Sohu.com (Nasdaq: SOHU) may be coming out of its shell.

The Chinese new media specialist posted a 12% increase in first-quarter revenue to $129.5 million this morning. Non-GAAP profitability clocked in at $0.86 a share, lower than the $1.15 a share it earned a year ago, but that was before it spun off a minority stake in its Changyou.com (Nasdaq: CYOU) online gaming division. On an apples-to-apples basis, adjusted net income actually rose 3%.

Analysts aimed too low, targeting a non-GAAP profit of $0.72 a share on $128.2 million in revenue. The midpoints in Sohu's guidance for the current quarter are also ahead of Wall Street's second-quarter estimates.

This doesn't mean that Sohu is thriving on all fronts. Brand advertising and its fledgling wireless initiatives generated flat revenue growth during the period, with a 17% increase in online gaming carrying the team. Margins also slipped in Sohu's core brand advertising business.

Don't read any industry weakness in Sohu's dot-com funk. Baidu (Nasdaq: BIDU) should come through with stunning growth when it reports in two days, primarily because it specializes in paid search -- not Sohu's graphics.

Display advertising may be making a comeback closer to home, with Yahoo! (Nasdaq: YHOO) serving up a 20% year-over-year rise in that for its latest quarter, but it's apparently still meandering about in China.

The sweet upside for Sohu during this lull is that it may be trading in growth investors for value seekers at this point. Sohu closed out the quarter with $599.2 million in cash -- or roughly $15.60 a share, based on its 38.4 million diluted shares outstanding. Its 74% stake in Changyou is worth nearly $1.4 billion. In other words, Sohu is trading for just a smidgeon above the value of its cash and Changyou.com stake.

Sohu isn't the market darling it used to be. It's one of the few stocks trading closer to its 52-week low than its 52-week high in this buoyant market. However, it's hard to ignore an asset-backed stock trading at an earnings multiple in the teens.

It's becoming the craftier way to play Changyou and a less risky way to wager on China's recovery.

Given the political tension between China and the United States, is it still a good idea to invest in Chinese stocks? Share your thoughts in the comments box below.

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Longtime Fool contributor Rick Munarriz has been a fan of China's high-margin online stocks for a long time. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.