Pali Research Maintains a 'Buy' on Shanda Interactive (SNDA); Raises Price Target on Positive AION Launch
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Pali Research maintains a 'Buy' on Shanda Interactive (Nasdaq: SNDA), raises price target from $66 to $78.
Pali analyst says, "After being in beta testing for only one day, SNDA announced last Friday that it will commercially launch AION on April 16th. The quick turnaround from beta testing to commercial launch shows that the game is good enough to skip the open beta phase, which normally takes about a 1 – 3 month period to accumulate gamers. We believe AION has the potential to be a hit game in the China market for two reasons: 1) An outstanding start - the number of players during the first day of beta testing reached more than 500K, which is unprecedented since the development of China’s online game market in 2000. Even though all servers (more than 70) were running on full capacity, it is still not enough to accommodate everyone as there are about 100K – 200K players waiting to log into the game; 2) Historically, if a game is very successful in Korea then it is highly likely that it would be a success in China as well. AION has already become the #1 game in Korea after being in operations for only 6 months. This is a good indication of its potential success in China, in our view...What could be the financial impact on SNDA? Based on the initial data, at RMB 0.48 per hour and 500K PCU, we believe we could see additional revenue of $86.3M and $180.7M in 2009 and 2010, respectively."
To see more analyst ratings on SNDA Click Here.
Shanda Interactive Entertainment Limited (Shanda Interactive) is an interactive entertainment media company and an operator of online games in China.
Pali analyst says, "After being in beta testing for only one day, SNDA announced last Friday that it will commercially launch AION on April 16th. The quick turnaround from beta testing to commercial launch shows that the game is good enough to skip the open beta phase, which normally takes about a 1 – 3 month period to accumulate gamers. We believe AION has the potential to be a hit game in the China market for two reasons: 1) An outstanding start - the number of players during the first day of beta testing reached more than 500K, which is unprecedented since the development of China’s online game market in 2000. Even though all servers (more than 70) were running on full capacity, it is still not enough to accommodate everyone as there are about 100K – 200K players waiting to log into the game; 2) Historically, if a game is very successful in Korea then it is highly likely that it would be a success in China as well. AION has already become the #1 game in Korea after being in operations for only 6 months. This is a good indication of its potential success in China, in our view...What could be the financial impact on SNDA? Based on the initial data, at RMB 0.48 per hour and 500K PCU, we believe we could see additional revenue of $86.3M and $180.7M in 2009 and 2010, respectively."
To see more analyst ratings on SNDA Click Here.
Shanda Interactive Entertainment Limited (Shanda Interactive) is an interactive entertainment media company and an operator of online games in China.
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