Best China Companies To Own In Right Now

MoneyShow's Jim Jubak thinks some small Chinese company defaults are inevitable, while defaults by bigger companies are not, and will be stopped by the Chinese government.

It turns out that China has its own version of ��oo Big to Fail.�� In early March, there has been a lot of turmoil in the market and risk in the market because China had its first ever corporate bond default. They have another few companies that are talking about defaulting in different ways on bank loans, etc., and raised the sense that there is a whole lot of risk.

What is interesting is that the biggest risks in the Chinese financial system are financing companies that are affiliated with the Hu governments. The Hu governments are not allowed to borrow themselves, so they have gotten around that regulation by setting up financing arms that then finance things like shopping centers or factories. The amount of debt here is up to about $2.9 trillion, about 40% of that has to be rolled over this year, and the sense was that these entities were in deep, deep trouble. What has been interesting is that even though you have had this worry about the first ever bond default, the yield that investors have been demanding to invest in these financial entities has fallen. It is down about 70 basis points since the end of January. Investors are saying, seemingl,y to just look at that rate. They are saying these things are less-risky than before when we were not really worried about defaults. What it really seems to imply is that investors are looking at the Chinese government and saying, ��ell some default is inevitable,��which is what the Chinese Premier said a few weeks ago. I have decided that, yes, what he really means is that some defaults, by relatively small privately owned companies are inevitable, but that defaults by things like financing entities affiliated with the Hu governments or big state owned enterprises are not inevitable. In fact, the government is not going to let those happen. That is the consensus at the moment. That is what is driving prices in the debt market for things like bonds that are being sold by these low government entities.

Best China Companies To Own In Right Now: China Gerui Advanced Materials Group Limited(CHOP)

China Gerui Advanced Materials Group Limited engages in the manufacture and sale of cold-rolled narrow strip steel products in the People's Republic of China. The company converts steel manufactured by third parties into thin steel sheets and strips. It sells its products directly to its customers in a range of industries, including food and industrial packaging, construction and household decorations materials, electrical appliances, and telecommunications wires and cables industries. The company was formerly known as Golden Green Enterprises Limited and changed its name to China Gerui Advanced Materials Group Limited in December 2009. China Gerui Advanced Materials Group Limited is based in Zhengzhou, China.

Advisors' Opinion:

• [By Jake L'Ecuyer]

  Leading and Lagging Sectors
  On Tuesday, the basic materials sector proved to be a source of strength for the US market after Yellen statement. Huntsman (NYSE: HUN) shares surged 2.62 percent after reporting strong quarterly earnings, while China Gerui Advanced Materials Group (NASDAQ: CHOP) gained around 2.5 percent.

Best China Companies To Own In Right Now: China Automotive Systems Inc.(CAAS)

China Automotive Systems, Inc., through its interests in Sino-foreign joint ventures, engages in the manufacture and sale of power steering systems and other component parts for the automotive industry in the People?s Republic of China. It offers a range of steering system parts for passenger automobiles and commercial vehicles. The company provides 4 separate series, 307 models of power steering, including rack and pinion power steering, integral power steering, electronic power steering and manual steering, steering columns, steering oil pumps, and steering hoses. China Automotive Systems, Inc. was founded in 2003 and is headquartered in Jing Zhou City, the People?s Republic of China.

Advisors' Opinion:

• [By Richard Schmidt]

  We admittedly bought into China Automotive Systems (CAAS) too soon. The stock is still down from our original recommendation price, but the future looks very bright.

• [By Richard Schmidt]

  China Automotive Systems (CAAS), which makes auto systems and components, reported record-high net sales for the third quarter. The report excited investors, who bid the stock up about 30% for the month.

Hot Information Technology Stocks To Buy For 2015: China Lodging Group Limited (HTHT)

China Lodging Group, Limited, together with its subsidiaries, develops, operates, and manages a chain of hotels in the People?s Republic of China. It operates HanTing Express Hotel that targets knowledge workers and value-conscious travelers; HanTing Seasons Hotel, which targets mid-level corporate managers and owners of small and medium enterprises; and HanTing Hi Inn for budget-constrained travelers. As of March 31, 2011, the company had 473 hotels consisting of 259 leased-and-operated hotels and 214 franchised-and-managed hotels; and 162 hotels under development, including 74 leased-and-operated hotels and 88 franchised-and-managed hotels. China Lodging Group, Limited was incorporated in 2007 and is headquartered in Shanghai, the People?s Republic of China.

