Four China Stocks to Watch This Week

With the temporary rebound of the Chinese OTC stocks, people are again dipping their toes in the water. My view is that this is a great time to re-enter the market. Five stocks that I'll be tracking closely this coming week are:

1) China 3C Group (CHCG.OB) - the company revised upwards its 2007 EPS guidance from $0.40-$0.44 to $0.43-$0.47. While this is not a big change, it seems to signal that the company's once heady growth may be resuming. What is exciting news is that it has partnered up with 3C800.com, an e-tailer of electronic goods to create an online presence. While Alexa shows that 3C800 doesn't even crack the top 30,000 in terms of the most trafficked sites in China, this could, in time, be something quite interesting. In any case, CHCG has gone up more than 20% over the last two trading sessions.

2) Kandi Tech Corp. (KNDI.OB) - don't you love Kandi? Well, I do. This company is newly installed on the OTCBB and still (relatively) undiscovered. Let's see what happens as people get acquainted with the stock.

3) China Pharma Holdings (CPHI.OB) - I wasn't at the Roth Capital conference in Phoenix but certainly CPHI seemed to have impressed at least one of the institutional investors. Someone bid for 100,000 shares at $3.60 on Friday.

4) MYST.OB - this is one stock that has yet to recover with the rest of the market and I think its time is soon. Perhaps the investor community has yet to realize what a cash cow its subsidiary Subaye.com is proving to be. FYI - Subaye.com provides B2B video-based e-commerce solutions to merchants including those on Alibaba.com. Currently the company is in talks with China Telecom (CHA) and Google (GOOG), and you know what that means.

5) China Transinfo Tech (CTFO.OB) - this stock is up almost 25% in one week on news that it is going to help the City of Chengdu with its transportation management platform. This is no small task. Chengdu is the fifth largest city in China with a catchment population of over 10 million, and the largest city so far for which the company is developing a comprehensive data infrastructure. Where does it go from here?

My Position: Long CHCG.OB and CPHI.OB.