CRI听力:China's NetEase Joins Nasdaq 100, Replacing SanDisk

After joining the Nasdaq 100 early on this Wednesday, NetEase closed over 3 percent higher at around 150 dollars per share.

Analysts are now projecting the stock's full-year average price target will surpass 180 dollars.

The inclusion of NetEase in the Nasdaq 100 comes at a time of extreme volatility. The stock is down almost a quarter so far this year and up 37 percent compared with last year.

Even so, George Tkaczuk, senior portfolio manager with RCM Wealth Advisers says, based on the company's good performances in the past few quarters, investors generally like it.

"The reason we like it is, we saw some really good exhilaration in earnings and revenue over the last few quarters. Basically its earnings have increased from 9 percent, to 20 percent, to 24 percent."

Also the company's revenues rose 128 percent annually in the fourth quarter of last year. Its profit margin and operating margin have remained above 25 percent.
Tkaczuk also says NetEase has a strong perspective due to the booming growth of the whole sector.

"Basically, it is China's online gaming trying to switch from the PC gaming market to the mobile market. Though some are talking about the profit margin of the mobile market may not be as high, but they still do pretty well. The online gaming is supposed to grow for about 27 percent between 2015 and 2018. So we foresee some good growth rates."

Market observers say the sustainable profitability and high revenue growth of NetEase have brought some confidence to the market which is overshadowed by a "sell anything China related" mentality.

Chinese tech companies at Nasdaq have had a tough time in recent months. Alibaba has struggled to bounce from its 52-week low, with Baidu, Sohu, and Sina being met with investor suspicion.

The general picture has not stopped hedge funds and investment companies from buying Netease. BlackRock recently bought 10 percent more NetEase stock at the end of last year, raising its total stake to over 8.1 million dollars.

The Nasdaq-100 Index includes the largest US and international non-financial companies listed on The Nasdaq Stock Market.

Established in 1997, the Beijing-based NetEase has a market capitalization of some 10.5 billion dollars.

The company operates an interactive online community, including online gaming, advertising and other online services like email and E-commerce.

For CRI, I'm Su Yi in New York.