当前位置:首页 > 研报详细页

研究报告:Goldman Sachs-Asia Pacific: Technology: Internet Guidance suggests 25%~30% hit to WVAS revenue-060610

研报作者: 来自: 时间:2006-07-11 08:43:36
  • 股票名称
  • 股票代码
  • 研报类型
    (PDF)
  • 发布者
    zho****920
  • 研报出处
  • 研报页数
    14 页
  • 推荐评级
  • 研报大小
    0 KB
研究报告内容

July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 1 July 10,2006 Asia Pacific: Technology: Internet Guidance suggests 25%-30% hit to WVAS revenue What happened Under the direction of the Ministry of Information Industry, China Mobile and China Unicom have announced new policies that affect Wireless Value Added Service (WVAS) providers. These are: 1) WVAS providers must give new SMS, MMS, and WAP service subscribers around 25 days of free mobile content, up from around 8 days previously.2) WVAS providers must cap their monthly subscription fees at Rmb15, and not charge extra for messages.3) China Mobile will ask new WVAS subscribers twice to confirm their intention to subscribe.4) China Mobile’s provincial units will ask existing subscribers to confirm their intention to continue subscribing; some provincial units will stop charging those who do not reply.5) China Mobile will cancel WAP subscriptions that have been inactive for more than four months, down from seven months previously.6) China Unicom will convert all charge-by-message subscriptions to charge-by-month subscriptions. Implications Several WVAS providers have stated that these new policies will materially adversely impact their revenue. KongZhong forecast that the changes will reduce FY2006 revenue by around 15%, and (by implication) 2H2006 revenue by 30%; Sohu quantified the impact as reducing 3Q2006 and 4Q2006 WVAS revenue by around 25% each. We are cutting SMS, MMS, and WAP revenue by around 30% for 3Q2006 for companies with WVAS exposure. For 2007E, we are keeping our revenue growth projections at similar trend rates, but from lower base points. We forecast that EBIT margins will contract a few hundred basis points. We are therefore cutting our 2007EEPS estimates for the five stocks by 5%-30%. Our ratings and reduced target prices follow: Tom Online (Tomo, Sell, US$11.3, down 37%); KongZhong (Kong, Neutral, US$9.0, down 25%); Sina (Sina, Buy, US$28.0, down 10%); Sohu (Sohu, Neutral, US$28.0, down 3%); and Tencent (0700.HK, Buy, HK$18.5, down 3%). Downgrading Tom Online to Sell from Neutral Tom Online is trading at 19X 2006E and 15X 2007E our revised non-GAAPEPADS. These latest policies reduce earnings visibility for all WVAS operations and therefore change the multiple that we apply to pure-play WVAS earnings. We view Tom Online’s multiples as stretched versus those of its pure-play WVAS peers: KongZhong (on our estimates), Linktone (IBES), and Hurray! (IBES) are at 10X-11X 2006 earnings, and Tom Online has relatively less net cash per share. Risks China Mobile and China Unicom could take further actions unfavorable to WVAS providers. SUMMARY Company Jul 7 Closing price Rating Ticker % upside Sina US$22.8 Buy Sina 23% Tencent HK$15.5 Buy 0700.HK 19% KongZhong US$6.7 Neutral Kong 35% Sohu US$23.6 Neutral Sohu 19% Tom Online US$13.7 Sell Tomo -17% Company Old 2007ENew 2007EOld New Tom Online US$72 US$50 US$18.0 US$11.3 KongZhong US$37 US$28 US$12.0 US$9.0 Sina US$73 US$64 US$31.0 US$28.0 Sohu US$46 US$43 US$29.0 US$28.0 Tencent Rmb1,264 Rmb1,178 HK$19.0 HK$18.5 Non GAAPNet income (mn) Target price UPCOMINGEVENTS 2Q2006 earning announcements for Tom Online, KongZhong, Sina, Sohu, and Tencent in August 2006. RELATEDRESEARCH ACTION: Sell Tom Online: Earnings visibility greatly reduced; downgrading to sell. July 10,2006 Tom Online/KongZhong Initiation: Expanding industry but diminishing margins, June 21,2006 See the Financial Advisory Disclosure section of this document for important disclosures about transactions in which The Goldman Sachs Group Inc. or an affiliate is acting as the financial advisor. James Mitchell, CFA +852-2978-1450 | james.mitchell@gs.com Goldman Sachs (Asia) L.L.C. Kit Low +852-2978-0856 | kit.low@gs.com Goldman Sachs (Asia) L.L.C. Helen Zhu +852-2978-0048 | helen.zhu@gs.com Goldman Sachs (Asia) L.L.C. Ada Ho +852-2978-1261 | ada.ho@gs.com Goldman Sachs (Asia) L.L.C. Analysts employed by non-US affiliates are not required to take the NASD/NYSE analyst exam. The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Customers in the US can receive independent, third-party research on companies covered in this report, at no cost to them, where such research is available. Customers can access this independent research at .gs.com or call 1-866-727-7000. For Reg AC certification, see the text preceding the disclosures. For other important disclosures go to /research/hedge.html. The Goldman Sachs Group, Inc. Global Investment Research July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 2 Quantifying the initial revenue impact: 30% hit to SMS, MMS, WAP The five companies that we cover with WVAS exposure generate between 70% (Tom Online, Sohu) and 90% (Sina, KongZhong) of their WVAS revenue through China Mobile, and the balance largely through China Unicom. The fact that Hurray! (which derives most of its revenue via China Unicom) issued a press release suggests that services through China Unicom (as well as China Mobile) will be materially adversely affected. We assume that the new policies largely impact Short Message Services (SMS), Multimedia Message Services (MMS), and Wireless Application Portal (WAP) activities, which together account for around 75% of WVAS revenue for the listed