UPDATE: Morgan Stanley Lowers PT to $15 on Perfect World Following In-Line Earnings

Morgan Stanley reduced its price target on Perfect World

from $16.70 to $15 on near term weakness and maintained its Overweight rating on shares. Morgan Stanley commented, "Share offers deep value, at just 4x 2012e P/E and a 5-6% recurring dividend yield, while its net cash accounts for 65-70% of its market value. Despite near-term weakness, it boasts a rich pipeline with potential “hits”, such as Return of Condor Heroes, Swordsman Online and Saint Seiya. … Total sales of Rmb676mn dropped 6% QoQ and 13% YoY, 2% above its mid-point guidance. Diluted EPADS was Rmb3.25 (-26% QoQ and -46% YoY), in-line with our estimate of Rmb3.27." Perfect World closed at $10.52 on Monday.