While Chinese technology stocks have been on a fabulous tear this year, many Australian fund managers argue there still might be a way to go, despite some of the warning signals that have pre-empted other asset bubbles.

Shares in e-commerce giant Alibaba have almost doubled in the last 12 months, while Tencent has rocketed over 80 per cent. Other Chinese names like Baidu and JD.com have enjoyed 50 per cent share price bumps.

Much has been said around the dizzying heights of Silicon Valley's technology stocks: Facebook stock has soared 46 per cent this year and Amazon is up around 30 per cent.

But the broad offerings of these Chinese internet giants and the fact they have only fractionally monetised their potential means these stocks may surge even higher.

"They are clearly not dirt cheap now and are certainly looking a bit punchy," says Joseph Lai, portfolio manager of Platinum's Asia fund.

"But the level of monetisation by these Chinese companies is still very low, especially when you think of how their products touch the lives of consumers in almost every way."

Alibaba and Tencent not only offer e-commerce platforms, they are social networks, logistics businesses, content creation and dissemination and arguably most importantly, they have widely used mobile payments systems.

They are also investing in fast-growing industries like ride-sharing and e-commerce in the emerging economies of India and south-east Asia.

Platinum estimates Facebook and Google generate between $US40 ($50.80) to $US50 per user from their user bases, while the likes of Alibaba and Tencent – which have access to a rapidly growing Chinese middle class and emerging economies – are only cashing in around $US5 from each user.

"When you think about the growth runway still available to these Chinese technology companies, and the amount of revenue they're still growing every year, then they really aren't that ridiculously priced," says Mr Lai.

Investors generally figure out how much a stock is worth by comparing the share price with estimates of future profits.

According to Bloomberg data, brokers are hoping Tencent's earnings will jump 50 per cent over last year and Alibaba's 40 per cent.

Alibaba, which retains the crown of China's most valuable company with a market capitalisation of $US450 billion, is trading at a price-to-earning ratio of 57, whereas both Facebook and Google have p/e's of around 35.

"These Chinese companies have grown very strongly in their own backyard and still have ways of expanding their market positions," says Peter Wilmshurst, portfolio manager at ASX-listed Templeton Global Growth Fund.

"They certainly have valuations that are getting up there, but I don't see them in bubble territory."

Chinese shares more broadly have enjoyed smooth sailing of late ahead of the Chinese Congress meeting on Wednesday.

An improved return on equity, expectations of better liquidity (following the central bank's decision to cut the reserve requirement ratio for some banks in September) and a stable monetary policy are all boosting hopes for a brighter future, said a research note from Sinolink Securities.

But Australian fund managers do concede the frothy valuations, broadly across the Chinese sharemarket, make it prudent for investors to be careful.

"We do observe that the domestic markets can be very volatile and don't always play by general fundamentals," says Mr Wilmshurst.

"The valuation spread in China is much broader, so if you find a good company, then be aware you might be asked to pay for it at very high multiples."