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It wasn’t a good year for China stocks. The Shanghai Composite Index fell by an aggregate 21.6% in 2011, well below the averages worldwide and even below the much-maligned European stock market. But there were a few bright spots in an otherwise forgettable year for the world’s second-largest economy.
Here are three China stocks that bucked the trend and made big gains in 2011:
1. ATA, Inc. (Nasdaq: ATAI)
Market Cap: $167.7 million
2010 Closing Price: $3.65
2011 Closing Price: $7.50
2011 Gains: 105.5%
A computer-based testing service for the financial services industry, ATA made huge strides in the first half of the year, reaching as high as $13.09 a share in early June, before tapering off late. Its revenues, net income and number of tests sold were well up from 2010. The company increased its test taker base as more people in China sought certification in the financial services industry.
2. NetEase.com (Nasdaq: NTES)
Market Cap: $5.83 billion
2010 Closing Price: $36.15
2011 Closing Price: $44.85
2011 Gains: 24%
As China threatens to pass the U.S. as the world’s largest e-commerce market, web sites such as NetEase.com are benefitting. NetEase is one of China’s leading online gaming sites, and has been attracting a growing number of young consumers.Considering that China is home to the world’s largest online population, that’s a good sign for NetEase’s future. As for the present, Netease reported a third-quarter earnings increase of 48% from the same quarter a year ago.
3. China Petroleum & Chemical Corp. (NYSE: SNP)
Market Cap: $98.67 billion
2010 Closing Price: $95.69
2011 Closing Price: $105.05
2011 Gains: 9.8%
China’s second-largest oil company posted steady gains as the country braces for an expected shale-oil boom. China’s shale-oil output could surpass production in the U.S. within the next five to 10 years, a development that would be a boon for China Petroleum, also known as Sinopec. The country reportedly is sitting on 1,275 trillion cubic feet of recoverable shale gas resources – by far the largest in the world. With eight of the top 10 refineries in China, Sinopec has become one of the world’s biggest oil producers. Through the first three quarters of 2011, the company raked in $295.5 billion – up 31% from the same period a year ago. With a new off-shore drilling deal to buy a 30% stake in a Portugese oil group’s Brazilian subsidiary, plus the expected shale-oil boom at home in China, Sinopec’s revenues may continue to climb.