5 Chinese Tech Stocks Outperforming BRIC Markets

5 Chinese Tech Stocks Outperforming BRIC Markets

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Trading in emerging markets was down last week amid speculation about the US bond-buying program and sliding growth amongst BRIC economies. The change reversed a decade-long trend in which the growth of developing economies wildly outpaced that in developed ones.

Falling prices for raw goods worldwide is part of the problem. These global trends are more likely to affect markets in developing economies such as Russia, which rely more heavily on high prices for the goods that they export. However, the overall trend is not necessarily a bad one. As The Wall Street Journal has recently reported, not all sectors within the developing world are down. In fact, certain industries that are seen as catering primarily to the middle class, such as technology or healthcare firms, are poised to do quite well in the next year.

As growth of US firms starts to slow, it might make sense for investors to diversifying their portfolio with more technology companies based overseas. We decided to run a screen for companies operating in this sector outside of the US, with high ROI and low P/E ratios as signs that they might be undervalued. All of the companies that turned up in our results are based in China, so we screened for companies with no long-term-debt, insulating them from the largely perhipheral, but still disconcerting Chinese credit crisis

We were left with five companies on our list. 

Click on the interactive chart to view quarterly sales over time. Sourced from Zacks Investment Research. 

Do you see investment opportunities in Chinese tech companies? Use the list below as a starting point for your own analysis:

1. Giant Interactive Group, Inc. (GA, Earnings, Analysts, Financials): Develops and operates online games in the People's Republic of China. Market cap at $1.94B, most recent closing price at $8.09.

P/E: 11.24

ROI: 36.70%

 

2. Shanda Games Limited (GAME, Earnings, Analysts, Financials): Engages in the development and operation of online games in the People's Republic of China. Market cap at $1.22B, most recent closing price at $4.51.

P/E: 7.39

ROI: 16.70%

 

3. Nam Tai Electronics, Inc. (NTE, Earnings, Analysts, Financials): Provides electronics manufacturing and design services to the original equipment manufacturers of telecommunication and consumer electronic products. Market cap at $347.48M, most recent closing price at $7.71.

P/E: 4.76

ROI: 14.90%

 

4. NetEase.com, Inc. (NTES, Earnings, Analysts, Financials): Engages in the development of applications, services, and other technologies for the Internet in China. Market cap at $8.26B, most recent closing price at $63.57.

P/E: 12.77

ROI: 19.30%

 

5. RDA Microelectronics, Inc. (RDA, Earnings, Analysts, Financials): Designs, develops, and markets radio-frequency and mixed-signal semiconductors for cellular, broadcast, and connectivity applications. Market cap at $526.71M, most recent closing price at $11.35.

P/E: 10.01

ROI: 25.20%

 

 

(List compiled by James Dennin. All data sourced from Finviz.)

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