Morningstar

CMGE Technology Group Ltd 00302

Morningstar Rating
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Stock XHKG Rating as of
HK$1.08 +0.17 (18.68%)
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As of Delayed Price Closed

Company Report

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CMGE Earnings: Navigating Challenges With an Eye on the Upcoming Launch of Sword and Fairy: World

Ivan Su

CMGE Technology's first-half results fell short of our expectations, primarily due to declining revenue from legacy mobile games and delays in new-game launches. While we have factored in a revenue drop from the older titles, the decline occurred earlier than expected. However, given most of our long-term revenue forecasts hinge on the scheduled late 2024 release of Sword and Fairy: World, we keep our estimates unchanged for now. As a result, we maintain our fair value estimate for CMGE at HKD 2.40 but lift the firm's Morningstar Uncertainty Rating to Very High from High due to increasing competition in the gaming industry.

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Price vs Fair Value

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00302 is trading at a 599% premium.
Price
HK$1.08
Fair Value
HK$1.30
Uncertainty
Very High
1-Star Price
HK$5.60
5-Star Price
HK$3.90
Economic Moat
Xcxhq
Capital Allocation
Pcnctprdy

Bulls Say, Bears Say

Bulls

CMGE was one of the first game companies to announce a metaverse project based on its legacy Sword and Fairy franchise.

Bears

The lack of a strong game development track record remains an overhang on the durability of CMGE’s current business model.

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Trading Information

Previous Close Price
HK$0.91
Day Range
HK$0.90–1.10
52-Week Range
HK$0.63–1.63
Bid/Ask
HK$1.08 / HK$1.09
Market Cap
HK$3.08 Bil
Volume/Avg
44.0 Mil / 17.2 Mil

Key Statistics

Price/Earnings (Normalized)
60.93
Price/Sales
1.19
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
—

Company Profile

CMGE is an IP-based mobile game developer and publisher in China with 55 licensed IPs and 68 proprietary IPs as of the end of 2021. The company has over 80 games on the shelf and over 20 games with lifecycles of over three years. Average monthly active users, or MAUs, of CMGE games reached 19.1 million in 2021. The market share of CMGE for online gaming grossing income in 2021 was around 1%.
Sector
Communication Services
Industry
Electronic Gaming & Multimedia
Stock Style Box
Small Value
Total Number of Employees
837
Website
https://www.cmge.com

Competitors

Valuation

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Metric
00302
00700
NTES
Price/Earnings (Normalized)
 60.9321.1314.41
Price/Book Value
 0.504.763.63
Price/Sales
 1.196.644.44
Price/Cash Flow
 12.2717.9413.59
Price/Earnings
00302
00700
NTES

Financial Strength

Metric
00302
00700
NTES
Quick Ratio
 1.221.172.81
Current Ratio
 1.671.353.01
Interest Coverage
 −12.4316.38—
Quick Ratio
00302
00700
NTES

Profitability

Metric
00302
00700
NTES
Return on Assets (Normalized)
 −3.98%12.28%17.90%
Return on Equity (Normalized)
 −4.93%23.79%26.23%
Return on Invested Capital (Normalized)
 −4.27%15.34%19.53%
Return on Assets
00302
00700
NTES

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