Rapid Growth in Emerging Industries Sparks UBS and Goldman Sachs' Interest in 37 Interactive Entertainment
Source: 37GamesDate: 2017-10-20
SHANGHAI, Oct. 19, 2017 /PRNewswire/ -- As China accelerates its economic transition, new technologies and consumer culture are becoming a new source of the economic growth. Under the current spotlight is the increasingly profitable gaming industry. Recently, 37 Interactive Entertainment was named as one of the "Nifty 50" companies by Goldman Sachs, in accordance with its "New China" portfolio strategy. During July, UBS also provided coverage of the company, which stands amongst the top 3 companies of its peers within the industry.
The Goldman Sachs "Nifty 50" consists of 25 A-shares companies and 25 HKEx/AMEx companies. With the market cap sitting at more than RMB 50 billion, 37 Interactive Entertainment was ranked 12th on the list. According to Goldman Sachs, the "Nifty 50" was determined based on prospective profit growth, profit capability, and return. Goldman Sachs observed and studied the history and anticipated growth rate of these companies. Technical advantages, intellectual property, business model, cash return, etc., are also important factors.
With the technology sector taking up about 50% of the whole stock market, 37 Interactive Entertainment, out of a total of 700 companies that Goldman Sachs has focused on, became one of the "Nifty 50" A-shares companies.
Actually, Goldman Sachs is not the first foreign investment bank that particularly spotlighted 37 Interactive Entertainment. During July, UBS remarked on the estimated value of 37 Interactive Entertainment as "appealing". About a month after the report was published, 37 Interactive Entertainment's semi-annual report showed that the mobile games business of the company saw an astonishing rise in revenues by 196%.
Rapid growth and great performance in the mobile games business put 37 Interactive Entertainment in particular focus. In June, China Securities Index Co. Ltd rearranged the CSI 300 index, and listed 37 Interactive Entertainment as a constituent stock, among Midea, Vanke, and several other giants. In this September, East Money Choice revealed that, among all A-shares companies, 37 Interactive Entertainment received the third highest amount of research from market intel providers. Local as well as international investors continue to closely follow 37 Interactive Entertainment.
The growth rate of 37 Interactive Entertainment is continually above average. As anticipated, 37 Interactive Entertainment's total net profit in the first three quarters of 2017 range from RMB 1.15 billion to RMB 1.35 billion, which is higher than their total net profit in 2016. In Europe, North America, and Asia, the company has established multiple professional publishing teams. In mainland China, the company's mobile games business dominates up 5.1% of the market, just below Tencent and Netease. 37 Interactive Entertainment continues to maintain its momentum in the mobile/browser-based games business, meanwhile also extending its territory into other entertainment industries such as film and television, anime, virtual reality, etc.