[ET Net News Agency, 7 December 2017] Macquarie Research cut its target price for
NetDragon Websoft Holdings (00777) to HK$27 from HK$31.5 partly on 8% dilution from the
rights issue, and maintained its "neutral" rating.
The research house said NetDragon posted nearly break-even for its 3Q results, despite
strong sales growth in both the online game and education businesses. That falls behind
Macquarie's and market expectations, and was primarily due to slightly wider losses in its
China education business, incremental opex from new acquirees and bonus accrual.
Going forward, Macquarie expects continually solid top-line growth, driven by its mobile
games and EM education business (including China), but it is wary of the potential gross
margin decretive from the low-margin EM education projects.
The research house thus trimmed its 2018-19 EPS by 2-4% to Rmb0.37/Rmb0.48 from
Rmb0.38/Rmb0.50, while it raised its 2017 EPS to Rmb0.22 from RMB0.18 on lower 4Q opex for
seasonality of the education business. (KL)
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00777 NETDRAGON
Nominal 
10.500 -0.260 (-2.416%) Others
07/12/2017 10:01
[I-bank focus]Macquarie cuts NetDragon (00777) to HK$27
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