It's hard to bet against NetEase.com (Nasdaq: NTES) when it has its game face on.

China's leader in online multiplayer games delivered another blowout quarter last night. Net revenue climbed 32% to $268.2 million, blowing past market expectations for $246.2 million in net revenue. In fact, the $244.1 million that NetEase generated from Web-based gaming revenue -- before we consider its website portal and mobile services -- was nearly enough to cover Wall Street's target.

Earnings grew even faster, soaring 57% to $0.91 a share. Analysts figured that NetEase would come through with a profit of only $0.78 a share. NetEase has now landed well ahead of the pros in four consecutive quarters.

Strength with its proprietary titles and what this past quarter grew into two licensed juggernauts from Activision Blizzard (Nasdaq: ATVI) have made NetEase the perfect bellwether for this dynamic niche.

It's not just NetEase that's humbling the prognosticators. All three of the Chinese gaming specialists that have posted their second-quarter results have blown through market estimates.

Copmany

EPS

EPS Est.
NetEase.com $0.91 $0.78
Changyou.com (Nasdaq: CYOU) $1.02 $0.93
Giant Interactive (NYSE: GA) $0.18 $0.15

 Source: Yahoo! Finance.

Perfect World (Nasdaq: PWRD) and Shanda Games (Nasdaq: GAME) will report on Monday and Tuesday of next week, respectively.

Target-busting growth apparently hasn't been enough to give these five stocks well-earned market premiums. The five stocks trade between six and 13 times next year's projected profitability.

There will always be the fear that China's restrictive government will shut down this primarily youthful diversion, but that risk appears to be priced into these insanely cheap valuations.

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