【出版时间及名称】：2009年11月中国网络流行业研究报告
        【作者】：汇丰银行
        【文件格式】：PDF
        【页数】：44
        【目录或简介】：

China online gaming is arguably the best
structural growth story in Asian TMT
􀀗 The two key success factors are proven
in-house game development and
national distribution platform
􀀗 Perfect World OW(V) is the leading
game developer and Tencent OW(V) is
the best distribution platform
The next growth wave. Internet-based services represent the
third growth phase of China TMT, building on the earlier
waves of subscriber growth and 3G-broadband capex. We are
bearish on China telco services as earnings fall due to 3G
expenses, neutral on telco equipment as the peak of the China
capex wave has passed, and bullish on online gaming due to
explosive earnings growth-attractive valuations. This growth
is driven by a sharp increase in Internet and broadband
penetration, structural growth in per capita spend on mediaentertainment,
and an economic policy shift towards domestic
consumption. We forecast 30% revenue CAGR for the online
games market over 2009-12e with stable margins vs. 7-10%
for telco services-equipment with declining margins.
Consolidation. China’s online gaming space is fragmented
(100+ players) but the top five players control 60% of
revenues. The combination of a limited pool of proven game
development teams, higher publishing costs and restrictions
on foreign content players will drive consolidation.
Top picks. Tencent is the best large, liquid, diversified play
in the China gaming space and benefits from the best
branding-distribution platform in China. Perfect World has
the best game portfolio, with a track record of bringing new
games to market faster and cheaper. It also has the best
earnings growth among the top nine gaming companies and
develops 100% of its games in house, a real plus.
Valuation and risks: Initiate on Perfect World (PWRD US)
at OW(V), TP USD60, NetEase (NTES US) at N(V), TP
USD42; Shanda (SNDA US) at N(V), TP USD50; maintain
OW(V) on Tencent, raise TP from HKD150 to HKD175.
Key risks are increased regulation on content, particularly
for NetEase, and delays in introduction of compelling new
game titles.