Shanda Rebound (SNDA)

[kagame]

You may all remember I suggested Shanda Interactive (SNDA) as a possible value buy in Chinese Internet space.

The stock visited all time lows in after hours last night as there was a conference call scare, BUT after many encouraging bits of information and the conclusion that the new free to play revenue model is turning into a highly successful revenue stream the stock is up +10% today.

Just thought some of you might want to take a look at my old thread, or simply check out the conference call and the financials.

Let me know if anyone is curious, there is the potential for a short squeeze to 16-17 and the stock has the potential to revisit 20's, and perhaps regain all time highs if the next few quarters are similarly encouraging as Dungeons and Dragons, Archlord, and new casual games are introduced to EZ Pod, the initiative that is bundled with HP computers in the region.

Conference Call:
http://chinastockblog.com/article/10835

[kagame]

bump

[kagame]

SNDA Chart Since Post

[image]http://ichart.finance.yahoo.com/z?s=SNDA&t=1y&q=l&l=on&z=m&p=m 50,m200&a=v[/image]

[skindog]

Nice catch... so what do you think of its prospects given its current price?

[arh1]

I opened a couple positions in the teens. [img]/images/graemlins/grin.gif[/img]

Glad they're finally turning around. I think it's still a good value right now. Especially when compared to other "hot" Chinese internet stocks (Baidu, etc). I think they're projected to grow around 30% per year for the next 5 years, and their PE is in the high teens, PEG is like 0.7 or so.

[kagame]

There have been a bunch of upgrades recently, mostly with price targets are above $40, which I think is conservative. The valuation is still extremely compelling even with the recent run up, just take a look at the PE; and annual growth is estimated at 30% for the next few years.

The game pipeline is very strong, the business connections are there, and Chen is still the visionary he always has been. I would say the EZ Pod fiasco was just a case of his being ahead of his time; and that may even be vindicated in the near future, they still have the potential for profits there. The other huge pps depressor was the switch to the CSP (come stay play) model, which was modeled after successful markets in Korea, and that has turned out to have been an amazing management decision based on their recent game revenues. Chen seems to be figuring out how to handle Wall Street analysts and I don't think we will see another price collapse in the stock anytime soon.

There is just still so much value here compared to say, BIDU.

Oh, and there is the in-game advertising that will start contributing revenue after this next quarter. Almost makes me pee my pants.