As you know I like to look at stocks by sector. Unfortunately, my China list includes six sectors only (energy, basic materials, industrial goods/transport, technology, telecom service, and utilities). There are no consumer cyclicals, consumer staples, healthcare or banks.

If I lived in China, my list would cover all sectors, but from where I sit I'm not prepared to take that risk. For the China stocks I like, all of them, except for Asiainfo (NDQ: ASIA) trade on the NYSE, and shareholder and trading information is plentiful.

Here is the list:
Sector 10: Energy
CEO CNOOC: Holds all China offshore oil rights
PTR Petrochina: World's 4th largest oil company and holder of northern China oil rights
SNP China Petroleum & Chemicals (Sinopec): Profitable holder of southern China oil rights
YZC Yanzhou Coal Mining: Billion dollar coal producer at 20 pct net earnings rate

Sector 15: Basic Materials
ACH Aluminum Corp of China: half the size of Alcan and more profitable
BYH Yanhua Petrochemicals: Very profitable manufacturer of resins, plastics
SHI Sinopec Shanghai Petrochemicals: Profitable maker of fibers, resins, plastics

Sector 20: Industrial Goods/Transport
CBA Brilliance China Automotive: Profitable maker of BMW's and mini-buses
CEA China Eastern Airlines: Shanghai-based profitable airline
GSH Guangshen Railroad: Very profitable railroad between Guangzhou- Hong Kong
ZNH China Southern Airlines: Guangzhou-based profitable airline

Sector 45: Technology
SMI Semiconductor Manufacturing Intl: Shanghai-based chip foundry (as yet unprofitable, but well positioned)

Sector 50: Telecom Service
ASIA Asiainfo: Profitable company that built China's Internet
CHA China Telecom: Exclusive integrated telecom service for northern China
CHL China Mobile: Major mobile telecom service that is very profitable
CHU China Unicom: Major mobile telecom service that is very profitable
CN China Netcom: Exclusive integrated telecom service for southern China

Sector 55: Utilities
HNP Huaneng Power: Major thermal power utility for China that is very profitable

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Regardless of what you hear from Wall Street spinmeisters about China, China's growth will be relentless, and you simply must participate there in order to grow and protect your wealth. To fail to do that is to put your head in the sand.

There are risks involved, however, so it's best to stick to the very best quality Chinese companies, and to restrict the percentage value of your holdings to somewhere in the 3 to 5 percent range of the total.

Presently (1Q05) I recommend just 3 pct, but if, as and when the global equity market has a shakeout, including China, I would position up to eight pct of my capital within the list of stocks I have given you today.

Over the next day or two I plan to write separate articles on each of the stock sectors, and the stocks presented here today. I think you'll be impressed with all of them.

Then, you'll just need to get your entry timing down right.

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The charts used here are from Investertech, which is a service I use because it offers multiple charts to a page, and charts in multiple time frames. The info summaries come from Yahoo Finance, which deserves the "Very Best of the Web" accolade. Finally, the excellent financial data, and any quote monitors, I show come from ADVFN. Starting in March, I'm going to get involved in the ADVFN chat rooms because this service is starting to add online price data from all the major stock exchanges in the world, and I want to encourage that. As better services become available, I'll use them too. Please let me know your favorites.

BCara@BillCara.com

p.s.,

I erred (when first publishing this article) in describing the airlines as consumer cyclicals. The classification systems (GICS and others differ in some respects), but I have decided to standardize all my writing around the S&P GICS. Some of my notes that I use for this blog are a couple years old and need to be updated. In any event, for a one-person editing and publishing empire (;-)), I'm not bad.