companies; Interactive Voice Recordings (IVR) and Ring Back Tones (RBT) appear less affected. The fact that KongZhong (which derives most of its revenue from WAP) issued a revenue warning suggests that WAP services will be materially adversely affected. We believe that Tom Online (around 30%) and Tencent (around 25%) derive more of their WVAS revenue from IVR and RBT than peers. The KongZhong and Sohu press releases imply 25%-30% downside revisions to 2H2006 WVAS revenue budgets. We believe the 25%-30% revisions include the impact of both an earlier batch of policy changes (announced in late June) and this second batch. Tom Online had earlier stated that the June policy changes created 15% downside risk to its 3Q06 revenue, from which we infer that the second batch creates an additional 15% downside risk. Exhibit 1: KongZhong’s wireless revenue is 100% of its total revenue Wireless revenue as percentage of 1Q06 total revenue 29% 36% 18% 15% 64% 27% 7% 2% 8% 7% 30% 7% 6% 3% 35% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% KongZhong Tom Online Sina Tencent Sohu As % of 1Q06 total revenue SMSMMS/ WAP/JAVAIVR/RBT Source: Company data, Goldman Sachs Research estimates. Quantifying ongoing revenue impact: 15%-20% hit The KongZhong and Sohu guidance applies to 4Q2006 as well as 3Q2006. We view the policy changes as having ongoing effects that should structurally reduce WVAS revenue opportunities, since churn rates should increase for what is already a short subscriber life industry. The ~25 day free subscription period will apply to all new subscribers each quarter from now on, not just in 3Q2006. That said, we assume that WVAS providers partially mitigate the impact of these policies over time through more aggressive customer-acquisition campaigns. We are therefore reducing our 2007ESMS, MMS, and WAP revenue estimates by 15%-20% versus our prior estimates. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 3 Quantifying the effect on EBIT margin: 1 to 5pp lower We assume that the WVAS providers cut both variable (revenue sharing with China Mobile, transmission fees, business taxes) and non-variable (marketing, R&D, G&A) expenses to compensate for the revenue reductions, so that EBIT margins fall by 1-5pp on company-wide bases versus our prior estimates. (A 1pp lower group EBIT margin for Tencent and Sohu implies a 4pp lower WVAS EBIT margin, given WVAS is one quarter of each company’s revenue.) WVAS margins may fall further than we forecast if: The WVAS providers rely on staff attrition (many staff are on one year contracts) rather than active headcount reductions to control expenses The WVAS providers increase marketing spending as a proportion of revenue in order to resume revenue growth. China Mobile does not share the pain with the WVAS providers. For example, China Mobile may force the WVAS providers to still pay it transmission fees on each SMS message sent during free trial periods, meaning free trial periods act as heavy loss-leaders for WVAS providers. Given Tom Online’s press release cited an average subscriber life of around three months currently, negative margins for the first of the three months would materially damage per subscriber and industry- wide margins and returns. We assume that implementation will be thorough This batch of policy changes differs from the June batch (11 suggested policy changes, of which China Mobile implemented 10 and deferred one) in that: China Mobile communicated the new policies explicitly and directly to all WVAS providers. China Mobile has laid out a clear implementation timetable. Five WVAS providers have issued press releases in response, whereas previously only Tom Online did so. Several of the press releases cited the Ministry of Information Industry as the ultimate instigator of these policies. If this is correct, then we believe that regulatory pressure will ensure that provincial units of China Mobile and China Unicom obey central directives. No obvious counter-balancing benefits for WVAS providers We view these policy changes as reducing future earnings power and future earnings visibility for WVAS providers. Customers should benefit from cheaper and easier-to-cancel services, and may respond by sampling new WVAS products more frequently than in the past. However, we expect higher churn rates and lengthier free periods to result in a net reduction in paying subscribers henceforward. Industry commentators have responded to past policy changes by arguing that the listed companies would emerge stronger at the expense of unlisted peers, but this set of changes appears to affect big and small WVAS providers alike. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 4 Multiples flat-to-lower on reduced EPS for pure WVAS providers For Tom Online, we reduce our target P/E multiple from13X 2007 non-GAAPEPS to 12X; for KongZhong, we leave our target P/E multiple at 12X 2007 non-GAAPEPS. We believe that our forecast revenue reductions are fair, but our margin estimates may be optimistic. Therefore, we have less confidence in the pure-play WVAS providers meeting our 2007 EPS estimates than we did before these policy changes. We previously awarded a one point higher P/E multiple to Tom Online than to KongZhong due to Tom Online’s superior track record and the modest revenue contribution from its portal. We now doubt that investors will differentiate multiples too far within a sector subject to so many exogenous shocks; also KongZhong has more net cash per share than Tom Online. We view 12X 2007 EPS