GAME  Shanda Games Limited

Exchange

NASDAQ

Sector

Miscellaneous

Industry

Business Services

Market Cap.

1.89B

Vuru Grade

55.78/100

Current Price

$6.98
+0.00 (+0.00%)

Company Metrics

  • P/E 16.74
  • P/S 3.75
  • P/B 6.23
  • EPS 0.42
  • Cash ROIC -445.93%
  • Cash Ratio 1.17
  • Dividend 0 / 0%
  • Avg. Vol. 314,332.00
  • Shares 55.89M
  • Market Cap. 1.89B

Company Description

Shanda Games Limited, an online game company, engages in the development and operation of online games in the People's Republic of China. It also licenses its games to third parties. The company's game portfolio includes massively multi-player online role-playing games (MMORPGs), which are action adventure-based and draw upon themes comprising martial arts adventure, fantasy, strategy, and histori... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Shanda Games Limited Announces Completion of Merger
PR Newswire (press release) - Nov 19, 2015
19, 2015 /PRNewswire/ -- Shanda Games Limited (NASDAQ: GAME) ("Shanda Games" or the "Company"), a leading online game developer, operator and publisher in China, announced today the completion of the merger contemplated by the previously ...
Shanda Games Limited(ADR) (GAME), Giant Interactive Group Inc (ADR) (GA): This ...
Insider Monkey (blog) - Sep 4, 2013
Chinese online game developer Shanda Games Limited(ADR) (NASDAQ:GAME) has seen its fortunes turn around dramatically since it reported its first-quarter results in May.
Shanda Games' shares fall on initial public offering
MarketWatch - Sep 25, 2009
SAN FRANCISCO (MarketWatch) -Shanda Games saw its shares slip 14% Friday after the company's initial public offering, which priced at the top of its $10.50 to $12.50 range.
Shanda Games drops nearly 10 percent after $1 billion IPO
Reuters - Sep 25, 2009
Shanda Games, which was carved out of China media company Shanda Interactive Entertainment Ltd SNDA.O, priced its ... It sold 83.5 million ADRs, nearly a third more than it had originally planned, after earlier this week increasing the size of its ...
Hedge Funds Are Selling Cornerstone OnDemand, Inc. (CSOD) – Konami Corp (ADR ...
Insider Monkey (blog) - Apr 5, 2013
Cornerstone OnDemand, Inc. (NASDAQ:CSOD) was in 10 hedge funds' portfolio at the end of December. CSOD investors should pay attention to a decrease in support from the world's most elite money managers of late.
39.8267
MarketWatch - Aug 17, 2009
RIM, Shanda Games lower in after-hours session. Sep. 25, 2009 at 4:41 p.m. ET; by Carla Mozee ..... Changyou.com Ltd. ADR. Changyou.com Ltd. engages in the development, operation, and licensing of online games. The firm operates its business through ...
Chinese ADRs, Accounting Fraud, and Delisting Risk
Investing Daily - Dec 7, 2012
Since the beginning of December, Chinese stocks suffering double-digit declines include New Oriental Education (NYSE: EDU), Youku Tudou (NYSE: YOKU), Shanda Games (NasdaqGS: GAME), and 51job Inc. (NasdaqGS: JOBS). The SEC lawsuit was ...
Shanda Interactive CEO to take company private
Reuters - Nov 22, 2011
Last month, the company, which spun off its core online games business Shanda Games GAME.O in 2009, said it received an offer from its CEO and key shareholder Chen to take it private.
Giant Interactive: Game Over for Investors?
Motley Fool - Jan 15, 2014
Perfect World is encountering competition in the mobile space coming from Shanda Games (NASDAQ:GAME) and Changyou.com.
NetEase Outscores Rivals in China's Online Game
Barron's - Aug 13, 2015
While hordes of millennial males hooked to computer screens has made China the most lucrative online gaming market, growth has slowed as the market has become increasingly saturated with a plateauing of player numbers and a ballooning of competing ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for GAME to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate GAME's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$6.98 Current Price

$-0.09 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$0.01 NCA Price

Overvalued by 99.88%

$0.03 Book Price

Overvalued by 99.61%


Very Poor Cash Return on Invested Capital over the past 5 years

GAME has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

GAME has lost $445.93 of cash for every $100 invested.
Figures in CNY. Fiscal year ends in December
20112012201320142015
Free Cash Flow 1.24B 1.42B 1.65B 888.76M -6.99M
divided by
Invested Capital -54.63M 714.29M -1.01B 850.17M 6.76M
Cash ROIC -2,265.51% 198.72% -163.98% 104.54% -103.43%

Varying Return on Equity over the past 5 years

GAME has generated strong profits with money shareholders have invested. However, there is a substantial variation in their Return on Equity from year-to-year. This may reflect management's inability to generate consistent returns or may be caused by one-time events. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

