For investors who don't get to spend all day doing research on stocks, it can be hard to do the homework required to find the next big international stock. Allow me to introduce you to one that should be on your radar: Zhongpin (Nasdaq: HOGS), a Chinese pork processor and packager.

What they do
The Chinese consume roughly 50% of the world's pork. Traditionally, Chinese pork has been sold in wet, or open-air, markets. It is kept at the ambient temperature for the consumer to buy, instead of being frozen, as we're used to in the United States. Quite simply, the process of freezing and ensuring sanitization is too expensive for the average vendor.

That's where Zhongpin comes in; you could think of Zhongpin as the Chinese version of Hormel. They package and either chill or freeze pork products to be distributed to vendors throughout eastern China.

An enormous opportunity
Long considered a sleeping giant, the rise of the Chinese middle class has been well-documented. In 2007, Euromonitor reported that the Chinese middle class had grown to 80 million people. What's their prediction for the year 2020? It's 700 million! Yep, you read that right, 700 million. That's an increase of 775% in just 13 years. Even if this prediction overshoots by 100 million, the increase is still astounding.

Zhongpin will profit from this trend for two reasons.

  1. As people move into the middle class with full-time jobs, time will be a more valuable commodity. The ability to have pork, because it's frozen, available at a moment's notice, will help save time.
  2. With the means to obtain food that is certified to be free from diseases, consumers will pay for the added peace of mind.

Why so cheap
Though it's had a recent run-up in price because of diplomatic spats between the U.S. and China, Zhongpin is still cheap. It currently trades for 13 times its trailing earnings, only 9.6 time future earnings, and has a measly PEG ratio of 0.69. Those are minuscule numbers for a company with Zhongpin's potential.

This is due, in large part, to the dangerous nature of small-cap Chinese stocks. It isn't like your average investor can hop in the car and check out the company's factory, or test their products. Allegations of financial dishonesty from companies such as China Marine Food (NYSE: CMFO) and -- just this week -- China Green Agriculture (NYSE: CGA) make it hard for investors to pay any premium for growth.

Though there's no foolproof way to ensure the same won't happen to Zhongpin, there are signs that the company could be cut from a different cloth. One of the key criticisms of Chinese small caps is the inadequacy of their auditing firms. Though Zhongpin doesn't have a Big Four auditor yet, their investors are pushing in that direction; and RiskMetrics currently identifies Zhongpin's auditing as a low-risk situation.

In the end, no Chinese small cap should garner a large part of your portfolio, but by picking out a solid few, your returns could get supercharged. Zhongpin could be the stock that helps you get there.

For more on Zhongpin:

Fool contributor Brian Stoffel owns shares in China Green Agriculture and Zhongpin. China Green Agriculture is a Motley Fool Global Gains recommendation. The Fool owns shares of China Green Agriculture. Try any of our Foolish newsletter services free for 30 days. 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.