Under-the-Radar Tech Stock for Today

"Under-the-Radar Stocks" is a daily feature that uncovers little-known companies worthy of investors' consideration. Check in at 5 every morning to find out about stocks that tend to beat their bigger brethren.

Technology and emerging markets are big winners in the stock-market rally. The tech-heavy Nasdaq has risen 44% from its March 9 low, and the iShares MSCI Emerging Markets Index(EEM Quote) has climbed 60%, beating the Dow Jones Industrial Average and the S&P 500 Index.

Why not seek investments that offer dual exposure? Beijing-based NetEase.com(NTES Quote) has American Depositary Receipts (ADRs) that fit the bill. NetEase is China's second-biggest online games provider, offering not only games but also Internet portals and wireless services. (Activision Blizzard(ATVI Quote) is the world's largest video-game publisher.)

The company's main source of revenue is online games, which generated about $106 million, or 93%, of the total. MMPORGs, or multi-player online role-playing games, are popular in China. To pay for MMORPG playing time, players use a proprietary prepaid point system by purchasing physical point cards or virtual point cards online. NetEase also sells advertising space on its Web sites, which got average daily page views of 640 million in December 2008.

The company's first-quarter revenue rose 24% to $114 million, and earnings per share increased at more than twice that pace. That superb performance is credited to decoupling, the notion that China's economy is no longer dependent upon Western growth, as well as surging Internet adoption in Chinese metropolitan areas.

In addition to strong operating performance, NetEase has a clean balance sheet. The company holds $883 million of cash reserves and has no debt. Its high margins, sound financial position and growth potential make NetEase an attractive stock. But an obvious negative is the company's no-dividend policy.