Back in April, Changyou.com (NASDAQ: CYOU) launched its IPO and since then the stock price is up an impressive 138%. The online gaming company is based in China.

Well, now investors will get another chance at a similar offering as Shanghai-based Shanda Games Limited has filed to go public.

Founded in 2001 -- as a division of Shanda Interactive Entertainment (NYSE: SNDA) -- Shanda Games is a big player in the fast-growing space of massively multi-player online role-playing games, or MMORPGs. In fact, the company has 18 such titles in its portfolio (as well as 11 advanced casual games).

This post is part of a featured report on stocks in the Chinese online gaming sector.

"One lesson we learned long ago is that it often pays to recognize stocks showing unusual strength -- one such stock is NetEase (NASDAQ: NTES)," says Mike Cintolo in The Cabot Market Letter.

"In terms of stocks, NetEase is showing unusual strength. The stock started moving ahead in a powerful manner as soon as (actually a bit before) the market bottomed in March.

"In fact, NTES recently notched nine straight up weeks, all on above-average volume, breaking out of a three-year base in the process!

One month ago, we featured a special report featuring the favorite China-based stocks among financial newsletter advisors. Since then, the 14 stocks covered in the report have risen an average of more than 15%.

The performance of these stocks -- along with the overall China market -- has far exceeded the 3% gain in the S&P 500 index over the same time period. That report can be viewed here.

Despite these gains, many of the leading advisors remain bullish on China; in particular, several have recently focused on the online gaming sector in Asia. Indeed, Timothy Lutts notes that while the video game market in the U.S. is slowing, the video game market in China is expected to show 20%+ annual growth in coming year.

Analyst upgrades:

• FBR Capital upgraded KBW, Inc (NYSE: KBW) to Market Perform from Underperform as it sees increased capital-raising opportunities for small and mid-sized banks and believes the company's quarter is off to a strong start. The firm raised its target price to $23 from $18.
• Pali Capital upgraded Morgan Stanley (NYSE: MS) to Buy from Neutral on expectations the company's strategic shift towards advisory, distribution and retail will be monetized sooner than expected and its capital markets business is gaining traction. The firm set a $33 target on the stock.
• Baird upgraded Stericycle (NASDAQ: SRCL) to Outperform from Neutral and raised its target to $58 from $55 based on valuation predictable earnings, and its market leading platform.
• Apollo Investment (NYSE: AINV) was raised to Outperform from Market Perform at Keefe Bruyette.
• HSBC Holdings (NYSE: HBC) was lifted at Goldman to Buy from Neutral.
• Dow Chemical (NYSE: DOW) was upgraded to Outperform from Neutral at Credit Suisse.

While not attracting many headlines, a variety of major companies have raised large amounts of capital lately, such as HCA, Dole Foods and Altria (NYSE: MO). However, the capital source has been mostly the debt markets.

But as things ease up, might equity investors warm up to new offerings?

Well, we should find out fairly soon. China Zhongwang Holdings Ltd., which is the largest manufacturer of extrude aluminum, is planning a public offering on the Hong Kong stock exchange. The company wants to raise about $1.6 billion. No doubt, it would be the largest equity offering for the year.

Keep in mind that China's government has pumped huge amounts of liquidity into the economy. And investors have responded -- by buying up shares.