as fair for WVAS providers given their earnings volatility, apparently slow trend earnings growth rates (taking into account occasional policy adjustments), and low forecast ROEs. Exhibit 2 illustrates multiples for listed WVAS providers in China and elsewhere. We believe the multiples of WVAS providers outside China have limited relevance to those operating in China because: The Chinese WVAS providers are unusually dependent on a single customer, China Mobile. That customer’s policies have changed frequently and with onerous consequences. Exhibit 2: WVAS providers trade at divergent multiples Global valuation comparison table Price Current Year Market cap EV/EBITDA (X) EV/FCF (X) EV/revenues (X) Companies 7/7/2006 Ticker Rating year end (US$mn) 20052006E 2007E 20052006E 2007E 20052006E 2007E 20052006E 2007E Pure play wireless Tom Online US$13.67 TOMOSell 2006 Dec 721 16.4 18.9 14.6 13.5 15.7 12.2 16.5 26.1 15.2 3.9 3.5 2.7 KongZhong US$6.65 KONGNeutral 2006 Dec 237 10.7 9.8 8.6 5.2 5.2 3.2 5.3 169.7 4.7 1.5 1.1 1.0 Linktone US$5.14 LTONNC 2006 Dec 129 11.4 10.9 8.7 — 6.4 5.0 — — — 1.3 1.0 0.9 Hurray! US$5.20 HRAYNC 2006 Dec 114 6.0 10.4 7.9 — 3.0 2.0 — — — 0.6 0.5 0.4 China internet portals Sina Corp US$22.83 SINABuy 2006 Dec 1,338 28.9 28.4 20.9 18.4 19.9 14.0 15.0 15.7 11.6 5.2 5.0 3.8 Sohu.com US$23.62 SOHUNeutral 2006 Dec 938 30.7 27.5 21.5 26.9 23.1 18.7 52.2 31.3 25.6 7.9 6.3 5.1 Tencent HK$15.50 0700.HKBuy 2006 Dec 3,568 62.9 26.6 21.8 46.3 20.5 15.8 33.3 27.9 23.8 18.6 9.3 7.0 US wireless Infospace US$22.1 INSPNC 2006 Dec 689 13.8 — 195.4 7.6 15.2 13.6 — — — 1.6 1.4 1.3 Japanese wireless Cybird ¥114,0004823.TNC 2007 Mar 231 67.3 66.6 52.7 — — — — — — 2.0 1.4 1.3 Index Holdings ¥108,0004835.TNC 2006 Aug 2,018 41.5 37.1 35.3 72.3 25.9 23.0 — — — 21.5 1.4 1.8 European wireless Index Multimedia € 7.8 MUL.PANC 2006 June 84 19.0 6.7 6.0 11.1 4.5 4.0 — — — 1.0 0.4 0.4 Chinese telcos China Mobile HK$45.40941.HKNeutral 2006 Dec 115,151 17.6 15.9 15.9 6.4 5.9 5.8 21.6 14.7 14.8 4.3 3.5 3.1 China Unicom HK$7.10762.HKBuy 2006 Dec 11,394 18.4 16.7 15.2 4.4 4.0 3.8 11.0 9.0 8.4 1.4 1.3 1.2 China Telecom HK$2.50728.HKNeutral 2006 Dec 26,267 9.1 8.6 8.1 3.8 3.7 3.6 17.7 12.7 10.0 1.9 1.9 1.8 P/E (X) Source: Company data, Bloomberg, Goldman Sachs Research estimates. Multiples fractionally higher on lower EPS for hybrid companies For Sina, Sohu, and Tencent (which we characterize as hybrid WVAS - internet businesses) we increase our target P/E multiples by one point, from 25X 2007 non-GAAPEPS to 26X. We have historically valued their online advertising and internet VAS activities at 30X forward earnings, double the 12X-15X we use for their WVAS activities. So, with internet activities contributing a rising proportion of revenue and earnings we believe that overall business mixes are improving. For Sina, we model internet activities contributing 66% and WVAS 33% of revenue in 2007 (similar to Sohu in 2005). For Tencent and Sohu, we model internet activities contributing 83% and WVAS 17% of revenue in 2007 (similar to Netease in 2004). Sohu should, on this theory, enjoy a two-point higher P/E multiple than Sina, but we bias our Sina multiple upward to reflect its industry leader status, heavy net cash position, and open shareholder register. The increased target multiple means that our target prices for these hybrid stocks fall by less than our earnings estimates. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 5 Exhibit 3 illustrates that the three hybrid stocks are trading at similar multiples to Chinese advertising and consumer growth stocks. We believe that the three hybrid stocks offer similar ROEs, similar cash flow conversion, and similar short-term growth rates to Chinese offline advertising and consumer growth stocks, yet substantially faster long-term growth. By comparison, Yahoo is still growing advertising revenue at over 20% per year, whereas the American equivalents of the offline advertising and consumer growth stocks typically are not. Exhibit 3: Sina, Sohu and Tencent are trading at similar multiples to Chinese advertising and consumer growth stocks P/E,2006EP/E,2007E FCF as % earnings,2007EROE,2007E Earnings growth,2007E- 2008E Advertising stocks Focus Media 38.323.461% 15% 36% Clear Media 32.822.276% 12% 58% Phoenix Satellite TV 31.225.061% 19% 33% Baidu 108.858.1145% 23% 40% Average 52.832.286% 17% 42% No-MVAS growth stocks Ctrip 43.330.174% 37% 34% Mengniu Dairy 22.518.268% 23% 22% Ports Internationl 27.120.265% 37% 18% Wumart 32.825.1 -4% 16% 21% Average 31.423.451% 28% 24% Hybrid stocks Sina 28.420.961% 15% 24% Sohu 27.521.578% 20% 29% Tencent 26.621.896% 38% 29% Average 27.521.478% 24% 27% Source: Company data, Goldman Sachs Research estimates. Valuations if WVAS margins fall further than we expect Listed companies with exposure to WVAS have historically managed costs down in tandem with revenues following revenue declines; Netease’s WVAS division only moved to negative gross margins after its revenue had fallen 75% from peak levels. That said, this revenue shock is unusually immediate, and operating expenses are typically less variable than costs of services. We therefore also consider how to value these stocks in a scenario where margins collapse far further than we expect: Using a sum-of-the-parts analysis and applying no value to WVAS activities,30X 2007E fully taxed earnings to internet activities, and cash to cash we estimate that Sina would be worth US$26 per share; Sohu US$27; and Tencent HK$17. Of the WVAS providers we cover, KongZhong has US$3.3 net cash per share, whereas Tom Online has under US$0.5 (see Exhibit 4). We do not view book value as a useful floor valuation metric for pure-play WVAS companies given difficulty realizing book value if earnings are impaired. