NEW YORK ( Stockpickr) -- Sometime over the course of 2011, a collective light bulb went off among investors: "Why on earth would you invest in Chinese stocks?"After all, many of these stocks sneaked into the public market space by merging into an existing shell company, avoiding the scrutiny that comes from an initial public offering process. And it became apparent that the auditors that were verifying these company's financial statements were really just giving the equivalent of a priest's blessing, waving a hand over the books and nodding their approval. >>7 Smaller Stocks Beating the Big Guys After several high-profile blowup such as China MediaExpress and Rino International, neither of which had any real business underlying their specious financial statements, the whole group has been tarred and feathered. So you should have some pity for the Chinese companies that actually do play by the rules, have real businesses, and can only sit by as their stock gets tossed into the trash bin with their more dubious peers. Here are three Chinese stocks that are legitimate and now quite undervalued.
Deer Consumer Products
China Lodging Group
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