7 China Stocks to Turn Crisis to Opportunity
January 07, 2009 about stocks: CHL / GSH / HNP / LFC / RIO / TDF / YZC

Contributing Editor Martin Hutchinson believes one big winner from the infrastructure boom will be Vale (RIO) the world’s largest producer of iron ore. As the world’s leading producer and consumer of steel, China is also the world’s leading importer of iron ore, which - along with coking coal - is a key component in steel production.

A big source of China’s iron-and-steel demand has to do with the country’s commitment to railroads. A full $100 billion of the stimulus package will be spent on rail services. That makes Guangshen Railway Co. Ltd. (GSH) a good play.

China Life Insurance Company Ltd. (LFC).
China Life is experiencing continued growth for reasons unique to government regulations. Without a social security system, Chinese consumers must fund their own retirement - one reason the Chinese save an amazing 35 cents of every dollar they earn.

Another company worth looking at is China Mobile Ltd. (CHL).
With 443 million subscribers, China Mobile is the dominant provider in the world’s largest mobile telecom market. And in terms of growth, an additional 3 million to 4 million consumers become mobile phone subscribers in China each month, according to the Chinese Ministry of Information.

Soaring Energy Demand = Growing Profit
China’s electricity consumption rose 5.2% in 2008 and investment followed. A total of $84 billion (576 billion yuan) was invested in the sector in 2008 - 1.52% over 2007. Power grid spending rose 17.69% to $42 billion (288.5 billion yuan).
Yanzhou Coal Mining Co. Ltd. (YZC). China burns more “black rock” than the United States, Japan and Europe combined, and this company is one of China’s biggest coal suppliers. It produces lots of high-grade, low-sulfur coal, which burns cleaner and fetches a premium price.

Huaneng Power International Inc. (HNP)
Huaneng is the largest utility in China, and is a virtual lock to benefit from growth in any form. It owns 16 operating power plants, and has controlling interests in 13 others. As a state-owned enterprise, it has the contract to produce the power for the entire eastern region of China, including Shanghai and Beijing. Although it’s been generating losses lately due to high coal prices, the power company is likely to increase output and profits with any economic expansion.

If you’re leery of investing in individual stocks you might want to look at the Templeton Dragon Fund Inc. (TDF). Over 80% of the closed-end’s assets are directly invested in China. And with roughly 50 positions, it provides ample diversification.
---------------------------------------------------------------------

LET'S SEE IF THESE STOCKS REALLY GOOD CHOICES.