ADRs in Focus: Perfect World Rises

U.S.-traded shares of Perfect World Co. rose on Tuesday and helped send an index of ADRs higher, as the Chinese online game developer signed a licensing agreement with a Malaysian online game operator.

The Bank of New York China ADR Index gained 1.98 points to 447.79, while the broader Bank of New York Asia ADR Index rose 0.74 points to 159.58. American Depositary Receipts, or ADRs, are securities designed to allow U.S. investors to trade shares of companies based overseas.

Shares of Perfect World advanced 28 cents to $25.95, following news that Perfect World and Cubinet Interactive Pte. Ltd. will license Perfect World's game "Chi Bi" in Vietnam, Thailand, Malaysia and Singapore.

"Given that 'Chi Bi' has been well-received in China's online game market and that Cubinet has extensive experience in operating games in South East Asia, I believe this agreement will be another success," Chairman and Chief Executive Michael Chi said in a statement.

Citi Investment Research analyst Alicia Yap said the agreement bodes well for Perfect World's third-quarter overseas license revenue.

Yap rates the stock "Buy" and has a $35 price target, which implies upside of 36.4 percent to Monday's close of $25.67.

Last week, Perfect World raised its second-quarter sales outlook because of stronger-than-expected results from new expansion packs and marketing campaigns.