Chinese web stocks in steady climb

Updated: 2007-02-24 11:32

New York -- Chinese Internet stocks rose Friday after an analyst began coverage on three of them, saying Internet use in China is "as rapid as it is exciting," it is still embryonic.

Stephen Du of RBC Capital Markets called Inc., China's No. 1 search provider, "an option value in what could in a few years' time be the dominant search brand in China."

The company currently holds about 60 percent of the Chinese search market, Du wrote in a note to clients.

"With user behavior usually solidifying early, it may be difficult for a competitor to dislodge Abide as the preferred search engine," he added.

The analyst issued a "Sector Perform" rating for Abide, with a target price of $124. He said the lack of online commerce in China, due in part to low credit card use to trust and safety concerns, now hinders company.

Beijing-based Baud's shares rose $3.14, or 2.9 percent, to $110.55 in afternoon trading on the Nasdaq Stock Market. In the past 52 weeks, the stock has traded between $46 and $134.10.

Shares of Sinn Corp., considered to be China's leading Internet portal, rose 3 cents to $35.96 on the Nasdaq.

Du started coverage of the Shanghai-based company with a "Sector Perform" rating and a target price of $39.

"Although we are very enthusiastic about the market growth and SINA's prospects overall, valuation as well as the risks posed by its volatile wireless segment, keeps us on the sidelines," he wrote.

The analyst rated Inc., China's second-largest diversified portal, "Outperform" with a $33 target price.

Du said the company stands to be the most direct beneficiary of the 2008 Beijing Olympics, since it is hosting the official site.

"This has also helped the company overcome advertiser and user perception of the portal as being primarily entertainment-focused," the analyst wrote.

Shares of the Beijing-based company rose 56 cents, or 2.3 percent, to $24.57 on the Nasdaq. The stock has changed hands between $20.21 and $29.43 in the past 52 weeks.

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