Winners and Losers of China's Gaming Industry

China's booming gaming industry is no longer a matter of throwing darts to land winners. There's a real divergence taking place between the leaders and the laggards, and you'll see it on display next week when three of China's five publicly traded gaming companies report earnings.

We already heard from Changyou.com (Nasdaq: CYOU  ) , posting better than expected earnings growth two weeks ago. Pioneer Shanda Games (Nasdaq: GAME  ) reports in a few weeks.

However, we have Perfect World (Nasdaq: PWRD  ) , Giant Interactive (NYSE: GA  ) , and NetEase.com (Nasdaq: NTES  ) reporting on Monday, Tuesday, and Wednesday, respectively.

If you still haven't sorted the winners from the ho-hum players, let's see what the pros will be expecting out of the three Chinese gamers next week.

Company	EPS Estimate	Last Year
Perfect World	$0.54	$0.81
Giant Interactive	$0.13	$0.12
NetEase.com	$0.63	$0.44

Source: Yahoo! Finance.

Perfect World was the niche darling when it went public three years ago, but it's been a disappointment lately. Earnings growth turned into profit declines earlier this year, and that unwelcome trend isn't likely to reverse itself come Monday. There was buzz last month over a new game -- Dragon Excalibur -- entering beta testing, but it may take more than one promising Web-based multiplayer game to get Perfect World back on track.

Giant Interactive went public when its ZT Online game was catching on, but don't let the modest bottom-line uptick that Wall Street is banking on fool you. Giant Interactive has been a laggard, even when the rest of its peers were flying high.

NetEase has been the leader for some time. A good chunk of its recent growth is the result of being tapped by Activision Blizzard (Nasdaq: ATVI  ) as its Chinese licensing partner for World of Warcraft, but NetEase is also growing just fine with its organic titles and websites.

By this point next week we'll have a clear snapshot of the industry. Like any group portrait, we can't expect everyone to be smiling and looking good at the same time.

Are the low valuations on Chinese gaming stocks attractive, or would you prefer to stay away until regulators ease up and the clear winners emerge? Chime in with your thoughts in the comments box below.