Market Overview

Seven Hot Chinese Stocks

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Vice President Xi Jinping of China meets with President Obama on Tuesday at the White House in an effort to enhance trust between the two countries. And here is a quick look at some Chinese stocks that have risen between 15% and 25% year to date. They all are traded on U.S. exchanges, and each pays a dividend, as well.

Aluminum Corporation of China (NYSE: ACH) is up more than 24% year to date, including up more than 14% in the past month. Factors driving aluminum prices lower, such as oversupply and economic weakness, have begun to abate. The Beijing company's long-term EPS growth forecast is 46.2%. The market cap is $7.3 billion and the dividend yield is 0.7%. Over the past six months, the stock has underperformed Alcoa (NYSE: AA) but outperformed Alumina (NYSE: AWC).

Huaneng Power International (NYSE: HNP) is trading near a 52-week high and is more almost 21% higher than at the beginning of the year. Last week, this electric utility received approval of People's Republic authorities for a coal terminal. The Beijing-based company has a market cap of $8.9 billion and its dividend yield is 4.8%. The forward earnings multiple is less than the industry average P/E. And over the past six months, the stock has outperformed peer Korea Electric Power (NYSE: KEP).

Mindray Medical International (NYSE: MR) shares are trading more than 15% higher year to date and about 5% below the 52-week high. The Shenzhen-based medical device maker recently said it plans to launch 7 to 10 new products for 2012. It has a dividend yield of 1.0%, the long-term EPS growth forecast is 14.2% and the operating margin is better than the industry average. Over the past six months, the stock has outperformed competitors Baxter (NYSE: BAX) and Covidien (NYSE: COV).

See also: How to Profit from Surging Chinese Prices

PetroChina (NYSE: PTR) shares are trading up more than 20% year to date despite a pullback late last week. Also last week, the energy giant reached a deal to acquire some assets from Royal Dutch Shell (NYSE: RDS-A). PetroChina has a market cap of $274.1 billion and the dividend yield is 3.6%. Its P/E ratio is in line with the industry average. Over the past six months, the stock has outperformed competitors Chevron (NYSE: CVX) and Royal Dutch Shell.

Sinopec Shanghai Petrochemical (NYSE: SHI) is trading about 21% higher year to date but still down more than 29% from a year ago. The stock rose above its 200-day moving average last week for the first time since last May. The operating margin is higher than the industry average and the P/E ratio is less than the industry average. The $2.9 billion market cap company has a dividend yield of 3.9%. But the stock has underperformed larger competitor PetroChina over the past six months.

SouFun Holdings (NYSE: SFUN) rose more than 23% year to date, but the share price is about the same as a year ago. The company operates an internet portal dedicated to real estate. EPS are forecast to show a 44.4% gain for 2011, Soufun's sixth-straight year of profit improvement. The dividend yield is 11.1% and the market cap is $5.4 billion. The long-range EPS growth forecast is 36.7%. Over the past six months, the stock has outperformed competitor Sohu.com (NASDAQ: SOHU).

Yanzhou Coal Mining (NYSE: YZC) shares are trading more than 16% higher year to date. The Zoucheng-based company said in 2011 it would acquire Australia's Gloucester Coal. Yanzhou's dividend yield is 3.7%, the market cap is $12.1 billion and the long-term EPS growth forecast is 26.4%. It has a return on equity of 33.4% and its operating margin is higher than the industry average. But the stock has underperformed BHP Billiton (NYSE: BHP) over the past six months.

See also: How to Profit from China's Plunging Imports

ACTION ITEMS:

Bullish: Investors interested in exchange traded funds focused on China might want to consider the following trades:

  • Global X China Industrials ETF (NYSE: CHII) is more than 24% higher year to date.
  • EGShares China Infrastructure (NYSE: CHXX) is more than 18% higher year to date.
  • Global X China Materials ETF (NYSE: CHIM) is more than 16% higher year to date.
  • Guggenheim China All-Cap (NYSE: YAO) is more than 15% higher year to date.
Bearish:

Traders may prefer to consider these alternative positions:

  • ProShares Short FTSE China 25 (NYSE: YXI) is trading just above a 52-week low.
  • ProShares UltraShort FTSE China 25 (NYSE: FXP) is trading just above a 52-week low.
  • Direxion Daily China Bear 3X Shares (NYSE: YANG) is trading just above a 52-week low.
Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
 

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