Gaming is traditionally a favorite way to get exposure to the
Chinese consumer economy. This is a good time to revisit a few of
the big names. Traders had already baked in extremely good earnings
for Macao casino operator Melco Crown Enterprises (
) by the time that company reported its fourth quarter numbers last
week. Now that the post-earnings depression has kicked in, it is
worth taking a look. Revenue doubled and EBITDA was up something
like 4,800% in the fourth quarter. And analysts have been behind
the curve, so keep watching for upgrades - especially now that the
stock is 5% cheaper than it was a month ago. For a perhaps less
sophisticated Chinese gaming experience, Netease (
) is focusing its online game development efforts squarely at the
Chinese market. In addition to gaming, Netease has an
advertising component which pushed over a 25% gain for the quarter.
The online advertising segment is competing on some levels
with search portals
. The company is exposed to massive growth opportunities -- and
gross margins were a whopping 71% last year -- but the stock is
still only trading at 15 times 2011 expected earnings. It is
up a solid 7% over the last month and has interesting potential.
The company launched Wrath of the Lich King in August, an expansion
pack for the Activision. NetEase's fourth-quarter online game
revenue jumped 31 percent from the last year.