Canadian Solar Inc. (NASDAQ: CSIQ) is headquartered in Canada, but virtually all the company’s solar wafers, cells and modules are manufactured in China. In addition to its Chinese competitors, U.S. solar makers like SunPower, SunEdison and First Solar compete in the same space. And like its U.S. counterparts, Canadian Solar has developed a project pipeline that focuses on solar installations in Japan. In the past 12 months, the share price has risen nearly 140%, but since posting a 52-week high of $44.50 in early March, shares have lost 45% and the company’s market cap has dropped to around $1.3 billion.
The consensus price target on the stock is around $42.30 on Canadian Solar, almost 75% above the stock’s $24 share price. This stock rose more than 1,000% in two years as solar panel prices stabilized, and while it likely won’t perform like that again, if the market’s bull run continues, Canadian Solar is well-positioned to post good growth.
China Petroleum & Chemical Corp. (NYSE: SNP) is also referred to as Sinopec, and this is the state-owned oil and gas giant of China that would be considered just like Exxon Mobil, Chevron, BP, Shell and other oil giants. The company is competing for oil and gas resources around the world against U.S. and European energy giants at every turn. The ADSs recently peaked above $95, but this briefly challenged $120 in the 2007 to 2008 oil boom. Sinopec is making partnerships globally and has a daunting task of providing massive amounts of oil and gas as the gas and energy source for well over a billion people.
One drag is that investors have a hard time knowing exactly what they own here with that state-ownership status. Still, this could easily rise back above $100 again under a bull market thesis — and maybe even rise to its former highs. Its dividend is sporadic, but it screens as being above 4%.
China Unicom (Hong Kong) Ltd. (NYSE: CHU) is far behind China Mobile in size ($38 billion market cap vs. $190 billion), but that may be a blessing, and it is believed to have better network capacity for its cellular, landline, broadband, and communications infrastructure. Among all of its lines and accounts, China Unicom claims some 444 million (yes, three fours) total subscribers. At $15, its shares have traded in a range of $11.71 to $17.19 in the past year. Still, this has been a $20 stock in 2011 and prior to the recession.
China Unicom could use a better dividend than the 1.6% listed, but the analysts have a consensus price target above $17. This could reach that $17 mark and maybe even $19 or $20, as long as the company can keep adding ways to serve its massive customer base.
E-Commerce China Dangdang Inc. (NYSE: DANG) is a business-to-consumer player in China, and its shares have been forgotten about. This has been called the Amazon of China, and the coming Alibaba initial public offering (IPO) may have changed how investors look at the company. Shares have recovered to $11 from a low of under $5 last year, but the shares have slid from a high of $19 since the focus has moved to Alibaba. The company is also worth just under $1 billion, versus sales of $1.04 billion in 2013, and Thomson Reuters is calling for $1.3 billion in 2014 revenue.
If investors think that the company can live up to or exceed its $0.45 per share earnings target for 2015, then E-Commerce China Dangdang seems like it could easily get back above $15.
JD.com Inc. (NASDAQ: JD) held its IPO less than a month ago and shares are up nearly 50% after pricing above the expected range. The biggest direct selling online retailer in China now has market cap just shy of $39 billion. JD.com faces formidable competition from both Alibaba’s Taobao.com and Amazon, but it does have a deal with China’s other big online retailer, Tencent Holdings, that gives the company prominent access to Tencent’s mobile chat and messaging apps.
JD.com shares are heavily traded, with daily average volume of nearly 15.5 million shares. What will drive the stock price is both the anticipation and the outcome of the forthcoming IPO of Alibaba, which many observers think will be the largest ever, valuing the Chinese e-commerce giant as high as $245 billion. JD.com set the table for Alibaba, and Alibaba is about ready to return the favor.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) owns and operates resorts and casinos in Asia with prime properties in the Chinese gambling mecca of Macau. Over the past 12 months, the stock price has risen nearly 28%, giving the company a market cap of nearly $16.5 billion. The not-so-good news is that shares are down 33% since hitting their 52-week high of $45.70 in early March as gaming volumes have tapered in Macau. The company’s 1.5% dividend yield is lower than either Las Vegas Sands (2.7%) or Wynn Resorts (2.4%). All the gambling and resort companies are being hurt by a recent decision by Macau’s regulators to restrict further the use UnionPay cards in the island’s casinos. Casino revenue for Macau rose 9.3% in May and is expected to rise another 1% to 5% in June.
Melco Crown’s forward price-to-earnings (P/E) ratio is lower than any of the other casino owners, and its implied upside of nearly 60% is much higher than either Las Vegas Sands or Wynn.
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