With U.S. battery manufacturers struggling to get final products off the ground, one Chinese competitor continues to pile up the profits that elude its rivals.

This week, Advanced Battery Technologies (Nasdaq: ABAT) announced full-year earnings packed with explosive growth and great profit numbers. In 2010, revenue jumped 52.8% to $97.1 million, while net income rose 68.5% to $36.7 million, or $0.48 per diluted share.

Compared to other battery makers, Advanced Battery Technologies looks like a no-brainer:

Company

Market Cap, Millions

Revenue, Millions (TTM)

Gross Margin

P/E

Advanced Battery Technologies $254.4 $97.1 47.3% 6.4
Valence Technology (Nasdaq: VLNC) $245.7 $16.1 12.4% n/a
A123 Systems (Nasdaq: AONE) $831.7 $97.3 -17.9% n/a
Ener1 (Nasdaq: HEV) $471.5 $77.4 17.9% n/a

Source: Yahoo! Finance.

A 6.4 P/E ratio is ridiculous, right? Why hasn't the market jumped on the Advanced Battery Technologies bandwagon yet? Alas, a few things still hold back the stock:

  • Share count has been growing almost as fast as revenue. That means EPS hasn't been rising nearly as quickly as you might think.
  • You never know when a dilutive stock offering will arrive. Last year, with $74.3 million in cash on the balance sheet, management decided to offer shares with warrants attached. Not exactly a shareholder-friendly move.
  • And if you aren't even a little worried about being caught up in another Chinese stock collapse, check out what's happened to China MediaExpress, Fuqi International, or China Green Agriculture. I'm not suggesting that ABAT will end up in an accounting scandal or an allegation of fraud but, the worry is an overhang for Chinese stocks and can't be ignored.

Outstanding growth doesn't always make a great investment. In this case, I would test the waters cautiously with Advanced Battery Technologies. Since I said the company looked like a good buy in the battery space six months ago, it has outperformed peers -- but it's been a wild ride along the way. I just can't put it on my buy list right now.

Do you think Advanced Battery Technologies is a buy? Leave your thoughts in our comments section below and be sure to add ABAT to My Watchlist, and My Watchlist will find all of our Foolish analysis on the stock.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.