For those who see the glass as half full, the Chinese trade surplus is still positive, albeit shrinking. Latest figures show the BRIC leader exporting $12.9 billion more than it imported in September.

IN PICTURES: Break Into Forex In 12 Steps

The figures have been decreasing, since peaking at roughly $30 billion back in late 2007. Compared to the U.S., which has been running a trade deficit for the better part of three decades, the Chinese economy looks strong. And there's no question that demand for cheap Chinese manufactured goods is still strong. Whether the trend stays in place or reverses, there are a number of companies that stand to gain whether the surplus is in place or not. Below we evaluate a number of them.

China Nepstar Chain Drugstore (NYSE:NPD) is one of the few Chinese issues that also offers a great dividend yield. The company offers investors 5.30% annually and a five-year annualized sales growth rate of 34.5%.

Great Cash Flows
With a full service line of pharmaceutical and health and beauty aids, NPD's 2,700 retail outlets generate tremendous revenue. So much so, the company recently declared a special $1.50 dividend to be paid to shareholders before year end, pending board approval.

China Mobile Ltd. (NYSE:CHL) is that country's premier wireless operator, with a market cap in excess of $200 billion. The shares trade with a trailing P/E multiple of 12.3-times earnings and sport a dividend yield of 3.5%. They're up almost 50% since bottoming almost a year ago, and Zack's market research finds them among the top five telecoms globally to invest in.

In the last ten years, China Mobile has reported only one period in which profits declined vis-à-vis the previous quarter.

"Rapid" Overseas Expansion Planned
China Petroleum & Chemical Corp. (NYSE:SNP) or Sinopec as it's more commonly known, carries a market cap of $78 billion and has nearly doubled in price in the last six months. The shares trade with a dividend yield of 2.3% and a P/E ratio of 10.

After reporting record profits in late summer, Sinopec announced it would be expanding its overseas operations rapidly, predominantly through acquisitions in countries like Russia, Nigeria and Australia.

Two Chinese agriculture related issues are also worthy of investors' attention, China Green Agriculture Inc. (AMEX:CGA) and AgFeed Industries Inc. (Nasdaq:FEED). CGA is a fertilizer and fruit and vegetable dealer while FEED produces pork fodder. China is the world's largest pork producer and consumer, accounting for over 50% of global production.

Both stocks are up over 400% from this year's lows.

The Bottom Line
China's on the rise, and the above named issues should continue to do well regardless any shrinkage in the trade deficit. None of them are reliant on exports for continued growth. Rather, a growing middle class and its attendant needs should drive profits in these companies ever higher. (To learn more, read Investing In China.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    Top 3 Switzerland ETFs

    Explore detailed analysis and information of the top three Swiss exchange-traded funds that offer exposure to the Swiss equities market.
  2. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  3. Mutual Funds & ETFs

    ETF Analysis: SPDR Dow Jones International RelEst

    Learn how the SPDR Dow Jones International Real Estate exchange-traded fund (ETF) is managed and for whom the ETF is most appropriate.
  4. Investing Basics

    Explaining Trade Liberalization

    Trade liberalization is the process of removing or reducing obstacles that impede the exchange of goods and services between nations.
  5. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  6. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  7. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  9. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  10. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
RELATED TERMS
  1. Trade Credit

    An agreement where a customer can purchase goods on account (without ...
  2. Equity

    The value of an asset less the value of all liabilities on that ...
  3. Brazil, Russia, India And China ...

    An acronym for the economies of Brazil, Russia, India and China ...
  4. Optimal Currency Area

    The geographic area in which a single currency would create the ...
  5. European Sovereign Debt Crisis

    A period of time in which several European countries faced the ...
  6. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!