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 6 Exhibit 4: KongZhong has the most net cash relative to its share price Gross cash and net cash,1Q2006 Company Share price Gross cash (US$ mn) Net cash (US$ mn) Net cash per share Net cash as % of share price KongZhong US$6.65 117117 US$3.28 49% Sina US$22.83 304304 US$5.19 23% Tencent HK$15.50 210333 HK$1.47 9% Sohu US$23.62 12458 US$1.46 6% Tom Online US$13.67 10126 US$0.48 4% Source: Bloomberg, Company data, Goldman Sachs Research estimates. Tom Online – 94% of 1Q06 revenue from WVAS Tom Online stated at an investor conference call on June 12 that the first batch of policy changes could reduce its 3Q06 revenue by 15% versus its prior assumptions. The company issued a press release on July 7 noting that the second batch of policy changes could have a “negative and significant impact” on revenue, beyond the initial 15%. The press release cited less effective subscriber acquisition campaigns, higher churn rates, and shorter subscription durations. During 1Q06, Tom Online derived 38% of its WVAS revenue from SMS; 27% from IVR; 17% WAP; 9% from MMS; and 8% from other services. We had already reflected the first batch of policy changes and the Infomax acquisition in our published estimates. We now cut our 3Q06 WVAS revenue by 22% and 2007 WVAS revenue by 20%, reducing our 2006 GAAPEPS by 23% to US$0.82, and 2007 by 29% to US$0.97. Our 12-month target price falls from US$18 to US$11.3, based on 12X instead of 13X 2007 non-GAAPEPADS. KongZhong – 100% of 1Q06 revenue from WVAS KongZhong issued a press release reducing 2006 revenue guidance to Rmb85-105 mn, from Rmb110- 115 mn, while reiterating its 2Q06 guidance. This implies that KongZhong is trimming its 2H2006 revenue guidance by Rmb17 mn at the mid-point, or around 30%. During 1Q06, KongZhong derived 32% of its WVAS revenue from WAP; 29% from SMS; 28% MMS; 4% from JAVA ; 4% from IVR; and 3% from RBT. We cut our 3Q06 WVAS revenue by 26% and 2007 WVAS revenue by 20%, reducing our 2006 GAAP EPADS by 27% to US$0.65 and 2007 by 33% to US$0.72. Our 12 month target price falls from US$12 to US$9, based on 12X 2007 non-GAAPEPADS. Sina – 49% of 1Q06 revenue from WVAS Sina issued a press release noting that the policy changes will have a “significant, negative” impact on its WVAS revenue. During 1Q06,49% of Sina’s revenue flowed from WVAS, of which 71% was from SMS; 10% from MMS and WAP; 14% from IVR and RBT; and 5% from other services. Cutting our 3Q06 WVAS revenue by 27% and 2007 WVAS revenue by 18% reduces our 2006 GAAPEPS by 11% to US$0.69 and 2007 by 14% to US$0.94. Our 12 month target price falls from US$31 to US$28, based on 26X rather than 25X 2007 non-GAAPEPS. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 7 Sohu – 26% of 1Q06 revenue from WVAS Sohu issued a press release estimating that the policy changes will reduce its 3Q2006 and 4Q2006 WVAS revenue by US$1.5-2.5 mn per quarter, or 18%-30% versus its 1Q2006 base. During 1Q2006, 26% of Sohu’s revenue flowed from WVAS, of which 56% was SMS; 30% WAP; and 12% IVR and RBT. Cutting our 3Q2006 WVAS revenue by 29% and 2007 WVAS revenue by 20% reduces our 2006 GAAP EPS by 6% to US$0.76, and 2007 by 7% to US$0.99. Our 12-month target price falls from US$29 to US$28, based on 26X rather than 25X 2007 non-GAAPEPS. Tencent – 25% of 1Q06 revenue from WVAS Tencent issued a press release on July 7 noting that the policy changes could “negatively impact their businesses in the coming quarters”. During 1Q2006,25% of Tencent’s revenue flowed from WVAS, of which 80%-90% was from China Mobile and the rest from China Unicom and the fixed-line carriers. We estimate that the WVAS composition by product type was 67% SMS; 24% IVR and RBT; and 9% MMS and WAP. Cutting our 3Q2006 WVAS revenue by 23% (not 30% given IVR insulation) and 2007 WVAS revenue by 17% reduces our 2006 IFRSEPS by 4% to HK$0.51, and 2007 by 7% to HK$0.67. Our 12-month target price falls from HK$19 to HK$18.5, based on 26X rather than 25X 2007 non-IFRSEPS. China Mobile and China Unicom - minimal financial impact We believe that the detrimental impact on the carriers will be negligible. For China Mobile, we estimate the maximal adverse revenue impact is around 1% (and less for China Unicom). A back-of- the-envelope analysis follows: New business revenue accounted for 21% of China Mobile’s total revenue in 2005. We assume that voice VAS (voicemail, mobile secretary, IVR etc.), which was 5%, should not be affected by these policies. SMS accounted for 10% of total revenue, of which 78% was peer-to-peer and 22% commercial. Assuming a 'worst case' decline of 20% for commercial SMS volumes, the potential impact on China Mobile’s total revenue would be around 0.4%. China Mobile may continue to generate SMS revenue during free trial periods, if the WVAS providers pay it transmission fees. The remaining non-SMS data from WAP and other makes up about 3.7% of total revenues. China Mobile has indicated that the WVAS revenue share is not reflected in the WAP revenue (1.5% of total revenues) and only in the 'other VAS' (2.2% of total revenues). In fact, only an unspecified component of this 'other VAS' is actually the revenue share with WVAS providers. Assuming conservatively that all of it is derived from WVAS revenue share and a worst-case 30% decline in this revenue, potential revenue loss would be limited to 0.7% of total revenue. In total, therefore we estimate worst-case revenue exposure for China Mobile would be 1.1% of total revenue, and believe that the more likely case is noticeably <1%. China Unicom has even lower new business reliance than China Mobile. