about NINE

**lzhang** Fri Sep 15, 2006 10:33 pm

about NINE
Hi blast,

I do not know if you have studied NINE. I have followed the stock price for quite a while and recently the price dropped below its book value, I did a very rough study and found it was pretty attractive and then bought some for myself. Coincidently Mr. Duan was buying recently according to recent SEC filing and increased his position on NINE.

I do not know if you have time to study it or are interested in it. One concern for investors in US to invest in Chinese stock is the ethics and integrity of the mangement team and China's policy risk. Currently the stock market may have too negative view on the future of NINE.

The risk is pretty limited even with very rough study on their business. Currently it is traded <= its book value, but it is still PROFITABLE. Their business is pretty stable on a growing customer bases. Their relation with China's gov is solid. I think you may know how hard and how important that is. They can not make fat profit easily as before, but they still make profit and are trying to find new ways to bring more. The free software did have negative impact on their profit, but that is just short term effect imho. The free software is likely to bring more users. And because of the free software, their semi-monopoly position in the business is fortified, because otherwise the fat profit before is likely to bring potential competitors into the business even it is very hard to establish all the networks with customers and gov. They are trying to sell premium services and they are becoming more and more like a service company.

I think the mangement team is trustworthy. My conclusion is based on high insider holdings and Mr. Duan's confidence on them. Mr. Duan was a successful enterpriser in China and he knows how to find honest people in China. Once he said he knew hundreds of CEOs in China, but he only invested in very few. NTES is one, NINE is the new one.

NINE will be even more attractive if it can drop to its NCAV, but I think at this level, it is already very attractive with very limited downside risk. I do not know if you can consider the possibility to add it as part of BIRTP.

Thanks,

lzhang

**zdplus** Fri Sep 15, 2006 10:48 pm

Re: about NINE
Several weeks ago I asked blast's view on this one.
Blast said this one seemed pretty good...

lzhang wrote: Hi blast,

I do not know if you have studied NINE. I have followed the stock price for quite a while and recently the price droped below its book value, I did a very rough study and found it was pretty attractive and then bought some for myself. Coincidently Mr. Duan was buying recently according to recent SEC filing and increased his position on NINE.

I do not know if you have time to study it or are interested in it. One concern for investors in US to invest in Chinese stock is the ethics and integrity of the mangement team and China's policy risk. Currently the stock market may have too negative view on the future of NINE.

The risk is pretty limited even with very rough study on their business. Currently it is traded <= its book value, but it is still PROFITABLE. Their business is pretty stable on a growing customer bases. Their relation with China's gov is solid. I think you may know how hard and how important that is. They can not make fat profit easily as before, but they still make profit and are trying to find new ways to bring more. The free software did have negative impact on their profit, but that is just short term effect imho. The free software is likely to bring more users. And because of the free software, their semi-monopoly position in the business is fortified, because otherwise the fat profit before is likely to bring potential competitors into the business even it is very hard to establish all the networks with customers and gov. They are trying to sell premium services and they are becoming more and more like a service company.

I think the mangement team is trustworthy. My conclusion is based on high insider holdings and Mr. Duan's confidence on them. Mr. Duan was a successful enterpriser in China and he know how to find honest people in China. Once he said he knew hundreds of CEOs in China, but he only invested in very few. NTES is one, NINE is the new one.

NINE will be even more attractive if it can drop to its NCAV, but I think at this level, it is already very attractive with very limited downside risk. I do not know if you can consider the possibility to add it as part of BIRTP.

Thanks,

lzhang