In a previous post last December, I had a quick look at the valuations of a few Chinese internet stocks that are traded in the US, solely for curiosity’s sake. At that time, I mused that Google (GOOG) may be a better bet than any of the Chinese high growth/high risk plays given its valuation. The one maybe I highlighted amongst the Chinese internet stocks was Baidu (BIDU), the so called Chinese Google. It is somewhat ironic that BIDU today fell 15% after disappointing results from higher expenses and lower revenue projections whilst GOOG, which had a great quarter due to revenue growth and squeezed expenses, is up over 20% since its Q2 results. Just shows what I know!
Given the drama in the Chinese stock market, I had another quick look over the Chinese internet stocks to see how they are performing, as per the graph below.
click to enlarge
It is far too early to tell what the impact of the current turmoil will have on the Chinese consumer and on the Chinese internet sector (if any, given the government’s current policy of propping up the market). At this stage, it is interesting to see that it’s NetEase, primarily in the online game services sector, which has stood up the best so far, up 40% this year. That just confirms to me how far these stocks are outside my comfort zone.
This blog represents my personal views and is not reflective of the views or opinions held by any company or employer I work for currently or have worked for in the past. The views expressed herein are based solely upon publicly available data. No views expressed herein should be taken as an endorsement to take any particular course of action in the markets. The basis of this blog is that different views should be expressed and readers make up their own minds on the what they believe and act accordingly.
deconstructingrisk 
It looks like China blinked last night…
Eddie
Wow, that was sooner than I thought, looks like the currency war just went up a level….
M