Top of the Great Era

Chapter 2988 Study Tour

In the past two years, Changyou has undoubtedly become the most watched company in the global gaming industry.

Its own stock price has been rising sharply.

  Now the rough financial report has come out. In the past year, Changyou's revenue reached US$97 billion and its net profit reached US$14 billion!

It has become the world's most valuable gaming company, with a market value of more than 820 billion US dollars!

However, this is not an encouraging statistic in the eyes of many people.

Because the price-to-earnings ratio is too low.

The net profit is US$14 billion, and the market value is only US$820 billion...which means that the price-to-earnings ratio is less than 60 times.

  You know, the net profit of competitor EA in the past year was basically difficult to exceed 1 million US dollars, but its market value exceeded 100 billion US dollars...which means the price-to-earnings ratio exceeded 100 times!

Why?

This is so unfair!

From any perspective, Changyou has greater investment potential than EA.

Zhou Buqi also communicated with Goldman Sachs specifically about this, asking why their analysts' report on Changyou's stock price seemed to be worse than EA's... The explanation they got was quite reasonable.

There are three main points.

First, Changyou’s stock price and market value are too high.

Many retail investors and institutions are very cautious when investing because the gap between Changyou and its competitors is so huge that it has left competitors like Blizzard and EA far behind. This leading advantage is so great that it is incomprehensible.

We are all in the game business, so even if there are differences in quality, at least we should be companies of the same level.

This is the basic logic.

  But the reality is that if Microsoft is not counted as a gaming company, the combined market value of the top ten gaming companies in the United States is less than half of Changyou’s!

This is a bit unrealistic!

Therefore, investors will be very cautious when buying Changyou's stocks.

In addition, Blizzard successfully redeemed itself from Vivendi and was highly anticipated by the market; EA carried out comprehensive reforms and business adjustments after replacing its CEO, and its performance has improved significantly, which is considered by many institutions as an opportunity to buy at the bottom.

Therefore, institutions will be more interested in Blizzard and EA stocks, while Changyou will be slightly neglected.

Second, Changyou’s business structure is relatively complex.

There are both 3A masterpieces and stand-alone casual puzzle games, both computer-based online games and mobile games, and they even host world-class game competitions... The more complex the business structure, the more difficult it is to understand.

However, under the complex business structure, one data will show a significant decline - profit margin.

Changyou’s current profit margin is less than 15%.

But two years ago, Changyou, whose business was relatively clear, had a profit margin of more than 30%!

Total revenue has increased significantly and net profit has greatly improved, but the profit margin has dropped significantly, which will cause market concerns.

The third point is also the most important point.

Changyou is not an American company.

In recent years, with the general trend of loosening policies and capital recovery, a large number of domestic companies have come to the United States to list, creating one wealth-making myth after another. However, in this process, one fraud scandal after another has emerged.

Last year, New Oriental was shorted by Muddy Waters, causing its stock price to plummet.

It turns out the short report was wrong.

A false alarm.

However, other Chinese companies listed in the US that were shorted by US capital were not so lucky. They did not have the confidence in operating with integrity and strong industry connections that Yu Minhong had, and many of them suffered devastating consequences.

This will affect innocent people as well.

The entire concept of Chinese stocks listed in the US has been questioned, and the price-to-earnings ratio has declined.

Plus the domestic stock market is booming.

Welcoming the bull market.

  The gaming industry was the first to step forward. Now, more than a dozen domestic gaming companies listed in the United States have chosen to delist in the United States, and then enter the domestic capital market through mergers and acquisitions and reorganizations, and choose to return to China for listing. These gaming companies are not understood and trusted in the United States, and are given a biased low price-to-earnings ratio, but when they return to China and come to the A-share market... Hehe, these gaming companies are all star assets and high-quality enterprises!

Will Changyou also change its strategy under this general trend?

This will make American capital very worried.

