What you need to know about Chinese technology stocks

Chinese technology stocks are exciting for emerging market investors. Just like American tech companies it’s hard to know who will succeed. Here are five technology stocks that investors should keep an eye on.

Technology stocks. Image courtesy bfishadow: http://www.everystockphoto.com/photographer.php?photographer_id=64327

Chinese technology stocks can be friends or foes.

BAIDU: Known as the “Google of China,” Baidu (BIDUquote) dominates search in the People’s Republic. Its sales increased 60% over the last year, but analysts are wary of the company’s plans for a new smartphone.

CHINA MOBILE: This stock (CHLquote) is the world’s biggest mobile phone company. It is highly profitable, paying a 4.29% dividend to investors, but its fortunes are tied to Apple (AAPLquote). That’s good news as long as Apple’s plans to add more Chinese-language features to iOS pay off.

DANGDANG: China protects its internet space with “The Great Firewall of China,” which serves two purposes: keeping China’s citizens quiet, and providing a safe harbor for local companies.

This means China offers parallels to most of the best-known Western technology stocks. For Google, there’s Baidu. For Amazon, there’s Dangdang (DANGquote). Like Amazon, Dangdang dominates the internet retail market. The company tripled its sales in the fourth quarter of 2011.

NETEASE: Not every Chinese internet company has a parallel. Netease (NTESquote) is a portal known for games. (The company holds the World of Warcraft license for China). It profits from advertising and game subscriptions, but it has had mixed results with shopping sites.

SINA: Last and perhaps least, Sina (SINAquote) plays the role of Twitter in China. The company is losing money, and may not be able to find a way to keep its shareholders, customers, and the Chinese government happy. On the other hand, its Weibo microblogging service is incredibly popular. Sina is a risky investment, but it may have huge effects on technology stocks and Chinese society.

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