It shouldn't be a surprise to learn that China's economy is smoking hot. Gross domestic product for the world's most populous nation increased by 11.9% for the first quarter, China's headiest expansion in three years.
I singled out seven Chinese growth stocks with attractive valuations earlier this month. Last month, I suggested a few companies fueled by Chinese consumers that will thrive as the yuan appreciates against the dollar.
Today, I am going to key in on a few companies that stand to benefit greatly from China's consumer-driven growth. After all, if wealth is being generated in China, consumers are likely to spend more.
Shanda Interactive (Nasdaq: SNDA ) : The pioneer in online gaming is still going strong. China's youth is mesmerized by multiplayer fantasy games, and Shanda's revenue rose 49% in last year's fourth quarter.
Nepstar (NYSE: NPD ) : The chain of nearly 2,500 Chinese drugstores is bouncing back. Revenue climbed 13% in its latest quarter, fueled by expansion and a 10.5% spike in comps at its older stores. In the meantime, investors can enjoy a chunky 3.8% dividend.
AirMedia (Nasdaq: AMCN ) : There are plenty of compelling plays on China's travel industry. Ctrip.com (Nasdaq: CTRP ) is the country's leading travel portal, growing quickly as users gain confidence in booking arrangements online. China Lodging (Nasdaq: HTHT ) went public last month, giving investors a hospitality play beyond the popular Home Inns & Hotels (Nasdaq: HMIN ) . Let's call AirMedia the play less traveled. The company populates China's leading airports with print ads, digital frames, and TV screens. It also operates ad-backed monitors on airplanes. Profitability has been a problem, but revenue climbed 12% in its latest quarter.
China Finance Online (Nasdaq: JRJC ) : Consumers may be tempted to spend their newfound wealth, but many will do the smart thing and invest. China Finance Online operates two of the country's most popular financial research portals. With 14 million registered users -- but only 117,900 as paying premium subscribers -- the upside is there as more citizens take their due diligence seriously. China Finance Online posted a deficit in its latest quarter, but it says it expects a small adjusted profit this year.
Clearly there are plenty of ways to ride China's buoyant economy. As long as an investor is comfortable with the risk of buying into a country with a restrictive government, the growth is there for the picking.
How are you playing China's speedy growth? Share your thoughts in the comments box below.
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