3 Companies Profiting from China's Rise

Brittney Barrett |

china bull stocksChina has fast been climbing the ladder of largest global economies, surpassing Japan earlier in the year for the number two spot and setting its sights on the U.S. Still, many investors are wary of investing in Chinese companies, which are not subject to the same quality standards as stocks trading on the major U.S. indexes. Alternately, it's possible to invest in companies that directly benefit from China’s nine-plus percent annual economic expansion but trade domestically. There are a considerable range of American companies profiting from China’s ascent. As the Chinese population demands western brands and products, ranging from accessories to computers, the U.S. brands are seeing a surge in sales. That demand may continue to steepen as China's GDP per capita, around one-tenth of the United States at present, increases over time. Among the companies seeing the most demand from China are those with good brand recognition.

Apple (AAPL)for the moment is one of these companies. The sleek design of their electronics and user friendly interfaces have appealed to Chinese mobile users in a big way,  but it looks like the new MacBook Air is having a similar impact. Chinese sales were cited by freshly minted Apple CEO, Tim Cook as being a major factor in their results. Apple's Chinese sales have really impressed and the stronger the country becomes the more individuals will be looking to buy Apple versus a PC. Wealthy people in China have turned largely to Apple and it's become something of an aspiration brand of a status symbol, much like a designer handbag or something else of this nature. This will help Apple appeal to the growing middle class and continue to drive Apple sales in the future.

Tiffany's (TIF): Last week Tiffany's reported fiscal second-quarter profit up by 33 percent on strong international sales. The Asia-Pacific region led the increases and is likely to continue to do so as the wealth disparity allows the growing upper class to indulge in high-end jewelry. Again, Tiffany's is an iconic brand which tends to thrive in an Asian market. The greater the wealth expands and increases, the better it will be for Tiffany's.

Intel (INTC): PC demand stateside has been weakening but China has been coming in to pick up the slack. More people in China are wanting and needing computers and those that will be unable to afford to purchase Apple will likely settle on a PC. Additionally, the prevalence of online gaming in China, which is largely performed on PC's will help drive demand for PCs in the future. Intel will directly benefit from this trend, as will a basket of other semiconductor and PC-related stocks. Intel's ongoing strength and size will assure that the brand can handle the influx of demand for its products not only in China but other emerging markets like India and Turkey.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 113.05 0.87 0.78 36,379,106
INTC Intel Corporation 37.75 0.43 1.15 24,279,306
MER.P.M Merrill Lynch & Co. Inc. 6.45% Trust Preferred Sec n/a n/a n/a 0
TIF Tiffany & Co. 72.63 1.26 1.77 1,233,266

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