by winston » Tue Oct 17, 2017 10:28 am
vested
Aug 30, 2017
<Research Report>UBS: Tencent Long-term Potential in Mobile Game Biz Not Fully Reflected; TP at $385
UBS, in its report, said the market remains concerned about slowing expansion of China's mobile game sector.
However, UBS Evidence Lab, tracking over 100 mobile games, found a promising outlook: mobile role-playing games (RPGs) maintain momentum, aided by intellectual property development, continued content updates and pan-entertainment integration.
Also, mobile e-Sports games are gaining traction with blockbuster titles; and new initiatives such as anime comic games (ACG), strategy games and overseas expansion are expanding the total addressable market (TAM).
The broker suggested TENCENT (00700.HK) and NetEase's long-term potential is not fully priced in.
UBS said Tencent still has the most diverse offerings. It is staying ahead in e-Sports mobile games. NetEase showed short-term weakness due to a decline in Onmyoji and lack of new hit titles, but the broker remained positive on the stable grossing of its hit MMORPGs over time and its strategic shift and diversifying games portfolio, though it will take some time to ramp up in new segments.
The broker rated Buy on both Tencent and NetEase, with target price of Tencent at $385.
Source: AAStocks Financial News
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