Shanda Interactive Entertainment Ltd reported
better-than-expected third-quarter net profit of 66 percent from a
year ago, thanks to more users paying for its games, China's No. 1
game firm said yesterday.
Net profit totaled 238.9 million yuan (US$32.28 million) in the
period, five percent above the high end of guidance and analysts'
forecast. Revenue climbed 50 percent to 656.3 million yuan,
Nasdaq-listed Shanda said yesterday in a statement.
The number of active paying accounts for Shanda's online
role-playing games jumped to 3.08 million from 2.14 million a year
earlier. Average monthly revenue per user, a key measure in the
industry, rose 12 percent to 57.90 yuan from 51.60 yuan.
The company's gross margin widened to 69.8 percent in the third
quarter from 56.2 percent a year earlier.
"Shanda surpassed most of its Internet peers in average customer
spending acceleration over the past six quarters by lifting its
ARPU for MMORPGs (massively multiple online role playing game) by
96 percent, compared with mid-90 percent for Baidu, high-50 percent
for Sina, low-20 percent for Focus Media and single digit growth
for NetEase," Morgan Stanley said in a note yesterday.
Shanda's pipeline of new games, including 10 new MMORPGs and
seven new casual games in 2008, may offer stability by reducing
revenue contribution from one or two "blockbusters" (such as The9
company, whose more than 90 percent revenue comes from the World of
WarCraft), Morgan Stanley said.
The US-based investment bank set Shanda's price target at
US$40.20 compared with US$34.50 on Tuesday.
Total revenue for China's online game market rose nine percent
to 2.9 billion yuan in the third quarter from the previous
quarter.
(Shanghai Daily November 29, 2007)
