NetEase.com (NASDAQ:NTES) keeps playing around, and investors have to like it.

China's new media darling keeps expanding its mastery of online games. The company closed out its first quarter with $114.4 million in revenue, 20% ahead of last year's showing. Earnings grew even faster, soaring 55% to $0.47 a share.

The real surprise here is that NetEase did so well, despite a steep decline in online advertising. Unlike search engine giant Baidu (NASDAQ:BIDU), with its market leadership in the still-potent paid search realm, many of the online brand-advertising specialists struggled during the first three months of the year. Sponsors pulled back along with the economy, though both have showing signs of life since March.

Web-based advertising isn't a big deal at NetEase these days, with online games accounting for a whopping 93% of the revenue mix. In China, online gaming's a good place to be, since most of the niche's publicly-traded players have been growing nicely.

They also happen to be ridiculously cheap.

Company

2009 Expected EPS

Forward P/E

NetEase

$2.03

14

Shanda Interactive (NASDAQ:SNDA)

$3.19

17

The9 (NASDAQ:NCTY)

$0.88

11

Perfect World (NASDAQ:PWRD)

$2.22

9

Giant Interactive (NYSE:GA)

$0.61

13

Changyou.com (NASDAQ:CYOU)

$2.67

11

Source: Yahoo! Finance.

With the exception of The9 -- in for a tough near-term haul after losing its World of Warcraft license in China -- the companies expect to earn even more next year. It's hard to fathom another high-margin industry on a growth tear like this, yet with all its key players trading at forward earnings multiples in the mid-teens or lower.

This doesn't mean that the stocks have been dogs. Shanda and NetEase were recommended to Motley Fool Rule Breakers subscribers more than four years ago, and they've appreciated by 36% and 126%, respectively, since then. If that doesn't impress you, consider that the S&P 500 has fallen 25% in that time.

Certainly, there are industry, company, and even country risks here, but it's hard to argue against the tempting valuations. Unless its growth gets derailed, this sector should easily beat the market over the next couple of years.

Three more ways to play in China:

NetEase.com, Baidu, and Shanda are Motley Fool Rule Breakers recommendations.

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