7 Cheap Chinese New Year Resolutions

China celebrated the start of its new lunar year earlier this week, just as the rest of us closer to home were breaking our New Year resolutions.

It's the year of the ox, but I'm hopeful that it will also be the year of the bull.

I know. By our calendar's count, 2008 was atrocious for stocks, Chinese equities included. The world's most populous nation also began to show economic cracks, even though it is still growing at a pace that would make most developed nations envious.

The Olympic Games in Beijing should have been China's moment to shine. Despite smoggy skies, protestors, and allegations of underage gymnasts, the country was able to keep itself together as it posed for the world in August. History can touch up the blemishes if it wants to.

Growth snags a discount
As an investor, I'll remember last year as a period when some of the country's biggest growth stocks suffered sharp pullbacks despite posting higher earnings. It's not a fun one-two punch to live through as it happens, but it sure creates some compelling valuations as we look to kick some oxtail -- or osso bucco, if you will -- in 2009.

Let's take a closer look at analysts' expectations for seven of the country's most popular growth stocks.

Source: Yahoo! Finance.

You'll find warts, of course. Baidu took a credibility hit in November when it was exposed for running ads from unlicensed medical companies. Online gaming giant NetEase will always be susceptible to a historically hard-fisted government cracking down on Internet cafes where its multiplayer fantasy games are booming.

However, take a look at the final column in the table. These are companies trading at attractive forward earnings multiples. Did you ever think that China's leading travel portal -- Ctrip -- could be had for an earnings multiple in the teens? Sohu.com isn't just my favorite stock for 2009. How can one resist a speedy new media company, fetching just nine times this year's earnings but growing at more than twice that pace in 2009.

Get 'em while they're not hot
Did I mention that all seven of these stocks are still growing? Many of our own country's growth darlings are expecting to take a breather in 2009. It's understandable, given the drying up of discretionary income and corporate spending.

You won't find a pregnant pause here. These companies are slated to grow their bottom lines by 11% to 42% this year. As fate would have it, some of the bigger spurts are coming from the companies with the richer P/E multiples. Baidu and for-profit educator New Oriental may not seem cheap at 2009 multiples of 22 and 21, respectively. However, analysts see Baidu's profits climbing 29% this year. New Oriental Education is looking at a 42% surge.

Can the valuations change? Of course. The Chinese economy isn't rumbling along at the 10% annualized clip it was racing at in recent years. Analysts have recently adjusted their forecasts on some of these stocks lower in recent months.

In short, things can definitely get worse. Then again, the flipside is also possible. These companies were growing at much headier rates than their forward targets suggest before the recent slowdown. These already ridiculous valuations will look outright insane if things begin to pick up later this year.

Either way, I still like the prospects of the great deals that someone with a globally diversified portfolio can find in China these days. Ox? Bull? Is there really all that much of a difference?