Chinese internet stocks have rallied in recent days ahead of Facebook's filing of its hotly-anticipated IPO. Facebook isn't available in China, the world's biggest internet market, because of strict censorship laws, and according to one analyst, that makes Chinese internet stocks that offer similar services more attractive.
"The Chinese internet story is still quite strong. It's a very strong secular growth story, I think that although there are 500 million internet users in China, we think that will double to over a billion users in the next five or six years," Paul Wuh of Samsung Securities told CNBC.
Wuh said there are a number of ways to play the internet story in China. He is positive about several areas within the space including online games and online advertising. Baidu , Tencent and NetEase are three of his top picks.
"Baidu is the number one search engine in China. It's growing its revenues by over 50 percent [in 2012] and has a very strong position with over 75 percent of market share." Wu has a price target of $190 a share for the stock.
Hong Kong-listed Tencent is Wuh's second pick, "Tencent is most like the Facebook of China. It has a lot of social media, and social networking. It also has a large user base of over 500 million registered accounts." Samsung securities has a price target of HK$210 for the stock.
Wuh's final pick is NetEase which has a PE of 11. "NetEase is an online game company in China. Valuations still look attractive. It is the licensee for world of warcraft and some of the others in China and the games are doing quite well." Wuh said he expects NetEase's games portfolio to continue to be strong in 2012 and has a price target of $65 for the shares.