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Chinese Internet business Netease.com resumed trading on the NASDAQ yesterday, four months after trading of the stock was halted amid problems with the company's 2000 filings.
"We have been working towards this day, improving our financial system and diversifying our operations so that this will start a new era for Netease," said William Ding, chief architect and biggest shareholder of the Chinese firm.
NASDAQ officials issued a warning on July 17 that its failure to submit its 2000 financial report would result in a suspension starting on September 4.
Netease issued a new financial report on August 31 stating its net revenues in 2000 was US$3.7 million, not the previously reported US$7.9 million. Accounting errors were blamed.
The company remains in hot water with the NASDAQ, which is requiring its 2001 financial report to be filed before July 1 this year. NASDAQ officials have warned that Netease won't be allowed to appeal any punishments it receives for future violations.
The company's acting CEO Ted Sun said last week the company will release its 2001 financial report shortly.
The resumption of Netease's trading was a welcome development.
"The event shows the determination of Chinese companies to abide by international practices and rules after the country's accession to the World Trade Organization, and it is really a good lesson for us," said Daniel Mao, chief executive of Sina.com, another NASDAQ-listed Chinese Internet business.
Yet some analysts warn it is too early to be encouraged about Netease's future because the suspension has taken a heavy toll on the company's operations.
"If investors do not have the latest financial information about Netease, how are they supposed to invest?" said Fang Xingdong, a prominent Internet analyst in China.
Chinese IT columnist Lu Weigang noted that a decline in advertising since the suspension may force investors to wait to see how Netease fares in the first quarter of 2002 before investing.
(China Daily January 3, 2002)
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