A Promising 'Net Bet in China by Neil A. Martin
- Highlighted companies: Sohu.com (SOHU), Sina (SINA), Baidu (BIDU), NetEase (NTES)
- Summary: Ryan Jacob, manager of the Jacob Internet Fund, has about 20% of his fund in Chinese internet companies and sees continued upside in the group, fueled by high cellphone usage. Both Sohu and Sina have fallen hard since the Spring, and now trade at about 20x 2007's estimated earnings. Baidu, the 'Google of China,' is more richly valued at 45x next year's earnings, but its huge market share and massive growth 'give the company lots of earnings leverage,' according to Jacob.
- Quick comment: IRG has the latest figures and trends from the Chinese internet sector. Shaun Rein investigates China's new obsession with blogs and how companies can benefit. Last quarter's earnings conference call transcripts from Sohu, Baidu, Sina and NetEase.