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Interested in diversifying outside the US? One idea is to consider stocks from emerging markets such as China. With this idea in mind, we ran a screen.

We began by screening for US-traded stocks of companies based in China for those with high growth prospects, with 5-year projected EPS growth above 15%.

We then screened for those that may still be undervalued, by comparing price trends to changes in EPS estimates over the last month.

Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don't match up, a mispricing may have occurred.

We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued.

(click to enlarge)

Do you think these stocks will meet their high growth expectations? Use this list as a starting point for your own analysis.

List sorted by growth in EPS estimate over the last 30 days.

1. Kongzhong Corp. (KONG): Provides wireless interactive entertainment, media, and community services to mobile phone users in the People's Republic of China. Market cap at $273.81M, most recent closing price at $6.59. 5-year projected EPS growth at 21.00%. The EPS estimate for the company's current year increased from 0.46 to 0.63 over the last 30 days, an increase of 36.96%. This increase came during a time when the stock price changed by 10.54% (from 5.69 to 6.29 over the last 30 days).

2. ChinaCache International Holdings Ltd. (NASDAQ:CCIH): Provides Internet content and application delivery services to businesses, government agencies, and other enterprises in the People's of Republic of China. Market cap at $133.45M, most recent closing price at $5.82. 5-year projected EPS growth at 30.00%. The EPS estimate for the company's current year increased from 0.25 to 0.28 over the last 30 days, an increase of 12%. This increase came during a time when the stock price changed by -17.37% (from 5.24 to 4.33 over the last 30 days).

3. BCD Semiconductor Manufacturing Limited (NASDAQ:BCDS): Engages in the design, manufacture, and sale of power management analog integrated circuits and other semiconductor devices in the People's Republic of China. Market cap at $89.43M, most recent closing price at $4.85. 5-year projected EPS growth at 17.17%. The EPS estimate for the company's current year increased from 0.45 to 0.5 over the last 30 days, an increase of 11.11%. This increase came during a time when the stock price changed by -17.55% (from 5.64 to 4.65 over the last 30 days).

4. China Lodging Group, Limited (NASDAQ:HTHT): Develops, operates, and manages a chain of hotels in the People's Republic of China. Market cap at $670.51M, most recent closing price at $11.01. 5-year projected EPS growth at 20.00%. The EPS estimate for the company's current year increased from 2.66 to 2.81 over the last 30 days, an increase of 5.64%. This increase came during a time when the stock price changed by -7.16% (from 12.85 to 11.93 over the last 30 days).

*EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 4 High-Growth Chinese Stocks Undervalued By EPS Trends