Advisors' Opinion:

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on China Lodging Group (Nasdaq: HTHT  ) , whose recent revenue and earnings are plotted below.

Best China Companies To Own In Right Now: Arotech Corporation(ARTX)

Arotech Corporation, together with its subsidiaries, provides defense and security products. It operates in three divisions: Training and Simulation, Battery and Power Systems, and Armor. The Training and Simulation division develops, manufactures, and markets multimedia and interactive digital solutions for use-of-force training and driving training of military, law enforcement, security, and other personnel; provides simulators, systems engineering, and software products to the United States military, government, and private industry; and offers specialized use of force training for police, security personnel, and the military. The Battery and Power Systems division manufactures and sells lithium and zinc-air batteries for defense and security products and other military applications; and develops and sells rechargeable and primary lithium batteries and smart chargers to the military and to private defense industry. This division also develops, manufactures, and markets primary zinc-air batteries, rechargeable batteries, and battery chargers for the military; and produces water-activated lifejacket lights for commercial aviation and marine applications. The Armor Division manufactures military and paramilitary armored vehicles, and employs sophisticated lightweight materials to produce aviation armor; and uses engineering concepts to produce combat armored military vehicles and up-armor civilian commercial vehicles. This division also uses lightweight armoring materials and advanced engineering processes to provide ballistic armor kits for rotary and fixed wing aircraft. Arotech sells its products primarily in the United States, Israel, Taiwan, Canada, England, Germany, Australia, China, Hong Kong, Mexico, India, Spain, Singapore, and Japan. The company was formerly known as Electric Fuel Corporation and changed its name to Arotech Corporation in September 2003. Arotech Corporation was founded in 1990 and is based in Ann Arbor, Michigan.

Advisors' Opinion:

• [By Roberto Pedone]

  One under-$10 stock that's quickly moving within range of triggering a major breakout trade is Arotech (ARTX), which is a defense and security products and services company, engaged in two business areas: interactive simulation for military, law enforcement and commercial markets; and batteries and charging systems for the military. This stock has been on fire so far in 2013, with shares up big by 98%.

  If you take a look at the chart for Arotech, you'll notice that this stock is spiking sharply higher today right above its 50-day moving average of $1.84 a share with above-average volume. Volume so far in Thursday has registered over 430,000 shares, which is well above its three-month average action of 302,874 shares. This spike is quickly pushing shares of ARTX within range of triggering a major breakout trade.

  Traders should now look for long-biased trades in ARTX if it manages to break out above some key overhead resistance levels at $2.35 to its 52-week high at $2.71 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 302,874 shares. If that breakout hits soon, then ARTX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $4 to $5 a share.

  Traders can look to buy ARTX off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average at $1.84 a share, or below more support at $1.63 a share. One can also buy ARTX off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Best China Companies To Own In Right Now: New Oriental Education & Technology Group Inc.(EDU)

New Oriental Education & Technology Group Inc. provides private educational services primarily in the People?s Republic of China. It offers a range of educational programs, services, and products consisting primarily of English and other foreign language training; test preparation courses for admissions and assessment tests; primary and secondary school education; development and distribution of educational content; software and other technology; and online education. The company?s language training courses primarily consist of various types of English language training courses, and other foreign languages, including German, Japanese, French, Korean, and Spanish. It offers test preparation courses for language and entrance exams used by educational institutions in the United States, the People?s Republic of China, and commonwealth countries. The company also operates primary and secondary schools in Yangzhou. In addition, New Oriental Education & Technology Group Inc. deve lops and edits content for educational materials for language training and test preparation, such as books, software, CD-ROMs, magazines, and other periodicals. It distributes these materials through various distribution channels consisting of own classrooms and bookstores, as well as third-party distributors. Further, the company offers various online education programs on its Web site, koolearn.com. Additionally, it provides consulting services to help students through the application and admission process for overseas educational institutions, as well as post-secondary educational programs to help students seek career opportunities; and operates two pre-schools. The company offers educational services under the ?New Oriental? brand name. As of May 31, 2010, it offered education programs, services, and products through a network of 48 schools, 319 learning centers, and 25 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People?s Republic of China.

Advisors' Opinion:

• [By Seth Jayson]

  New Oriental Education & Technology Group (NYSE: EDU  ) reported earnings on April 24. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended Feb. 28 (Q3), New Oriental Education & Technology Group met expectations on revenues and beat expectations on earnings per share.

