Goldman Sachs Comments On Giant Interactive's 1Q11 Preview

According to Goldman Sachs, Giant Interactive Group GA will report 1Q11 results on May 12 after market close. Goldman Sachs said that it forecasts revenue growth of 7% qoq and 29% yoy, 3% above Bloomberg consensus, driven by ZT II (launched in 4Q10). “We forecast non-GAAP EPS to decline 8% qoq but grow 17% yoy, in line with consensus. We forecast the EBIT margin ex-government subsidy to recover in 1Q11, up 15 ppt qoq to 51%, as GA recorded a one-time impairment charge of Rmb47mn (13% of revenue) in 4Q10. We model a Rmb8mn subsidy in 1Q11, similar to the 1Q10 level.” Giant Interactive Group closed yesterday at $8.87.