Chinese Companies with No Debt
Mary is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
There has been a lot of talk lately about the slowing of China’s economy. Most of this talk comes from China’s lessened manufacturing output. However, China has more to offer than just manufacturing. The following five companies all target different sectors of the Chinese market and they all hold zero debt, making them a great investment value.
Shanda Games Limited (NASDAQ: GAME) is China’s leading online game developer, operator and publisher in China. The company employs over 2,000 research and development personnel that work closely with over 20,000 game developers. The company has developed over 40,000 flash games and 70 game products. The company targets a large and diverse community of users. Online gaming is becoming increasingly popular, as gamers are starting at younger ages than in previous generations. The growth potential in this industry is exponential. Shanda Games has been listed on the NASDAQ since 2009 and currently holds no debt. Gaming, as the community of online gamers continues to grow, is a great market to invest in.
Sky-Mobi Limited (NASDAQ: MOBI) is another Chinese company that currently holds no debt. The company operates a mobile application store in China, one of the world’s largest mobile phone markets. The company was funded by U.S.-based Sequoia Capital, which also funded companies like Apple, Google, and Yahoo!. The company’s Sky Network has become China’s most influential enterprise in 3G mobile internet history with a deep family of products and core technologies that keep them ahead both at home and abroad.
China Nepstar Chain Drugstore Limited (NYSE: NPD) is China’s largest retail drugstore. The chain has grown from a single shop into a chain of 2,831 directly operated stores covering 75 cities in China. Their store set up is similar to Walgreen's or Rite Aid, but Nepstar pioneered the concept of chain retailing pharmacies in China. Established in 1995, the company received direct investment from Goldman Sachs in 2004 and was listed on the NYSE just three years later. This is yet another Chinese company that holds no debt, which is difficult to do in the retail sector.
E-Commerce China Dangdang Inc. (NYSE: DANG) is a leading e-commerce company in China. The company focuses on books and other media products. They are the largest book retailer in China in terms of both revenue and selection. They currently operate 19 fulfillment and delivery centers throughout China, placed in strategic locations. Their current annual growth rate is 58.6%. The Chinese market is a large market, and they have it cornered. In keeping with the theme they are also debt-free.
New Oriental Education and Technology Group (NYSE: EDU) is yet another debt-free Chinese company. New Oriental provides a range of educational services and products for students of all ages, even adults. They prep students for Chinese high school or college entrance exams, as well as teach them skills most valued by today’s employers. Education is extremely competitive in China and parents go to great lengths and expense to ensure their kids earn the grades that will land them in the right schools and jobs to move ahead in this world. New Oriental is currently the largest provider of private educational services in China. They are reputable and well accredited, meaning that parents will continue to bring them their children and pay the necessary price. Education is a good business to invest in China.
The manufacturing output in China may be slowing down recently, but China has more investment value than just manufacturing. Each of these companies targets a different market that is ingrained into Chinese culture. Any of these companies would make a great long-term addition to a portfolio.
MaryPosey owns shares of China Nepstar Chain Drug. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend New Oriental Education. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