• [By Jake L'Ecuyer]

  Equities Trading DOWN
  Shares of New Oriental Education & Technology Group (NYSE: EDU) were 8.55 percent to $23.76 after the company reported FQ3 results. New Oriental's quarterly net income surged 50.2% y/y to US$42.1 million versus US$28.0 million.

• [By Belinda Cao]

  New Oriental Education & Technology Group Inc. (EDU), China�� largest private educational company, fell 11 percent last week to a one-month low of $16.07. Oppenheimer & Co. analyst Ella Ji said April 2 that students may avoid large gatherings because of the flu, impacting New Oriental.

• [By Mark Skousen]

  Millions of Chinese are learning English, the international language of commerce, and preparing for exams. Those are the two principal occupations of New Oriental Education & Technology Group (EDU).

Best China Companies To Own In Right Now: Renesola Ltd.(SOL)

ReneSola Ltd, together with its subsidiaries, engages in the manufacture and sale of solar wafers and solar power products. It offers virgin polysilicons, monocrystalline and multicrystalline solar wafers, and photovoltaic cells and modules. The company also provides cell and module processing services. Its products are used in a range of residential, commercial, industrial, and other solar power generation systems. The company sells its solar wafers primarily to solar cell and module manufacturers. It principally operates in Mainland China, Singapore, Taiwan, Hong Kong, Korea, India, Australia, Germany, Italy, Spain, Belgium, France, the Czech Republic, and the United States. The company was founded in 2003 and is based in Jiashan, the People?s Republic of China.

Advisors' Opinion:

• [By Gary Bourgeault]

  Other companies of note that will be hurt will be LDK Solar (LDK), Suntech Power (STP), JA Solar Holdings Co., Ltd. (JASO) and Renesola (SOL) among others. Some these are already hanging on by a thread because of taking on too much debt and defaulting on bonds.

• [By Lauren Pollock var popups = dojo.query(".socialByline .popC"); popups.forEach]

  Chinese solar-products company Renesola Ltd.(SOL) on Monday said it had appointed Daniel Lee as its chief financial officer, effective May 5. Mr. Lee will take over for Henry Wang, who is resigning May 4 for personal reasons, the company said.

• [By Paul Ausick]

  Provided that the Chinese government either encourages or permits consolidation, any of these three could be an acquirer. The likeliest target, of course, is SunTech Power Holdings Co. Ltd. (NYSE: STP), which is reorganizing and which the government has already seemed to give up on. Other possible targets include ReneSola Ltd. (NYSE: SOL) and JinkoSolar Holding Co. Ltd. (NYSE: JKS).

Best China Companies To Own In Right Now: Home Inns & Hotels Management Inc.(HMIN)

Home Inns & Hotels Management Inc. develops, leases, operates, franchises, and manages a chain of economy hotels in the People?s Republic of China. The company operates its hotels under the Home Inn brand name. As of April 28, 2011, it had approximately 800 Home Inns in operation and 1,000 Home Inns sealed in franchise agreements. The company was incorporated in 2001 and is headquartered in Shanghai, the People?s Republic of China.

Advisors' Opinion:

• [By Belinda Cao]

  The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. slumped 3.4 percent last week to a seven-month low of 89.04. The gauge traded at 13.5 times estimated earnings, 3.6 percent below the S&P�� valuation, data compiled by Bloomberg show. China Southern Airlines Co. (ZNH) and China Eastern Airlines Corp. (CEA) lost more than 6 percent April 5, while Home Inns & Hotels Management Inc. (HMIN) tumbled 16 percent in the week.

• [By Monica Gerson]

  Home Inns & Hotels Management (NASDAQ: HMIN) is estimated to post its Q4 earnings at $2.18 per share on revenue of $1.54 billion.

  Qiwi plc (NASDAQ: QIWI) is expected to report its Q4 earnings at $0.28 per share on revenue of $50.00 million.