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 8 Appendix 1: Forecast financial statements Exhibit 5: Summary of forecast revenue, earnings, and target price adjustments Estimate change,% Target price Company 3Q2006EFY2007E 3Q2006EFY2007E % change Tom Online -22% -20% -44% -31% -37% KongZhong -26% -20% -41% -25% -25% Sina -27% -18% -18% -12% -10% Sohu -29% -20% -11% -6% -3% Tencent -23% -17% -6% -7% -3% WVAS revenue % change Net income % change Source: Goldman Sachs Research estimates. Exhibit 6: Tom Online quarterly and annual profit model, US$ mn (US$ mn) 1Q20052Q20053Q20054Q20051Q20062Q2006E 3Q2006E 20052006E 2007E 2008E WVAS 33.440.743.244.6 45.5 46.2 41.5 162176 226 267 Advertising 1.61.82.63.2 2.7 3.3 3.8 914 19 24 Commercial enterprise solutions 0.30.30.20.3 0.4 — — 1 — — — Internet Access — — — — — — — 0 — — — Total revenues 35.342.845.948.148.649.445.3172 191 245 291 COGS — — — — — — — — — — — Cost of services (21.4) (25.0) (25.7) (26.7) (29) (29) (27) (99) (112) (141) (169) Stock based compensation (0) (0) (0) (0.1) (0) (0) Cost of revenues (21) (25) (26) (27) (29) (29) (27) (99) (112) (141) (169) Gross profits 13.9 17.8 20.3 21.4 20.0 20.8 18.5 73 79 103 122 Selling and marketing (1.2) (2.0) (1.8) (2.8) (1.5) (2.5) (2.3) (8) (9) (13) (14) General and administrative (4.1) (5.9) (6.4) (5.8) (6.5) (6.7) (7.3) (22) (28) (37) (44) R&D (0.3) (0.4) (0.4) (0.5) (0.4) (0.5) (0.5) (2) (2) (2) (3) Amortization of intangibles (0.3) (0.2) (0.2) (0.2) (0.2) (0.4) (0.4) (1) (1) — — Provision for impairment of goodwill, intangibles — — — — — — — — — — — Stock based compensation (0.8) (0.8) (0.8) (3) (3) (3) Total operating expenses (5.8) (8.5) (8.8) (9.2) (9) (11) (11) (32) (43) (56) (63) Reported operating income 8.1 9.3 11.5 12.1 10.6 10.0 7.4 41 36 47 59 Interest (expense)/ income 1.10.70.30.6 0.5 (0.0) (0.0) 30 3 4 Exchange rate gain — — 1.1 — 0.9 0.4 5.4 18 5 Gain on disposal — 0.4 — — — — — — — Pretax income 9.2 10.4 12.9 12.7 12.1 10.4 12.7 45455563 Income tax (0.0) (0.1) 0.1 0.0 0.1 (0.2) (0.3) 0 (1) (3) (5) Minority interests 0.0 (0.1) (0.1) (0.0) 0.0 (0.0) (0.1) (0) (0) (0) (0) Non-GAAP net profit (ex-SBC and f/x) 9.210.211.812.712.010.57.844395061 Basic EPS (US$) 0.24 0.25 0.31 0.31 0.29 0.24 0.29 1.101.031.231.36 Diluted EPS (US$) 0.22 0.24 0.31 0.30 0.28 0.24 0.29 1.071.021.221.34 Basic earnings per ADS (US$) 0.19 0.20 0.25 0.24 0.23 0.19 0.23 0.880.830.981.09 Diluted earning per ADS (US$) 0.17 0.20 0.25 0.24 0.23 0.19 0.23 0.850.820.971.08 Non-GAAP basic EPS (US$) 0.240.250.280.310.280.250.181.070.921.191.43 Non-GAAP diluted EPS (US$) 0.220.240.280.300.280.250.181.040.911.171.42 Non-GAAP basic earnings per ADS (US$) 0.190.200.220.250.230.200.150.850.730.951.15 Non-GAAP diluted earning per ADS (US$) 0.170.200.220.240.220.200.150.830.720.941.13 Source: Company data, Goldman Sachs Research estimates. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 9 Exhibit 7: KongZhong quarterly and annual profit model, US$ mn (US$ mn) 1Q20052Q20053Q20054Q20051Q20062Q2006E 3Q2006E 20052006E 2007E 2008E 2.5G revenue 13.713.514.414.7 17.9 17.4 12.2 5660 69 90 2G revenue 3.24.85.97.3 10.0 12.9 9.7 2143 46 49 Total revenues 17.018.320.222.127.930.322.078 102 115 139 Cost of services (6.2) (6.7) (8.1) (10.2) (12) (13) (10) (31) (45) (53) (64) Gross profits 10.8 11.6 12.1 11.9 16.2 17.0 12.2 46 58 62 75 R&D (1.5) (2.1) (2.3) (2.6) (3.2) (3.3) (2.4) (8) (11) (13) (15) Selling and marketing (1.0) (1.2) (1.3) (1.8) (3.3) (3.2) (3.2) (5) (13) (11) (13) General and administrative (1.9) (1.9) (1.9) (1.7) (2.4) (2.5) (2.7) (7) (11) (11) (15) Class action lawsuit settlement (0.9) (0.3) (3.6) (0.0) (5) — — — Amortization of deferred stock compensation (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0) (0) — — Stock based compensation (0.4) (0.6) (0.6) (2) (2) (2) Total operating expenses (5.3) (5.6) (9.2) (6.2) (9.2) (9.7) (9.0) (26) (37) (37) (44) Reported operating income 5.4 6.0 2.9 5.7 6.9 7.3 3.2 20 20 25 30 Interest (expense)/ income 0.50.60.70.8 1 1 1 33 3 4 Other expense — — 1 — — — 1 Pretax income 5.9 6.6 3.6 6.6 9.0 8.1 4.0 23252934 Income tax (0.0) (0.1) (0.1) (0.3) (0.4) (0.5) (0.2) (1) (1) (3) (5) Net profits attributable to shareholders 5.9 6.6 3.4 6.3 8.6 7.6 3.7 2223 26 29 Non-GAAP net profit (ex-SBC and f/x) 5.9 6.6 3.4 6.3 7.9 8.1 4.3 22 24 28 31 Basic earnings per ADS (US$) 0.17 0.19 0.10 0.18 0.25 0.22 0.11 0.640.670.740.83 Diluted earning per ADS 0.17 0.19 0.10 0.17 0.24 0.21 0.10 0.620.650.720.81 Non-GAAP basic earnings per ADS (US$) 0.230.230.120.640.700.800.89 Non-GAAP diluted earning per ADS (US$) 0.220.230.120.620.680.780.87 Source: Company data, Goldman Sachs Research estimates. Exhibit 8: Sina quarterly and annual profit model, US$ mn (US$ mn) 1Q20052Q20053Q20054Q20051Q20062Q2006E 3Q2006E 20052006E 2007E 2008E Advertising 16.6 20.4 23.0 25.0 22.2 27.8 31.4 85.0 115.3 159.5 209.5 MVAS 26.5 22.6 24.1 24.8 22.7 21.1 16.6 98.1 78.7 88.3 103.1 Other operations 2.7 3.1 2.5 2.1 1.8 1.4 1.5 10.5 7.0 16.8 31.1 Total revenues 45.8 46.1 49.6 52.0 46.7 50.3 49.5 193.6 201.1 264.7 343.7 Advertising (5.9) (6.5) (7.4) (7.8) (7.9) (9.2) (10.1) (27.6) (38.1) (52.6) (69.1) MVAS (8.7) (7.4) (8.3) (9.5) (9.4) (8.8) (7.3) (33.8) (33.4) (37.7) (45.0) Other operations (0.4) (0.4) (0.4) (0.5) (0.3) (0.3) (0.4) (1.7) (1.4) (3.5) (6.5) Stock-based compensation (0.4) (0.4) (0.4) - (1.4) (1.4) (1.4) Cost of revenues (14.9) (14.3) (16.1) (17.8) (18.0) (18.6) (18.1) (63.1) (74.3) (95.2) (122.0) Gross profit 30.9 31.8 33.5 34.2 28.7 31.7 31.5 130.4 126.7 169.5 221.7 Sales and marketing (11.5) (10.7) (15.7) (13.8) (11.5) (11.6) (12.3) (51.7) (48.4) (64.7) (82.8) Product development (3.7) (3.5) (3.8) (4.2) (4.3) (4.6) (4.5) (15.3) (18.4) (21.2) (27.5) General and administrative (4.7) (5.1) (4.2) (4.8) (4.6) (4.7) (4.7) (18.8) (19.2) (25.3) (32.3) Stock-based compensation - - (1.2) (1.2) (1.2) - (4.7) (4.7) (4.7) Amortization of intangibles (1.0) (1.0) (0.6) (0.5) (0.5) (0.5) (0.5) (3.2) (1.9) (1.9) (1.9) Others - - - - Total expenses (20.9) (20.4) (24.4) (23.3) (22.0) (22.6) (23.1) (88.9) (92.5) (117.7) (149.1) Operating income 10.0 11.4 9.2 10.9 6.6 9.1 8.4 41.5 34.2 51.7 72.6 Other income 1.6 1.6 1.7 1.8 1.9 2.2 2.6 6.6 9.3 11.6 12.8 Amortization of convert. (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.7) (0.7) (0.7) - Associates (0.6) (0.9) (1.0) (0.4) (0.3) (0.1) (0.1) (2.8) (0.6) - - Impairment of investment (1.3) 0.0 2.2 (0.2) 1.7 - 1.0 2.1 - - Pretax profit 10.8 10.6 9.7 14.3 7.8 12.6 10.7 45.5 44.3 62.7 85.4 Income taxes (0.5) (0.7) (0.6) (0.6) (0.8) (1.0) (0.8) (2.4) (3.7) (7.1) (13.5) GAAP net profit 10.3 10.0 9.1 13.8 7.0 11.6 9.8 43.1 40.6 55.6 71.9 Non GAAP net profit 11.5 12.5 10.0 12.4 9.6 12.0 12.0 46.4 47.1 64.2 79.8 GAAPEPS 0.20 0.19 0.17 0.26 0.13 0.22 0.18 0.82 0.76 1.04 1.34 Fully diluted GAAPEPS 0.18 0.17 0.15 0.23 0.12 0.20 0.17 0.75 0.69 0.94 1.21 Fully diluted non GAAPEPS 0.20 0.21 0.17 0.21 0.16 0.21 0.20 0.79 0.80 1.09 1.34 Source: Company data, Goldman Sachs Research estimates. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 10 Exhibit 9: Sohu quarterly and annual profit model, US$ mn (US$ mn) 1Q20052Q20053Q20054Q20051Q20062Q2006E 3Q2006E 20052006E 2007E 2008E Advertising 14.9 17.0 18.8 20.3 20.1 22.6 25.0 70.9 95.2 125.4 159.4 WVAS 6.0 6.4 6.8 7.2 8.0 7.7 5.8 26.3 27.7 28.4 31.1 Other 2.9 2.6 2.7 2.9 3.1 3.1 3.2 11.1 12.8 13.4 16.5 Total revenues 23.7 25.9 28.3 30.5 31.3 33.4 34.0 108.3 135.8 167.3 206.9 Advertising (3.5) (4.3) (4.9) (5.4) (5.1) (5.7) (6.3) (17.7) (23.9) (31.8) (40.6) WVAS (2.2) (2.8) (3.4) (3.4) (3.8) (3.5) (2.9) (12.0) (13.4) (14.2) (15.8) Other (1.8) (1.4) (1.6) (1.6) (1.6) (1.6) (1.6) (6.6) (6.6) (6.3) (6.4) Stock based compensation (0.4) (0.3) (0.3) (1.1) (1.3) (1.3) Cost of revenues (7.5) (8.4) (9.9) (10.4) (10.9) (11.0) (11.1) (36.3) (45.1) (53.6) (64.1) Gross profit 16.2 17.4 18.4 20.1 20.4 22.3 22.9 72.0 90.7 113.7 142.8 Product development (3.1) (3.6) (3.4) (3.6) (3.8) (4.3) (4.4) (13.7) (17.3) (21.4) (26.4) Sales and marketing (4.7) (4.3) (4.6) (7.7) (6.1) (6.4) (7.1) (21.3) (27.4) (35.1) (42.9) General and administrative (2.4) (2.4) (2.8) (2.5) (2.7) (2.8) (3.0) (10.2) (11.6) (15.0) (18.6) Amortization of intangibles (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (1.9) (2.0) (2.0) (2.0) Stock based compensation (1.4) (1.0) (1.0) (4.4) (5.2) (5.2) Operating expenses (10.7) (10.7) (11.4) (14.2) (14.4) (15.1) (15.9) (47.2) (62.7) (78.7) (95.2) Operating profit 5.5 6.7 7.0 5.8 6.0 7.3 6.9 24.8 28.1 35.0 47.6 Other expense (0.2) (0.1) 0.4 2.4 (0.1) - - 2.4 - - - Other income 0.6 0.6 0.6 0.8 0.5 0.5 0.5 2.5 2.2 4.3 5.0 Pretax profit 5.8 7.2 7.9 8.9 6.5 7.8 7.4 29.8 30.2 39.3 52.7 Income tax (0.1) (0.1) 0.1 0.0 (0.4) (0.6) (0.6) (0.0) (2.3) (2.9) (4.0) Net income, post SBC 5.7 7.1 8.0 8.9 6.0 7.2 6.9 29.8 27.9 36.3 48.7 Net income, pre SBC 5.7 7.1 8.0 8.9 7.8 8.5 8.1 29.8 33.4 42.9 55.3 Net income, pre SBC, adj. for dilutive 5.9 7.3 8.2 9.1 7.9 8.6 8.3 30.5 34.1 43.5 55.9 EPS, post SBC 0.16 0.20 0.22 0.24 0.16 0.20 0.19 0.82 0.76 0.99 1.33 Diluted EPS, pre SBC 0.15 0.18 0.21 0.23 0.20 0.22 0.21 0.77 0.86 1.10 1.41 Diluted EPS, post SBC 0.15 0.18 0.21 0.23 0.16 0.19 0.18 0.72 0.93 1.24 Source: Company data, Goldman Sachs Research estimates. Exhibit 10: Tencent quarterly and annual profit model, Rmb mn (Rmb mn) 1Q20052Q20053Q20054Q20051Q20062Q2006E 3Q2006E 20052006E 2007E 2008E Mobile VAS 134 136 121 125 163 164 130 517 593 591 643 Internet VAS 149 170 205 263 437 442 503 787 1,936 2,557 3,223 Online advertising 15 25 35 38 42 49 62 113 218 299 401 Other 2 2 2 3 4 4 4 10 14 18 22 Total revenues 3003343634296456596981,426 2,761 3,464 4,289 Mobile VAS (50) (46) (45) (49) (59) (61) (50) (190) (221) (233) (270) Internet VAS (43) (53) (61) (74) (96) (96) (105) (231) (411) (545) (709) Online advertising (6) (7) (9) (12) (17) (18) (21) (35) (77) (107) (148) Other (3) (3) (3) (5) (4) (5) (5) (15) (20) (25) (31) Cost of revenues (102) (109) (119) (140) (176) (181) (180) (470) (729) (910) (1,158) Gross profit 199 225 244 289 470 478 518 957 2,032 2,555 3,131 Other gains, net 12 15 16 30 22 20 21 73 81 81 99 Sales and marketing (39) (46) (52) (62) (80) (94) (100) (198) (382) (480) (536) General and administrative (69) (76) (91) (112) (130) (159) (167) (348) (636) (845) (1,008) Operating profit 103 119 117 145 282 245 272 484 1,094 1,311 1,686 Forex items (0) (0) (42) (5) (10) (7) (39) (47) (76) - - Pretax profit 103 119 75 140 271 237 233 437 1,018 1,311 1,686 Taxation (6) 68 3 (16) (22) (28) (28) 48 (111) (197) (253) Net profit 97 187 78 123 250 209 205 485 907 1,114 1,433 EPS, HK$ 0.05 0.10 0.040.070.130.110.110.25 0.51 0.67 0.87 Recurring EPS, HK$ 0.05 0.06 0.06 0.07 0.15 0.11 0.11 0.23 0.55 0.67 0.87 EPS ex-forex, ex-SBC, HK$ 0.05 0.05 0.06 0.08 0.15 0.13 0.14 0.25 0.58 0.71 0.91 Net profit ex-forex 97 98 113 126 260 216 244 435 983 1,114 1,433 Net profit ex-forex, ex-SBC 101 102 121 144 274 231 258 469 1,041 1,178 1,500 Source: Company data, Goldman Sachs Research estimates. