Giant Interactive Group Inc.
) reached a 52-week high of $11.61 per share on Mar 6 after it
reported impressive fourth quarter 2013 results a day before.
Shares of Giant Interactive eventually closed at $11.54 on Mar 6,
with share prices rising 3.1% year-to-date.
On Mar 6, Giant Interactive
one of China's leading online game developers, delivered solid
fourth quarter and full-year 2013 results.
Fourth quarter 2013 adjusted earnings of 29 cents increased
23.1% year over year (on a local currency basis) and also beat
the Zacks Consensus Estimate by 26.1% on the back of top-line
growth and strong margins.
Net revenue of $99.9 million was in line with the Zacks
Consensus Estimate and increased 5.8% year over year (on a local
currency basis), driven by an increase in the demand for online
games. Gross profit also increased 8.9% year over year to $88.7
million on account of higher sales.
In full year 2013, the company's earnings of $1.03 per share
increased 10.7% (on a local currency basis) and beat the Zacks
Consensus Estimate of 93 cents by 10.8%. Net revenue grew 9.5%
(on a local currency basis) driven by double-digit annual growth
in online game revenues. Revenues also beat the Zacks Consensus
Estimate of $386 million.
In 2013, the company launched World of Xianxia, an online
game, which has successfully expanded its portfolio without
cannibalizing the sales of existing games. In addition, the
company successfully diversified into new growth areas such as
web games and mobile games.
The company is optimistic about expanding its portfolio in
2014 and hopes to launch several new mobile games. The company
has a prudent expense management system and it continues to
explore other cost effective distribution channels to enhance
Giant Interactive holds a Zacks Rank #2 (Buy). Investors
interested in Internet retailers can also consider stocks like
WebMD Health Corp.
China Distance Education Holdings Limited
). While WebMD Health and YY sport a Zacks Rank #1 (Strong Buy),
China Distance Education Holdings holds a Zacks Rank #2.
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