Giant Interactive jumps as game metric hits new high
NEW YORK—Giant Interactive Group Inc. shares jumped Monday after the Chinese online gaming company reported peak concurrent users for its game "ZT Online" hit about 2.1 million on Saturday, which Giant said is a record in the Chinese online gaming industry.
Giant's American Depositary Shares rose $1.60, or 12.9 percent, to $13.96. The stock has ranged from $9.06 to $20.46 over the past year.
The company attributed some of the game's strength to the growth of the in-game community "Tian Ma Zai Xian," which Giant said recently supported 43,297 peak concurrent users. "ZT Online" has been commercially available for more than two years.
In a client note, Citi Investment Research analyst Alicia Yap noted that the peak tops a high of 1.67 million concurrent users achieved by competitor NetEase.com Inc.'s "Fantasy Westward Journey" game on April 6.
Yap thinks intense marketing promotion and new in-game activities related to the game's second anniversary helped usage. She expects usage to trend back down in the coming weeks but said the peak still shows "continued momentum and user interest even after the game has been in operation for two years.
"Besides, it also proves that the company's marketing technique/strategy is capable of reaching a mass market that is difficult to be replicated by its peers," she added.
Yap, who rates Giant Interactive "Buy" with a $14 price target, expects Giant to top its first-quarter revenue guidance and consensus estimates. She expects the company to report its results in early May.
Analysts polled by Thomson Financial expect Giant to report a profit of 16 cents per share on $63.1 million in revenue. Analyst estimates typically exclude special items.