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 11 Appendix 2: Recent stock price performances Exhibit 11: Price performance rebased to 100, Feb 2005-July 2006 Tom Online Hurray! Kongzhong Linktone Sina Sohu Tencent 0 50 100 150 200 250 300 350 400 Fe b- 05 M ar -0 5 A pr -0 5 M ay -0 5 Ju n- 05 Ju l-0 5 A ug -0 5 S ep -0 5 O ct -0 5 N ov -0 5 D ec -0 5 Ja n- 06 Fe b- 06 M ar -0 6 A pr -0 6 M ay -0 6 Ju n- 06 Ju l-0 6 Relative price performance (rebased to 100) Tom Online Hurray! Kongzhong Linktone Sina Sohu Tencent Source: Bloomberg. Financial Advisory Disclosures The Goldman Sachs Group, Inc. and/or one of its affiliates, is acting as financial advisor to China Mobile Limited in the proposed partial acquisition of Phoenix Satellite Television Holdings Limited from Star Group Limited. The Goldman Sachs Group, Inc. and/or one of its affiliates will receive a fee for its financial advisor role. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 12 RegAC I, James Mitchell, Kit Low and Helen Zhu, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Investment profile The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and market. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites of several methodologies to determine the stocks percentile ranking within the region's coverage universe. The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows: Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate of various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as 30-day historical volatility, annualized and adjusted for dividends. Quantum Quantum is Goldman Sachs proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets. Disclosures Coverage group(s) of stocks by primary analyst(s) Compendium report: please see disclosures at . Disclosures applicable to the companies included in this compendium can be found in the latest relevant published research. Company-specific regulatory disclosures Compendium report: please see disclosures at . Disclosures applicable to the companies included in this compendium can be found in the latest relevant published research. Distribution of ratings/investment banking relationships Goldman Sachs Investment Research global coverage universe Rating Distribution Investment Banking Relationships Buy Hold Sell Buy Hold Sell Global 26% 59% 15% 58% 52% 47% As of April 1,2006, Goldman Sachs Global Investment Research had investment ratings on 2,048 equity securities. Prior to June 26,2006, Goldman Sachs utilized a relative rating system of Outperform, In-Line and Underperform, which, for the purposes of the above disclosure required by NASD/NYSE rules, equated to Buy, Hold and Sell. As of June 26,2006, Goldman Sachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure. See 'Ratings, Coverage groups and views and related definitions' below. Price target and rating history chart(s) Compendium report: please see disclosures at . Disclosures applicable to the companies included in this compendium can be found in the latest relevant published research. July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 13 Regulatory disclosures Disclosures required by United States laws and regulations See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co- managed public offerings in prior periods; directorships; market making and/or specialist role. The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts, professionals reporting to analysts and members of their households from owning securities of any company in the analyst's area of coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their households from serving as an officer, director, advisory board member or employee of any company in the analyst's area of coverage. Distribution of ratings: See the distribution of ratings disclosure above. Price chart: See the price chart, with changes of ratings and price targets in prior periods, above, or, if electronic format or if with respect to multiple companies which are the subject of this report, on the Goldman Sachs website at . Additional disclosures required under the laws and regulations of jurisdictions other than the United States The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and regulations. Australia: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. Canada: Goldman Sachs Canada Inc. has approved of, and agreed to take responsibility for, this research in Canada if and to the extent it relates to equity securities of Canadian issuers. Analysts may conduct site visits but are prohibited from accepting payment or reimbursement by the company of travel expenses for such visits. Hong Kong: Further information on the securities of covered companies referred to in this research may be obtained on request from Goldman Sachs (Asia) L.L.C. Japan: See company-specific disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the Japanese Securities Finance Company. Korea: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. Singapore: Further information on the covered companies referred to in this research may be obtained from Goldman Sachs (Singapore) Pte. (Company Number: 198602165W). United Kingdom: Persons who would be categorized as private customers in the United Kingdom, as such term is defined