Changyou.Com Ltd (ADR) (CYOU), Giant Interactive Group Inc (ADR) (GA), Shanda Games Limited(ADR) (GAME): Play the Chinese Market with These Three Game Developers

After seeing the success of the game in the Korean market, the company launched the game in China. It should gain popularity since only one person can become the final winner. The game is free to play, earning revenue by selling digital items to enhance gameplay. Within eight hours of its launch, it became the top app in the Apple Store in China. The company expects mobile game revenue of $80.96 million this year and $88.71 the next year.

Shanda Games Limited(ADR) (NASDAQ:GAME) also announced a share repurchase plan of $100 million, which accounts for its 12% market value. This repurchase will continue until May 2014. The program utilizes the company’s excess cash effectively by strengthening its shareholders’ holdings. At the end of first quarter, the company had a net cash balance of $556 million; by May, it had already bought back 14.4 million shares. This is expected to increase the company’s earnings per share from $1.72 this year to $1.97 in 2014.

Conclusion

These three companies have definite plans to capture a larger share of the Chinese gaming market. Changyou.Com Ltd (ADR) (NASDAQ:CYOU) is planning to increase its revenue from its flagship game and plans to launch games on the mobile platform as well. Giant Interactive Group Inc (ADR) (NYSE:GA) is diversifying its revenue stream within the MMO segment and into the web games segment. Shanda Games Limited(ADR) (NASDAQ:GAME) is making big steps into the mobile games market and is enacting its repurchase program to use excess cash.

As a result, I recommend a buy for all three stocks.

Shweta Dubey has no position in any stocks mentioned. The Motley Fool recommends Giant Interactive Group.

The article Play the Chinese Market with These Three Game Developers originally appeared on Fool.com and is written by Shweta Dubey.

Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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