Sector Snap: most Chinese Internet stocks decline

American Depositary Shares of the Beijing-based online gaming company fell $1.39, or 5.8 percent, to $22.66. The stock has traded between $13.45 and $25.70 in the past year.

In a note to investors, Susquehanna Financial Group analyst C. Ming Zhao reiterated his "Positive" rating and $30 price target for the shares.

"Excluding the tax issue, investors should find strength in its profit margin, free cash flow generations, as well as growth speed," he said.

The analyst said that with the upcoming arrival of new game "Tian Xia" he expects the company's "turnaround story to continue, and the re-acceleration of gaming revenue should ultimately lead to a higher valuation multiple than before."

Also Thursday, Oppenheimer & Co. analyst Paul Keung predicted in a client note that a 3-day service shutdown will impact Netease and The9 Ltd. more than others because they follow a time-based revenue model, not an item-based one.

Like other Chinese online gaming companies, Netease stopped operations from Monday through Wednesday as part of a national mourning period after the recent earthquake in Sichuan province.

Under an item-based model, game play is free and users pay for items within a game. With a time-based model, however, users pay for the amount of time they spend on a game.

ADS of The9, which operates the popular game "World of Warcraft" in China, rose 11 cents to $24.79.

Meanwhile, shares of competitor Giant Interactive Group Inc. fell 72 cents, or 5.2 percent, to $13.25.