Chinese Internet stocks mostly rose Monday after Internet portal operator Sohu.com Inc. issued first-quarter results that beat analysts' expectations and predicted second-quarter revenue far ahead of analysts' views.
Beijing-based Sohu's shares shot up $9.31, or 15 percent, to $71.14 in afternoon trading. In the past year, the stock has traded between $22.95 and $64.83.
The company said early Monday that its first-quarter earnings more than quadrupled due to rising brand advertising and online gaming revenue. For the second quarter, it expects to soundly beat the $77.4 million in revenue anticipated by analysts polled by Thomson Financial.
In an investor note, Citi Investment Research analyst Jason Brueschke reacted enthusiastically to Sohu's report, which followed his upgrade of the stock to "Buy" last week. Brueschke said the company "once again positively surprised this quarter, ahead of already raised expectations."
Piper Jaffray analyst Gene Munster, who rates the stock "Buy," raised his price target for Sohu to $78 from $68 after its report and increased his estimates for its 2008 and 2009 revenue and per-share earnings.
Meanwhile, shares of Shanghai-based competitor Sina Corp. rose $1.36, or 2.9 percent, to $48.41 and American Depositary Shares of Beijing-based online search engine operator Baidu.com Inc. declined $4.11 to $359.58.
Elsewhere in the sector, ADS of online gaming company Giant Interactive Group Inc. climbed $1.49, or 12 percent, to $13.85.
The company reported that peak concurrent users for its game "ZT Online" climbed to about 2.1 million on Saturday, which Giant said is a record in the Chinese online gaming industry.
Giant attributed some of the strength of "ZT Online" to the growth of an in-game community called "Tian Ma Zai Xian."
Citi Investment Research analyst Alicia Yap said that the game's 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 recent usage.
Shares of NetEase rose $1.63, or 8 percent, to $21.99.
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