Best China Companies To Own In Right Now: BHP Billiton Limited(BHP)

BHP Billiton Limited, together with its subsidiaries, operates as a diversified natural resources company worldwide. The company engages in the exploration, development, and production of oil and gas; mining and refining of bauxite into alumina, and smelting of alumina into aluminum metal; and mining of copper, silver, lead, zinc, molybdenum, uranium, gold, diamonds, and titanium minerals, as well as development of potash deposits. It also involves in the mining and production of nickel products, manganese ore, and manganese metal and alloys, as well as in the mining of iron ore, metallurgical coal, and thermal coal. BHP Billiton Limited sells its copper, lead, and zinc concentrates, and alumina to smelters; copper cathodes to wire rod mills, brass mills, and casting plants; uranium oxide to electricity generating utilities; rough diamonds to diamond buyers and diamond manufacturers; nickel products to stainless steel, specialty alloy, foundry, chemicals, and refractory ma terial industries; metallurgical coal to steel producers; and energy coal to power stations, power generators, and industrial users. The company, formerly known as BHP Limited, was founded in 1885 and is headquartered in Melbourne, Australia.

Advisors' Opinion:

• [By Adam Haigh]

  BHP Billiton Ltd. (BHP), the biggest mining company, slipped 1 percent in Sydney as metal futures headed for a weekly decline. Mitsui OSK Lines Ltd., which has the world�� largest merchant shipping fleet, fell 3.5 percent after a gauge of freight rates halted an eight-day rally. Sun Hung Kai Properties Ltd., the world�� No. 2 developer by market value, dropped 1.4 percent in Hong Kong after setting a lower sales target this year.

Best China Companies To Own In Right Now: TAL Education Group(XRS)

TAL Education Group, together with its subsidiaries, provides K-12 after-school tutoring services in the People?s Republic of China. It offers tutoring services to K-12 students covering various academic subjects, including mathematics, English, Chinese, physics, chemistry, and biology. The company provides tutoring services through small classes; personalized premium services, such as one-on-one tutoring; and online course offerings. As of May 31, 2011, it operated a network of 199 physical learning centers in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Wuhan, Nanjing, Hangzhou, Chengdu, and Xi?an; and eduu.com, an online education platform for online courses. The company also offers education and management consulting services, as well as sells software. It operates under the Xueersi brand. The company was founded in 2003 and is headquartered in Beijing, China.

Advisors' Opinion:

• [By Lisa Levin]

  TAL Education Group (NYSE: XRS) shares rose 4.30% to $20.86. The volume of TAL Education Group shares traded was 318% higher than normal. TAL Education's PEG ratio is 1.14.

• [By Louis Navellier]

  Education is a top priority in China and competition for the best schools are intense. TAL� Education Group (XRS) benefits form the focus on education by offering tutoring services for kids in grades k-12. They operate a network of 270 learning centers and 247 service centers in China and also have 5 call centers in Beijing, Shanghai, Tianjin, Guangzhou, and Shenzhen.

Best China Companies To Own In Right Now: 51job Inc.(JOBS)

51job, Inc. provides integrated human resource services primarily in the People?s Republic of China. . The company provides recruitment related advertising services, including print advertising services through 51job Weekly, which is a city-specific recruitment advertising publication that is published once a week and is distributed as an insert in local newspapers and/or on a stand-alone basis; and online recruitment services through its Website, www.51job.com. It also offers other human resource related services, such as business process outsourcing, which consist of social insurance and welfare payment processing, regulatory compliance, and payroll processing; and executive search services, as well as conducts training seminars in the areas of business management, leadership, sales and marketing, human resource, negotiation skills, financial planning and analysis, public administration, manufacturing, secretarial, and other skills for the general public and corporate cl ients. In addition, the company provides campus recruitment services; conducts salary, employee retention, and other human resource related surveys; organize and host annual human resource conferences and events, which include lectures, seminars, workshops, and networking opportunities for human resource professionals; and provides assessment tools to assist human resource departments in evaluating capabilities and dispositions of job candidates and existing employees, aiding employee placement, and allocating employee resources, as well as hiring and support services to employers on select recruitment projects. It provides recruitment and other human resource related services to employers through its sales offices, as well as through its sales and customer service call center. The company was founded in 1998 and is based in Shanghai, the People?s Republic of China.

Advisors' Opinion:

• [By Ben Rooney]

  51job (JOBS), an online job search website similar to Monster.com (MWW), has surged more 60% this year.

  But there is one notable Chinese dot-com stock that's sitting out the big rally. Shares of Renren (RENN), the social network known as China's Facebook (FB, Fortune 500), are down 3% for the year.

• [By John Udovich]

  As US and global economies recover, hiring should increase with overlooked recruitment related stocks like Cornerstone OnDemand, Inc (NASDAQ: CSOD), 51job, Inc (NASDAQ: JOBS) and Staffing 360 Solutions Inc (OTCBB: STAF) being among the first to benefit aside from those who have found employment: