3 Top China Stocks
Recently we heard a lot of silly talk about an emerging “trade war” between China and the United States. I strongly urge you to ignore this nonsense. All that happened is the Obama administration implemented 35% import duties on Chinese passenger and light truck tires. This was a response to a surge of Chinese tire exports that’s crushed our domestic tire industry.
The reality is that the U.S. and China are heavily reliant on one another, and a little spate over tires isn’t going to sink the ship. Don’t forget that just a few months ago, Secretary of State Hillary Clinton traveled to China to point out that trade between our two nations is more important now than ever. That still holds true today.
China continues to be one of my favorite places to invest in. In fact, three of my favorite Chinese stocks have seen their shares jump over 1,000% from their 52-week low. This shows the potential that Chinese stocks have for diligent investors. Here are three of my favorite China stocks now:
China Stock #1 - Universal Travel (UTA)
Universal Travel provides domestic and international airline ticketing services, as well as a cargo transportation agency. The company also provides hotel reservations, tour planning, railway and express delivery, and air delivery.
But recently Universal Travel Group announced that it is selling its subsidiary, Shenzhen Speedy Dragon Enterprise Limited, back to its original owner and will exit the air cargo business. This is a sign that it is trying to stay focused on what it does best: travel. While you might think the travel industry isn’t doing too hot right now, the stock is profiting from the booming business in China, thanks to much stronger consumer spending there.
China Stock #2 - Youngye International (YONG)
Yongye International is predominately in the fertilizer businesses. The company sells nutrient compounds for plant and animal feed in China’s agriculture industry. Yongye sells its products through corporate direct sales and distributor network sales, as well as through its network of 2,000 brand stores. With a wide reach and well-known products, this company is a giant in mainland China, one of the world’s largest agricultural regions.
This huge market means huge profits for YONG. It its latest quarter, the company’s sales soared 272% and its earnings rose 265%. As the weather improves and farmers continue to prepare for next spring’s planting, the numbers will only increase for Yongye. China’s agriculture and livestock industry is in the midst of a productivity surge, and this stock is leading the way.
China Stock #3 - Sinovac Biotech (SVA)
With flu season right around the corner, Sinovac Biotech should see tremendous business in the coming months. This company develops vaccines for infectious illnesses, such as hepatitis A, hepatitis B, influenza and SARS.
Sinovac recently announced that the first lot of PANFLU.1, its swine flu vaccine, has passed the release process of Chinese regulators and is ready for delivery. Since pork is the staple meat in China, and pigs are in most cities and towns, the swine flu could be especially serious in China.
Sinovac has previously announced an order of five million doses, with the minimum purchase quantity of two million doses from the Beijing branch of the Centers for Disease Control and 3.3 million doses from the central government, all of which is to be delivered by the end of September.
Like Youngye and Universal Travel, Sinovac Biotech is an excellent buy.
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