in the rules of the Financial Services Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available from Goldman Sachs International on request. European Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive 2003/126/EC is available at Ratings, coverage groups and views and related definitions Buy, Neutral, Sell -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy or Sell on an Investment List is determined by a stock's return potential relative to its coverage group as described below. Any stock not assigned as a Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to a global guideline of 25-35% of stocks as Buy and 10-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular coverage group may vary as determined by the regional Investment Review Committee. Return potential represents the price differential between the current share price and the price target expected during the time horizon associated with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership. Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at . The analyst assigns one of the following coverage views which represents the analyst's investment outlook on the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation. Not Rated (NR). The investment rating and target price, if any, have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman Sachs Research has suspended the investment rating and price target, if any, for this stock, because there is not a sufficient fundamental basis for determining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded. Ratings, coverage views and related definitions prior to June 26,2006 Our rating system requires that analysts rank order the stocks in their coverage groups and assign one of three investment ratings (see definitions below) within a ratings distribution guideline of no more than 25% of the stocks should be rated Outperform and no fewer than 10% rated Underperform. The analyst assigns one of three coverage views (see definitions below), which represents the analyst's investment outlook on the coverage group relative to the group's historical fundamentals and valuation. Each coverage group, listing all stocks covered in that group, is available by primary analyst, stock and coverage group at . Definitions July 10,2006 Asia Pacific: Technology: Internet Goldman Sachs Global Investment Research 14 Outperform (OP). We expect this stock to outperform the median total return for the analyst's coverage universe over the next 12 months. In-Line (IL). We expect this stock to perform in line with the median total return for the analyst's coverage universe over the next 12 months. Underperform (U). We expect this stock to underperform the median total return for the analyst's coverage universe over the next 12 months. Coverage views: Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation. Current Investment List (CIL). We expect stocks on this list to provide an absolute total return of approximately 15%-20% over the next 12 months. We only assign this designation to stocks rated Outperform. We require a 12-month price target for stocks with this designation. Each stock on the CIL will automatically come off the list after 90 days unless renewed by the covering analyst and the relevant Regional Investment Review Committee. Global product; distributing entities The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs, and pursuant to certain contractual arrangements, on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated in Australia by Goldman Sachs JBWere Pty Ltd (ABN 21006797897) on behalf of Goldman Sachs; in Canada by Goldman Sachs Canada Inc. regarding Canadian equities and by Goldman Sachs & Co. (all other research); in Germany by Goldman Sachs & Co. oHG; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in Japan by Goldman Sachs (Japan) Ltd; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs JBWere (NZ) Limited on behalf of Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman, Sachs & Co. Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and European Union. European Union: Goldman Sachs International, authorised and regulated by the Financial Services Authority, has approved this research in connection with its distribution in the European Union and United Kingdom; Goldman, Sachs & Co. oHG, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht, may also be distributing research in Germany. General disclosures in addition to specific disclosures required by certain jurisdictions This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than some industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment. Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research Division. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research. We and our affiliates, officers, directors, and employees, excluding equity analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of the investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Current options disclosure documents are available from Goldman Sachs sales representatives or at or from Research Compliance, One New York Plaza, New York, NY 10004. Copyright 2006 The Goldman Sachs Group, Inc. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs Group, Inc.

推荐给朋友: 收藏    |      
尊敬的用户您好!
         为了让您更全面、更快捷、更深度的使用本服务,请您"立即下载" 安装《慧博智能策略终端
         使用终端不仅可以免费查阅各大机构的研究报告,第一手的投资资讯,还提供大量研报加工数据,盈利预测数据,历史财务数据,宏观经济数据,以及宏观及行业研究思路,公司研究方法,可多角度观测市场,用更多维度的视点辅助投资者作出投资决策。
         目前本终端广泛应用于券商,公募基金,私募基金,保险,银行理财,信托,QFII,上市公司战略部,资产管理公司,投资咨询公司,VC/PE等。
慧博投资分析手机版 手机扫码轻松下载