CYOU: Mobile Games to Drive 2Q15 Results; Maintain Hold
CYOU will report 2Q15 results on Monday, July 27th before the market open with a 7am EST conference call. We believe the quarter may be in line with consensus driven largely by strong growth of the company’s mobile games, while its MMO segment is stable with flat server growth coupled with slight ACU decline. Over the last few quarters, CYOU has been dedicating a lot of resources and focus on this area. However, to maintain leadership in mobile games, CYOU needs more than one or two hit games; it needs solid R&D capability. As such, we maintain our Hold rating as CYOU still needs to demonstrate such capability for its sustainable long term growth.