Growing rapidly. Chinese Internet stocks have things going for them that domestic dot-coms don't, Qiu says. First of all, the Chinese economy grew 8.2% in the first half of 2003, well above the growth of the USA's, Qiu says. And only 5% of China's population of 1.3 billion uses the Internet, which means there's enormous potential for growth as more Chinese users come online, he says.

As a result, the portals can't raise expectations fast enough. Last month, Sina said it would post second-quarter revenue of as much as $25 million, a 23% increase from previous forecasts. In contrast, Yahoo this month raised its 2003 revenue guidance by only 3%.

* Undervalued. Sina has a P-E of 52 based on expected 2003 earnings, and Sohu.com's is 52. Those valuations are low relative to Yahoo's P-E of 85 and eBay's 75, especially because the Chinese portals are expected to grow just as fast, Price says.

And that's why investors such as Eric Ritter, portfolio manager of the Driehaus Asia Pacific Growth fund, are hanging on to most of their shares, despite the run-up. ''We sell when valuations grow too high,'' he says. ''That hasn't happened.''

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Source:  USA Today.com

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