS was higher..

[nicknite20]

"I  agree with you nicknite20, I see more upside potential in GIGM than in SNDA"

Thanks David, thats all I want to hear

[yukiii]

yukii, in the previous quarter, there was a 1 time gain due to sail of ISP..thats the reason EPS was higher..

Shanda Rises on Strong 1Q, 2Q Outlook
Wednesday May 23, 2:25 pm ET
Shanda Shares Jump Following Better-Than-Expected 1st-Quarter Earnings, 2Q Revenue Forecast

NEW YORK (AP) -- Shares of Chinese online video game operator Shanda Interactive Entertainment Ltd. advanced Wednesday after the company's first-quarter earnings soundly beat the Street's consensus estimates and it forecast better-than-expected revenue in the second quarter.
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Shanda's American Depositary Shares gained $1.10, or 3.8 percent, to $29.75 in afternoon trading, after hitting a new 12-month peak of $30.63 earlier in the session, topping their prior high of $28.70.

The company said late Tuesday it earned 448.8 million yuan ($58.7 million), or 80 cents per ADS for the quarter that ended March 31. Its results were aided by the sale of 4 million shares in Chinese Web portal operator Sina Corp. Stripping out that gain, Shanda's profit totaled 204 million yuan ($26.7 million), or 36 cents per ADS.

Sales increased 56 percent to 532.3 million yuan ($68.8 million), from 341.4 million yuan in the year-ago quarter. The company saw a big rise in revenue from its massively multiplayer online role-playing games, or MMORPG's, which made up the bulk of its sales -- 414 million yuan ($53.5 million), compared with 225.2 million yuan in the same quarter in 2006.

The results surpassed expectations of analysts polled by Thomson Financial, who projected earnings of 29 cents per ADS on sales of $65.7 million.

Shanda also said that while its second quarter is usually weak, it expects to see between $70.9 million and $72.9 million in quarterly sales, well above Wall Street's outlook for $67.5 million.

The company also anticipates its operating margin will decline to as low as 35 percent in the quarter, because it will increase marketing efforts for new games and expansion packs Shanda is releasing.

In a client note Wednesday, C.E. Unterberg Towbin analyst Tian X. Hou raised the price target for the company to $40 from $34, representing upside of nearly 40 percent over its finishing price Tuesday of $28.64. The analyst, who also reiterated a "Buy" rating on the company, said the move resulted from Shanda's reporting a "blowout" first quarter and positive revenue guidance for the current quarter.

[David Randolph]

Thanks for that report on SNDA yukiii. I have little doubt that after the current consolidation phase ends the stock will make a bullish breakout. The market's response to the second or third "China scare" was quite positive, with SNDA closing 1.36% higher on the day.

After the buy the rumor, sell the news, we're in the buy the sell the news mode, I don't know if you know what I mean.

I'll keep on holding SNDA with strong hands.

[David Randolph]

SNDA has been surpassing analysts estimates every quarter:



Even though they keep raising estimates. I believe this process will continue for years to come, and the stock price, of course, will also keep rising on a trend basis. I'll continue holding SNDA.

[David Randolph]

Nothing new for SNDA today, I'll continue holding it.

[David Randolph]

SNDA's casual games revenues are growing very fast:

«-- Casual game revenues increased 26.3% quarter-over-quarter and increased 7.8% year-over-year to RMB91.0 million (US$11.8 million).»

26.3% sequential growth, and just 7.8% from the year ago levels. So momentum accelerated a lot in Q1 2007. The company has 5 casual games:

http://www.snda.com/en/products/casual.htm

I guess these games are starting to get traction now.

This is one area where the Chinese seem to be truly innovative, not just making copy cats of western products. I believe there's a great opportunity for SNDA and NTES in Europe for example, people here don't play these online games.

Anyway, China is big enough for them to grow immensely. It was interesting to note that two of SNDA's casual games were recommended by the Ministry of Culture for teenagers.

I'll keep holding SNDA. 

[David Randolph]

«Revenues from MMORPGs in the first quarter of 2007 increased 9.5% quarter- over-quarter and increased 83.9% year-over-year to RMB414.0 million (US$53.5 million), accounting for 77.8% of total revenues. The sequential growth in MMORPG revenues was primarily due to the new expansion packs for our main game titles and in-game promotions related to the Chinese New Year holiday. Revenues from most of Shanda's MMORPGs increased during the quarter, with Mir II, Woool, Magical Land and ArchLord experiencing the most growth.

The number of APA for MMORPGs was 2.34 million in the first quarter of 2007, up 2.3% from 2.29 million in the fourth quarter of 2006. ARPU for MMORPGs increased 7.1% to RMB59.0 in the first quarter of 2007 from RMB55.1 in the fourth quarter of 2006, due to increased consumption of in-game premium features.»

The following games are played by 2.34 million people and are responsible for roughly 78% of the company's revenues: http://www.snda.com/en/products/mmorpgs.htm

The company will keep releasing more games and more people will play them, I don't see how this trend may stop. They have 2.34 million people playing the games, why not 10 million in the not so distant future? 10 million isn't much in a 1.3 billion people country.

I'll keep holding SNDA.

[David Randolph]

There was this news out for SNDA:

• Dynasty Gaming and Shanda Interactive Entertainment Sign LOI to Negotiate Software Licensing
PrimeNewswire (Wed 10:09am)

It's nice that SNDA will be launching a Mahjong online game, but it isn't big news for a $2 B company like SNDA.

Now, for DNYFF.OB, a $34 M market cap, it is pretty significant. DNYFF.OB also has an agreement with SOHU to license its online gaming Mahjong software in China. The company still didn't have any revenues in Q1 2007, but I've checked and they still have $5.5 M in cash and just about $0.5 M in liabilities. Revenues seem to be around the corner:

«An agreement with Las Vegas From Home.com Entertainment Inc. (http://www.lvfh.com) allows Dynasty to provide all of its marketing channel partners with its own Mahjong game together with LVFH's full suite of popular Asian-style specialty games. Commencement of multi-site online play of Mahjong in China is expected to begin in April, 2007. Competition for seats at a World Cup of Mahjong event, scheduled for June 2007 in Macau, PRC, will serve as an incentive for a large universe of players.»

Hmm, but I've searched Google for this and found dates for the tournament at December 2006, then April 2007 and now June 2007. Risk is high because, despite the good news, the stock is heading down:



People make questions, management does not answer them:
http://www.agoracom.com/ir/dynastygaming/messages

It could be a good idea to invest the remaining 4% of cash available in the Main Portfolio, but it seems too risky at this point.

I'll keep holding SNDA.