Bear Stearns analyst Antonio Tambunan published a research note yesterday on The9 Limited (ticker: NCTY). Key extracts:
EXPECTATIONS FOR 'GRANADO ESPADA' (GE) REMAIN FAVORABLE, BUT WE PUSH BACK EARNINGS ACCRETION BY ONE QUARTER. Following recent discussions with management, we are pushing back our expectation for earnings accretion from GE to 1Q07 from 4Q06. We do not believe this is a cause for concern, as we have long been believers in "getting it right" over "time to market." MODERATE EXPECTATIONS FOR "SUN". After reviewing player feedback, we continue to have only moderate expectations for "Sun." The9 maintains its target for an early 4Q06 open Beta test and has not ruled out the possibility of commercial launch within the same quarter. TALK OF IMMINENT 'GUILD WARS' AND 'POGO.COM' ANNOUNCEMENTS - POSITIVE FOR THE STOCK. While management continues to remain silent, our industry checks suggest that The9 is expected to announce operating rights for NCsoft’s "Guild Wars" (GW), and some form of alliance to operate Electronic Arts’ online casual game platform "pogo.com." RENEGOTIATION OF "WoW" TERMS WITH VIVENDI UNLIKELY. There is speculation in the industry that WoW licensor Vivendi Universal Games (VUG) is either trying to negotiate higher fees or side-step The9 in distributing the WoW expansion pack "Burning Crusade" as a standalone game titled “WoW 2.