Trading the Globe: Chinese Internet stocks

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The entire Chinese Web space has had a big run, which brings it to our attention on this week's installment of Trading the Globe. You can seek out value here but remember, these stocks are all about growth -- and they are delivering it. Facebook's entrance tells you how important social networking will be in China, not to mention how important China will be to social networking. It may end up a very different form of social networking, but how high and mighty will Facebook be after we have all seen what Beijing can put Google ( GOOG , quote ) through? A few notes on the big players: BIDU ( quote ) is not cheap, trading at 63 times 2011 estimated earnings, but continues to broaden out. This stock is running at a ROE rate above 50% and has been a 12-bagger since hitting its post-recession lows two years ago. Operationally, its new licensed music service "Baidu Ting" will keep copyright issues at bay and its new online advertising system creates an interesting open platform. Online games offer the best valuation opportunities and ROEs of 25% to 30%. Perfect World ( PWRD , quote ) is trading at 9 times 2011 earnings, Giant Interactive ( GA , quote ) at 12.4 times, Shanda ( SNDA , quote ) at 25 times and Shanda Game ( GAME , quote ) at 9.8 times 2011 earnings. JOBS ( quote ) has 1.8 billion people to recruit into human resource departments in both online and print formats. Operating margins are great at 27% and there are already 45 million registered users -- and 36 million resumes -- in the system. SINA ( quote ) is up 73% year to date even though it is trading at 135 times earnings. Buy this one on weakness related to the Facebook news.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Stocks

Referenced Stocks: BIDU , SINA

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