Three Reasons to Buy Changyou.com (NASDAQ:CYOU) Today
"Strong Buy" Rated U.S.-Listed Chinese Stocks (February 14, 2012)
(By Michael Liu) Based on recent analyst and expert comments on Changyou.com (NASDAQ:CYOU), we have summarized three reasons to buy CYOU today:
First, record revenue and strong game numbers in Q2:09. Changyou's total revenue for Q2:09 exceeded guidance and increased 8% sequentially and 39% year-over-year to a record of $66.6 million. Numbers on Changyou's games (TLBB and Blade Online) are also strong: Aggregate active paying accounts or APA for its two games increased 5% sequentially and 32% year-over-year to 2.39 million. Average revenue per user, or ARPU, increased 4% sequentially and 6% year-over-year to RMB 186. Aggregate peak concurrent users, or PCU, was flattish sequentially and increased 23% year-over-year to about 950,000.
Second, exciting new catalysts in second half of 2009. At the end of March, Changyou released the Legend of the Shadow expansion pack for TLBB, which succeeded in increasing user stickiness and maintaining growth momentum for TLBB. In early July, the company launched another expansion pack, Xiao Ao Kun Lun, with new game features such as new map skills and in-game activities. Changyou also launched TLBB in Malaysia and singapore in the second quarter. By the fourth quarter, Changyou expects to launch TLBB in Korea. The company's new U.S. subsidiary is working on an English version of TLBB, which Changyou plans to launch in North America by the end of this year.
Third, high profit margin and strong cash position. Changyou's net profit margin was 54% in the last 12 months, the 4th highest among U.S.-listed Chinese stocks (FULL Ranking). As of June 30, 2009, Changyou has cash and cash and bond deposit of $275.9 million, compared to $195 million as of March 31, 2009.
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