CMGE Technology Group Ltd

00302: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$7.40	Gndw	Ddsltwkz

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

Ivan Su

Aug 29, 2024

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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