This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Four Stocks For Lovers of Chinese Food

The benchmark Shanghai Composite Index is currently trading at a price-to-earnings ratio of more than 18, which is significantly higher than the S&P 500's P/E of 15.2..

But small-cap Chinese stocks listed in the U.S. continue to remain undervalued as a result of limited interest from institutional investors and a lack of research coverage by U.S. brokers, say market experts. The scenario clearly presents ample opportunities for investors to ride on the growth story of companies in emerging markets.

One such opportunity to watch out for is in China's food sector. The country is home to the world's largest population with rising disposable income and as a result select small-sized companies are recording exponential sales growth.

These stocks include Zhongpin (HOGS), AgFeed Industries (FEED), American Lorain (ALN - Get Report) and China Marine Food Group (CMFO).

All of these companies are trading at a P/E of less than 9, a 40% discount to the U.S. stock markets and a 50% discount to the domestic Chinese market.

In comparison, the largest food companies globally, Unilever (UL), Kraft Foods (KFT) and Cadbury (CBY) trade at P/Es of 14.4, 14.6 and 22.3, respectively.

U.S. food majors General Mills (GIS), Kellogg (K), Archer Daniels Midland (ADM) and H.J. Heinz (HNZ) trade at a P/Es of 15.3, 14.8, 9.5 and 16, respectively.

Strong economic growth and rapid urbanization are leading to rising disposable incomes and a burgeoning industrial middle class population in China. This is resulting in changing dietary patterns which translate into strong and sustainable demand for food and other agricultural products.


The company is a leading processor and distributor of meat and food products in China. Its product line includes 314 meat products including chilled pork, frozen pork, and prepared meats, and more than 20 vegetable and fruit products that are sold under the "Zhongpin" brand.

China's dietary patterns are changing in favor of higher protein consumption and therefore, meat products. China is the largest market for pork in the world, accounting for half the global production and consumption, and is projected to grow at an average annual rate of 15% until 2012.

Zhongpin, being a vertically integrated company with a strong franchise, expanding customer base, and a healthy balance sheet, is well-positioned to achieve and sustain a longstanding leadership status. Sales are likely to zoom from $726 million in 2009 to $948 million in 2010 and to $1.14 billion in 2011, according to analysts polled by Bloomberg. At about $12.70, the stock is trading at an attractive P/E of 8.


1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CMFO $0.13 0.00%
ALN $1.18 0.00%
UL $44.86 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs