The strong growth of online games company NetEase.com Inc, a leading Chinese online game operator and Internet portal, pushed the stocks of the firm on the NASDAQ stock exchange by almost 7 per cent.

Beijing-based NetEase, the second largest online games operator and the most profitable Chinese company on the US stock exchange, said on Friday that its revenues in the fourth quarter rose by 75 per cent year-on-year to US$60.40 million.

Net profits amounted to US$34.30 million, more than doubling the number in the same period of 2004. Diluted earnings per share were 95 US cents, compared with 89 US cents in the previous quarter.

"It is very hard to find such a profitable company in the world," said Peter Lu, a Beijing-based Internet industry analyst.

He attributes it to NetEase's strong in-house game development capability and efficient operations.

Boosted by the results, NetEase's shares rose by almost seven per cent to US$78.00 from the previous close.

NetEase claimed it was on a similar level to the country's biggest online games operator, Shanda Interactive Entertainment, both with a 31 per cent share of the market.

Shanghai-based Shanda is expected to release its figures next week.

NetEase's revenues from online games beat its previous plans to reach US$49.70 million, 7.6 per cent higher than the third quarter and 93 per cent higher than the same period one year earlier.

Its massive multiplayer online role play game Fantasy Westward Journey and Westward Journey Online II remained the two most popular games on the market, with the former reaching a new record of over one million concurrent players.

However, Lu warned that the two games were at the ceiling of their lifecycle and the company should depend on new games, as the sequential growth rates of NetEase's online games slowed from 27 per cent in the second quarter to 5 per cent in the fourth quarter.

Ding Lei, founder and chief executive officer of the firm, said NetEase would start open beta-testing of its new game Datang in the second quarter, and its first three-dimensional game Tianxia will start open testing in the third quarter.

Danny Lee, chief financial officer of NetEase, estimated its revenue for this quarter at between US$63.3 million and US$64.7 million.

(China Daily 02/25/2006 page5)