A Few Reasons NetEase, Inc (ADR) (NTES) Should Have a Great Year Ahead

Apart from the above, it plans to release titles such as Heroes of Three Kingdoms, a real-time 3D action strategy game, Dragon Sword and Legend of Tibet in the second half of 2013. These efforts signal a concerted effort by NetEase to diversify its revenue sources and help it get better in the future.

Speaking of diversification, the company’s advertising business has also been on the rise of late. Advertising revenue grew almost 7% in the previous quarter on a sequential basis. Although this segment contributes just 11% to NetEase’s revenue, the company plans to make it better by offering better services and focusing on mobile initiatives.

The takeaway

NetEase is looking to get better through the course of 2013, and it won’t be surprising if the stock continues to get better as the year progresses. What’s more, potential investors don’t need to pay a fortune if they intend to buy into this Chinese online gaming play. A trailing P/E multiple of just 11.5 times and a PEG ratio of less than 1 suggest that the stock is inexpensive and there’s growth lying ahead. Moreover, a forward P/E of just 9.3 times is another reason why you should take a look at NetEase.

The company’s focus on making its self-developed games successful and the presence of a solid, money-generating franchise such as WoW is a potent combination that should help NetEase perform better as the year progresses. What do you think?

The article A Few Reasons This Stock Should Have a Great Year Ahead originally appeared on Fool.com and is written by Harsh Chauhan.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.