In fact, Changyou's opening board meeting this year was mainly to discuss this matter, and even Zhang rushed over from China to study this matter. It is definitely not a good idea to follow the example of other domestic game companies, delisting from the US and then returning to the A-share market through a backdoor listing.

With Changyou's size, A-shares simply cannot afford it.

Zhang Chaoyang and Zhou Buqi haven't seen each other for half a year and don't seem to care much about this matter.

After meeting at Changyou's headquarters the next day, he was very happy and asked, "Do you know what I'm doing recently?"

Zhou Buqi glanced at him and was a little surprised. "What's wrong? Which beautiful girl did you meet again?"

"It has nothing to do with the girl!"

Old Zhang waved his hand.

But that expression really was like the excitement and sense of accomplishment of having a new love.

Zhou Buqi asked: "What's that? Sohu's stock price has soared? Sohu's stock price has soared, isn't it because of Changyou?"

Zhang Chaoyang said with a grin, "I have accepted your suggestion and have already implemented it."

"What advice?"

"Physics class."

"Ah?" Zhou Buqi's eyes lit up. "You've taken action? When? Why haven't I heard about it? This is such a big deal, you have to market it! You're such a big boss, and you're personally giving a physics class, what a great hype concept this is!"

Zhang Chaoyang said: "I tested it and found that the online live broadcast model doesn't work. The live broadcast industry is still immature. I went to Tsinghua University to set up a classroom, taught a few classes, and recorded them. They haven't been released yet!"

"Recorded broadcast..." Zhou Buqi nodded. "Recorded broadcast is inevitably less attractive than live broadcast, but it's also good. If it's well managed, it can become a great Internet concept and greatly enhance the appeal of Sohu's brand and stock."

"Those are secondary. The key is..." Lao Zhang pointed to his chest, "The key is that I am happy! Really, happy! Happier than how much money I make!"

Zhou Buqi smiled and said, "Are you fighting for your ideal?"

Zhang Chaoyang nodded. "I went to Tsinghua University to attend a few classes and talked to a few physics professors... It's true. There really is a spark that bursts out from the bottom of my heart. Taking classes is more career-oriented than managing a company."

"Boss Ma also said so. He said that he would definitely return to school to be a teacher after retirement." Zhou Buqi immediately thought of something. "By the way, when you teach at Tsinghua University, do you use English or Chinese?"

Tsinghua University and Peking University are both international-level universities. Not only do they have many foreign students and foreign teachers, but all majors are of the highest standards and are in line with international standards.

In all world-class universities around the world, the mainstream language of instruction is not the native language of the country, but English.

Not only Tsinghua University and Peking University in China, but also Seoul University in South Korea, University of Tokyo in Japan, University of Berlin in Germany, etc., all use English as the medium of instruction.

At the academic forefront, English is the first language.

In other words, it is impossible to be at the forefront of the world academically without knowing English.

Half of the courses in Tsinghua University are taught in English, which is considered low internationally.

Physics itself is a concept from the West, so it is normal to teach in English.

Zhang Chaoyang said: "It's half and half. I'm not teaching senior college students or graduate students, but also some freshmen. I will post it in the form of a video to share with netizens. Using English alone may cause misunderstanding."

Zhou Buqi said, "Why do you have to take classes at Tsinghua? You can visit all the major universities around the world, and study in all the Ivy League schools in the United States first. Just like Confucius in the past, traveling around the world to study and having 72 disciples, how impressive is that? When the time comes, foreign universities may award you an honorary doctorate or something like that because of your high level, just like Hu Shi in the past. How fulfilling would that be?"

"Hmm?" Zhang Chaoyang looked suspicious. "Why do I feel that your tone is not right... Is there something wrong with you?"

Zhou Buqi smiled and said, "It's like this. Ziweixing International is planning to enter the field of online education. If you mainly teach in English, I can open a special column for you called "A Billionaire Gives You a Physics Lesson" and I can also help you promote it."

Zhang Chaoyang said angrily: "You want me to work for you again? Turning my hobby into a tool for you to make money?!"