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Interested in gaining exposure to markets outside the US? For a closer look at US-traded stocks of Chinese companies, we ran a screen you may be interested in.

We began by screening for US-traded stocks of companies based in China for those that appear undervalued relative to earnings growth, with PEG below 1.

We then screened for those with strong profitability compared to industry peers, with higher gross, operating, and pretax margins than their industry averages by at least 5% on each margin. This indicates that these companies are taking a greater percentage of their revenues as profits, and they also have stronger control over their cost structures.

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Do you think these stocks are poised to move higher? Use this list as a starting point for your own analysis.

List sorted by difference between pretax margin and industry average.

1. China Digital TV Holding Co., Ltd. (NYSE:STV): Provides conditional access systems to digital television markets in the People's Republic of China. Market cap at $187.62M, most recent closing price at $3.18. PEG at 0.58. TTM gross margin at 79.54% vs. industry average at 44.46%. TTM operating margin at 44.49% vs. industry average at 28.29%. TTM pretax margin at 49.76% vs. industry average at 27.96%.

2. SouFun Holdings Ltd. (NYSE:SFUN): Provides marketing, listing, technology, and information consultancy services to real estate and home furnishing industries in the People's Republic of China. Market cap at $302.11M, most recent closing price at $16.26. PEG at 0.63. TTM gross margin at 80.67% vs. industry average at 71.36%. TTM operating margin at 40.64% vs. industry average at 21.05%. TTM pretax margin at 42.27% vs. industry average at 22.68%.

3. Focus Media Holding Ltd. (NASDAQ:FMCN): Operates out-of-home advertising network using audiovisual digital displays in China. Market cap at $2.89B, most recent closing price at $22.33. PEG at 0.92. TTM gross margin at 69.11% vs. industry average at 41.26%. TTM operating margin at 28.8% vs. industry average at 19.41%. TTM pretax margin at 27.2% vs. industry average at 14.53%.

4. Yongye International, Inc. (NASDAQ:YONG): Engages in the research, development, manufacture, and sale of fulvic acid based liquid and powder nutrient compounds for plants and animals, which are used in the agriculture industry in the People's Republic of China. Market cap at $151.11M, most recent closing price at $2.99. PEG at 0.18. TTM gross margin at 59.67% vs. industry average at 37.19%. TTM operating margin at 27.05% vs. industry average at 16.9%. TTM pretax margin at 27.72% vs. industry average at 15.73%.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Source: 4 Undervalued Chinese Stocks With Strong Profitability