China Earnings: 10 Stocks With Upside

NEW YORK (TheStreet) -- Yongye International (YONG), Wonder Auto Technology (WATG) and General Steel Holdings (GSI) are among the ten stocks reporting quarterly earnings next week.

These 10 stocks have an upside potential of 32%-113% and a mean upside value of 62%. Based on analysts' 12-month price targets and superior buy and hold ratings, these stocks are likely to outperform their peers.

During the past six months, LDK Solar ( LDK) and Harbin Electric ( HRBN) clocked highest gains among these 10 stocks, escalating 37.7% and 12.8%, respectively.

These 10 stocks are stacked based on their earnings release date, starting with the earliest.

10. Wonder Auto Technology ( WATG), through its subsidiary, designs, develops, manufactures and sells automobile alternators, starters and other automotive electrical parts. The company will announce its fourth quarter and full-year 2010 results on Mar. 14.

Net income for the fourth quarter is forecast at $9 million on sales of $99.1 million, compared to net income of $5.80 million on $62.4 million sales recorded during 2009 fourth quarter, according to analysts polled by Bloomberg. Earnings per share seen at 95 cents for 2010, up from 82 cents per share reported during 2009. For 2011, earnings per share are likely to surge by 32% to $1.25, analysts foresee.

Of the seven analysts covering the stock, 86% recommend a buy, while remaining suggest a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 92.2% to $12.9 in value from current levels.

9. Yongye International ( YONG) is engaged in research, development, preproduction and safe of fulvic acid based liquids and powder nutrient compounds for the agriculture sector. The company will report its fourth quarter earnings on Mar. 15.

For 2010 fourth quarter, net income is estimated at $3.99 million on sales of $21.5 million, higher than $2.99 million recorded on $10.11 million sales for the same period in 2010, as per analysts polled by Bloomberg. Earnings per share are forecast at $1.1 for 2010, compared to 7 cents registered in 2009. For 2011, earnings per share are seen going up by 26% to $1.39.

Of the four analysts covering the stock, 75% recommend a buy, while the remaining rate a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 112.9% to $14.7 from current levels over the next 12 months.

8. ShengdaTech ( SDTH) manufactures specialty additives that are used as functional additives in various products. It serves various industries like the building materials, paper, polyethylene, paint and many more industries. The company will report its fourth quarter 2010 results on Mar. 15.

Fourth-quarter sales are projected at $34.2 million as against $30.1 million recorded during the same period a year ago, as per analysts polled by Bloomberg. For full-year 2010, ShengdaTech is likely to report earnings of $26.8 million, or 49 cents per share, higher than $22.1 million, or 43 cents, in 2009. For 2011, earnings per share are seen at 59 cents, surging 20% from 2010.

The stock received 100% buy ratings from all the four analysts covering it. Analysts polled by Bloomberg expect the stock to gain an average 50.8% to $6 from current levels over the next 12 months.

7. ShangPharma ( SHP) is a leading Chinese contract research organization (CRO) for the pharmaceutical and biotechnology industry. The company offers a broad range of integrated services for the discovery and development of drug candidates. ShangPharma will release its 2010 fourth quarter results on Mar. 15.

The company expects year-over-year revenue growth of 26% to 33% for the fourth quarter. For full-year 2010, net revenue is seen in the range of $89.6 to $91.1 million, representing a growth of 24% to 26%. Meanwhile, GAAP gross profit is likely to increase by 24% to 28% to $29.6 to $30.5 million. Gross margins are expected to improve on favorable service mix, effective cost control, proficient material usage, and operational efficiency.

All the five analysts covering the stock recommend a buy. Analysts polled by Bloomberg expect the stock to gain an average 32% to $16.3 from current levels over the next 12 months.

6. General Steel Holdings ( GSI), through its subsidiary, manufactures steel, primarily hot-rolled steel for use in the manufacture of tractors, agricultural vehicles and other specialty markets. The company will report its fourth quarter 2010 results on Mar. 16.

Fourth-quarter 2010 sales are expected at $471.76 million, compared to $460.3 million recorded in the previous quarter and $451.9 million in the year ago-quarter, based on consensus estimates of analysts polled by Reuters. Earnings per share are seen coming in at 13 cents for 2010 fourth quarter as opposed to a loss of 26 cents in the same quarter a year ago.

Of the two analysts covering the stock, one recommends a buy, while the other rates a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain almost 75.4% to $4 from current levels over the next 12 months.

5. China Finance Online ( JRJC) engages in providing online financial and listed company data and information to subscribers in China. The company will announce its fourth quarter and full-year 2010 results on Mar. 16.

For 2010, the company expects registered user accounts to increase to 20 million, up 43% from 14 million in 2009. Net revenue for 2010 is pegged at $59 million, while non-GAAP net income attributable to China Finance Online, excluding stock-based compensation, to exceed $6 million. During 2009, the company reported net revenue and net loss of $53.6 million and $6.2 million, respectively.

Of the three analysts covering the stock, 67% recommend a buy, while the remaining suggest a hold. There are no sell ratings on the stock. Data from Bloomberg has analysts expecting the stock to gain almost 62.4% to $8.3 from current levels over the next 12 months.

4. China Fire & Security Group ( CFSG) engages in the design, development, manufacture, sale and installation of fire safety products in China. The company will announce its fourth quarter results on Mar. 16.

Net income for fourth quarter 2010 is expected at $7.87 million on sales of $25.9 million, compared to $2.90 million on sales of $16.9 million during the same period in 2009, based on consensus estimates of analysts polled by Bloomberg. Also, earnings per share are seen at 23 cents for the quarter, an increase of 170% from the year-ago quarter. For 2011, earnings per share are likely to surge by 17% to 98 cents from 84 cents in 2010.

Analysts covering the stock recommend a buy. Data from Bloomberg has analysts foreseeing the stock to gain almost 44.2% to $9 from current levels over the next 12 months.

3. Harbin Electric ( HRBN) designs, develops, and manufactures linear motors and special electric motors. The company also builds customized linear motors for a variety of applications and industries in China and for global original equipment manufacturers. The company will release its fourth quarter results on Mar. 16.

For fourth quarter 2010, sales are expected at $110 million as compared to $107.2 million during the same period in 2009, based on consensus estimates of analysts polled by Bloomberg. Net income for 2010 is forecast at $83.05 million, or $2.65, compared to $43.81 million, or 77 cents, in 2009. For 2011, earnings per share are likely to surge by 11% to $2.95.

All the five analysts covering the stock rate a buy on the stock. Analysts polled by Bloomberg expect the stock to gain almost 32.6% to $24.7 from current levels over the next 12 months.

2. Hanwha SolarOne ( HSOL), formerly Solarfun Power Holdings, manufactures photovoltaic cells and modules, provides PV cell processing services and supplies solar system integration services in China. The company will announce its fourth quarter results on Mar. 17.

Ahead of its fourth quarter results, the company in its preliminary results estimated to record net revenues between $325 to $330 million with PV module shipments seen exceeding 220 megawatts. The company had earlier forecast shipments of 205 to 215 megawatts. Gross margins are likely to hover at around 20%, with average selling price (excluding PV module processing) at $1.77 per watt -- higher than company's guidance of $1.75 for 2011. PV module shipments are forecast between 1.0 to 1.2 gigawatts.

Of the 16 analysts covering the stock, 44% recommend a buy while the remaining suggest a hold. There are no sell ratings on the stock. On an average, analysts polled by Bloomberg expect the stock to gain almost 68.7% to $13.1 from current levels over the next 12 months.

1. LDK Solar ( LDK) engages in the manufacture of multi-crystalline solar wafers catering to global manufacturers of photovoltaic products, including solar cells and solar modules. The company will release its fourth quarter results on Mar. 17.

LDK Solar has raised its fourth quarter revenue estimates to range between $870 and $910 million, compared to the earlier estimate of $710 to $750 million. Wafer shipments for the quarter are pegged at 615 to 620 megawatts (MW) and module shipments at 160 MW to 165 MW. Gross margins are expected in the range of 25% to 27%. Heading into 2011, the company expects revenue of $3.5 to $3.7 billion.

Of the 24 analysts covering the stock, 46% recommend a buy while 33% rate a hold. Analysts polled by Bloomberg expect the stock to gain an average 44.7% to $15.8 from current levels over the next 12 months.

>>To see these stocks in action, visit the 10 China Earnings Stocks With Upside portfolio on Stockpickr.

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