Why We Could See a 131% Gain on This Chinese Travel Firm

“Data Show China Growth Merely Moderating,” notes a recent headline in The New York Times, citing September improvements in manufacturing indexes. Despite concerns that China’s emerging economy was set to contract violently in the midst of the Great Recession, the slowdown hasn’t happened. While Western economies got smaller, the Chinese economy didn’t shrink — it simply expanded less fast.

For investors who’ve been wary of investing abroad in recent years, that’s a telling metric. Unlike the fragile, tentative recovery we’re experiencing here in the United States, China’s economy is pushing ahead.

September’s manufacturing data are far from the first sign that China is a wise choice for U.S. investors in 2010. Earlier this year China’s economy moved into the No. 2 spot in the world, usurping Japan’s place on the list of largest economic powers. In all, it’s just the latest chapter of what’s been a tremendous growth story for the last three decades.

China’s economic growth has far outpaced U.S. GDP in the last few decades, giving rise to a new, high-consuming middle class.

If you’ve been following our analysis of investing in China for the past few months, you know that we’re big believers in the consumption spree that China’s burgeoning middle class is starting on. An estimated 50 million people per year are being added to the Chinese middle class — a group that already includes around 20% of Chinese households. While members of the “middle class” in China have much lower incomes and spending power than their Western counterparts, their sheer numbers make the potential rise in spending truly significant.

And one of the biggest industries to benefit from that increased spending is the travel business…

In last month’s issue of Penny Stock Fortunes, we said that we were already bullish on the Chinese travel business (see Another Potentially Profitable China Play, September 2010)… And for good reason. Chinese airlines have seen record increases in passengers in recent years — and passenger numbers are expected to triple to 700 million annually in the next decade.

China Southern Airlines made news in 2009 when the airline recorded the third-largest passenger count of any airline in the world, making it the largest carrier in Asia — a first for any Chinese airline. But China Southern isn’t alone…More significantly, two other Chinese carriers made the top 10 list, eclipsing CSA’s passenger count by a landslide.

Airlines are just the tip of the iceberg. Right now, we’re seeing major segment growth in everything from hotels to tours. All in all, the Chinese travel industry is in full-boom mode — and this month, we’ve discovered a pure-play Chinese travel stock that stands to deliver 131% gains at current levels.

[Editor’s Note: Just before we recommended buying shares of this Chinese travel firm earlier this month, a misguided short attack sent shares lower, giving us a better buying price, and an even higher potential return. Our due diligence shows that this stock is more attractive than ever right now – and we’ve updated our Penny Stock Fortunes readers on the full details.

With shares just under our target buy-up-to price right now, there’s still time to buy this stock, but it won’t likely last long. To get our complete report on this exciting company, click here now…]

Sincerely,
Jonas Elmerraji
Penny Sleuth

September 30, 2010

Why We Could See a 131% Gain on This Chinese Travel Firm was originally featured in the Penny Sleuth. Check out Wall Street’s 5 Most Profitable Penny Stock Patterns Report.

This story was originally featured on Penny Sleuth.

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