Source: Penny Stock Detectives Online Game Penny Stock Increases Revenue 21% from Last Year There are many different avenues to look at when one is searching for technology stocks to invest in. One of the most basic differences is hardware technology stocks versus software technology stocks. Obviously, some companies offer a combination of both, but for some of the smaller technology stocks, it can be advantageous to be solely on the software side of the business. This is because, as adoption by consumers grows, corporate earnings are easier to scale up. One market that is extremely attractive, yet investors are hesitant to be active in these days, is that of Chinese technology stocks. American investors are hesitant to look at Chinese technology stocks because of questionable accounting practices. Unfortunately, there have been some unethical firms that have put the whole sector in question. No matter how one might categorize companies in China, no one questions the massive potential growth for corporate earnings in that nation. Giant Interactive Group Inc. (NYSE/GA) is one of the more interesting technology stocks, because it is one of the leading developers for online games in China. The company specializes in multiplayer online games to drive corporate earnings. The company reported second-quarter earnings, which ended June 30, 2012, with net revenue at $83.1 million, up 21.1% from the same period last year. Attributable net income available to shareholders was $48.4 million for the quarter, up 2,920% from the same period last year. Key metrics when looking for corporate earnings growth in technology stocks that are based off online players are metrics related to the actual game play. For the quarter, active paying accounts were up over 11% from the previous year, and average revenue per user was up 9.7% from last year. These are great increases, as they show underlying strength in the actual games themselves. If players don’t like the products offered, they would certainly play less. That’s not what the company’s results show; in fact, it’s just the opposite.
Chart courtesy of www.StockCharts.com The company’s shares broke a mini-downtrend in August, as can be seen by the downward sloping line. With technology stocks being a highly competitive market sector, the key to corporate earnings growth is developing a product in which customers continually want more of the product, and are willing to spend money on it. It appears from the results we’ve seen so far that the company is able to maintain its edge against competing technology stocks, as the number of paid accounts has increased substantially. The only question might be the long-term viability of technology stocks that develop such products as online games. The reason being is that competition is intense, which means corporate earnings growth can be affected through new product offerings by other technology stocks and price competition. Only time will tell. However, no one questions the appetite for online games in China.
Source: Penny Stock Detectives