China Trading Stocks

[maybe_this_time]

Well this Seeking Alpha writer has ABAT and APWR on thier China stocks to own in 2013....

US-listed Chinese stocks give investors an ideal opportunity to benefit from high economic growth in China. From power to the education sector, below are our top picks of Chinese stocks for profits in 2013. Please use this as a starting point for your own due diligence.

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Advanced Battery Technologies (ABAT.PK): After falling 89%, Advanced Battery stock is trading at a trailing price-to-earnings ratio of 0.81x. Advanced Battery is in the business of developing and manufacturing rechargeable polymer lithium-ion (PLI) battery cells, which are used mainly in electric vehicles and consumer electronics. With the high international prices of oil, demand for electric vehicles is expected to be on the uptrend for the next few years. The company has a strong balance sheet with cash of more than $74 million and a current ratio of 13.7x. This will allow it to pursue strategic expansions including the recently opened production facility in Dongguan City, China. This production facility will manufacture small capacity batteries used in electronics. With an over 20% return on equity over the past five years and a book value per share of $3.11, the company has shown an impressive performance and is currently priced quite cheap. Its competitor China Battery (CBAK), while larger in size, continues to make losses on the operating level compared with Advanced Battery’s operating margins of 37%.

A-Power Energy Generation Systems (APWR): Due to declining profitability, the stock price of A-Power saw a 95% decline in the last year, resulting in the stock currently trading at a trailing price-to-earnings ratio of just 0.8x. A-Power Energy distributes power generation systems to industrial companies mainly in the steel, chemicals, cement and food industries. The low stock price has also resulted in a negative enterprise value of the company, despite healthy cash balances. With a debt-to-equity ratio of less than 20%, the company is quite shielded from any negative events and is expected to see a turnaround in 2012. Similar companies like Pike Electric (PIKE) and TEC Technology (HGHN) continue to trade a high earnings multiples of 37x and 10x. With stable demand for its products, A-Power should see a significant increase in stock prices.