When your name is Giant Interactive
Giant is living up to the billing. Last night the company posted a first-quarter profit of $0.20 per American depositary share, with revenue soaring 49%, to $67.3 million. Wall Street's sleepy analysts were looking for earnings of only $0.16 a share on $63.1 million.
ZT Online continues to be a cyberspace smash, with as many as 1.5 million gamers playing at the same time. Giant rolled out an expansion pack during the quarter, introducing a social-networking element into the fantasy fighting game where gamers play alongside other gamers who live nearby in the real world.
ZT won't have to fight alone, since Giant Online -- the company's second internally developed multiplayer game -- rolled out to the public in open beta at the end of March.
The pipeline will keep cranking out product through the end of the year, including a new ZT Online expansion pack as well as overseas developed titles King of Kings III and Empire of Sports.
Giant's solid numbers set a welcome tone for the wave of upcoming reports. Perfect World
Remember when China was cracking down on Internet cafes last year and limiting the amount of time that minors could spend in multiplayer fantasy games?
Few seem to be doubting China's leading multiplayer-game makers these days. Since bottoming out two months ago, Giant's shares have soared nearly 80%. Those kinds of gains make it hard for a stock to live up to the hype in the near term -- and shed a light on a dip in stock price following the report -- but Giant's growing role in high-margin gaming will help in the long run.
China definitely appears to be the place for online gaming companies, as South Korea's Webzen
Giant is attracting an average of 546,000 players to its games at any given time. The company's paying user base is now at 1.5 million, and that's a committed crew who snap up prepaid game cards and in-game point purchases in order to play the games.
Giant may not be a household name outside of China, but when you're reaching the masses in the world's most populous nation, you must be doing something right.
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Longtime Fool contributor Rick Munarriz has been a fan of China's high-margin gaming stocks for a long time. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.