GAME has generated $70.12 of Earnings for every $100 of Shareholders' Equity.
Figures in CNY. Fiscal year ends in December
20112012201320142015
Net Income 1.26B 1.14B 1.63B 996.60M -5.02M
divided by
Stockholders' Equity 3.35B 4.25B 594.96M 1.61B 10.18M
Return on Equity 37.80% 26.73% 273.63% 61.75% -49.31%

Good Business Performance over the past 9 years

It's likely GAME has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is GAME has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

GAME has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Free Cash Flow 589.96M 1.10B 1.91B 1.67B 1.24B 1.42B 1.65B 888.76M -6.99M

Very Strong Balance Sheet

GAME has more Cash than its Total Liabilities, resulting in $0.00 Net Cash per share. In other words, if you buy GAME today, the price you're paying for shares is actually $6.98 because $0.00 of Cash is included in the current share price. This much Cash is very healthy. It can help GAME sustain itself in the face of any economic turmoil and makes a stock buyback more of a possibility.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Cash 654.68M 866.30M 2.57B 2.17B 4.05B 3.77B 2.40B 1.74B 3.78M
Current Assets 904.36M 1.58B 3.30B 3.39B 5.76B 6.55B 3.06B 2.34B 6.63M
Total Assets 1.86B 2.44B 4.33B 6.78B 7.96B 8.11B 5.13B 3.65B 13.77M
Current Liabilities 606.87M 1.18B 1.26B 2.14B 3.96B 3.63B 3.73B 1.06B 3.23M
Total Liabilities 856.18M 1.35B 1.51B 2.76B 4.61B 3.86B 4.53B 2.03B 3.58M
Stockholder' Equity 1.00B 1.10B 2.82B 4.02B 3.35B 4.25B 594.96M 1.61B 10.18M
Current Ratio 1.49 1.34 2.61 1.58 1.45 1.81 0.82 2.21 2.05
TL-to-TA 0.46 0.55 0.35 0.41 0.58 0.48 0.88 0.56 0.26

Consistent Reinvestment of Profits over the past 9 years

GAME has consistently retained profits. This may put GAME in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, GAME can greatly improve their long-term economic picture.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Retained Earnings 123.51M 552.64M 1.48B 2.46B 1.67B 2.52B 402.15M 1.43B -4.97M
Retained Earnings Growth - 347.46% 167.84% 66.06% -32.26% 51.30% -84.04% 256.80% -100.35%

Erratic Net Profit Margins over the past 9 years

GAME has had highly erratic net profit margins which are a great cause for concern. This company may operate in a highly volatile industry, or it may just have poor performance. Look at reasons for this inconsistency to understand if there is any reason to look past it.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Net Income 591.90M 935.48M 1.45B 1.29B 1.26B 1.14B 1.63B 996.60M -5.02M
divided by
Revenue 2.32B 3.38B 4.81B 4.50B 5.28B 4.68B 4.34B 3.72B 6.01M
Net Profit Margin 25.48% 27.70% 30.23% 28.61% 23.95% 24.28% 37.47% 26.81% -83.55%

Strong Pricing Power over the past 9 years

GAME has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$68.83 of every $100 worth of sales have been Gross Profit, on average over the past 9 years.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Gross Profit 1.06B 1.89B 2.87B 2.67B 4.59B 2.97B 3.21B 2.78B 6.01M
divided by
Revenue 2.32B 3.38B 4.81B 4.50B 5.28B 4.68B 4.34B 3.72B 6.01M
Gross Margin 45.71% 55.89% 59.78% 59.22% 86.85% 63.45% 73.86% 74.71% 100.00%

Low Capital Intensity over the past 9 years

GAME has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that GAME may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

7.27% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Capital Expenditure 82.70M 46.99M 96.67M 79.30M 161.53M 58.88M 53.55M 50.99M 4.69M
divided by
Net Income 591.90M 935.48M 1.45B 1.29B 1.26B 1.14B 1.63B 996.60M -5.02M
Capital Expenditure Ratio 13.97% 5.02% 6.65% 6.15% 12.77% 5.18% 3.29% 5.12% -93.43%

No Dividend History over the past 9 years

GAME has never distributed dividends or has recently suspended their dividend distribution.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Dividend Paid - - - - - - - - -
divided by
Shares Outstanding 275.00M 275.00M 279.80M 285.40M 283.59M 277.42M 268.70M 271.60M 55.89M
Dividend Paid Per Share - - - - - - - - -
Price at Year End - - 10.30 6.35 3.91 3.12 4.63 5.81 6.98
Dividend Yield - - - - - - - - -

History of Stock Buybacks over the past 9 years

GAME has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in CNY. Fiscal year ends in December
200720082009201020112012201320142015
Shares Outstanding 275.00M 275.00M 279.80M 285.40M 283.59M 277.42M 268.70M 271.60M 55.89M
Stock Bought Back -100.00% - -1.72% -1.96% 0.64% 2.22% 3.25% -1.07% 385.98%
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