Many American investors are intrigued by the investment possibilities offered by China's ongoing economic rise. But they're also daunted: There is a bewildering array of up-and-coming Chinese companies to consider, and getting news on many of them (or at least, news in English) can be a big challenge.
But you don't have to go to China to find companies that are thriving in the booming Chinese market. We asked our Fool contributors to identify three U.S. companies that each have a big presence in China and that are well-positioned to bring home big profits as the Chinese market grows. Here's what they came up with.
Sprinting for growth in the Middle Kingdom
Steve Symington: It's hard to find any company with a more attractive runway to bolster its presence in China than Under Armour (NYSE:UA). Last quarter alone, Under Armour's international revenue grew 68% year over year, to just over $150 million. But international sales still represented only around 15% of Under Armour's total. And during Under Armour's subsequent conference call, company founder and CEO Kevin Plank specifically singled out the greater China geography as crucial to implementing Under Armour's global growth strategy, especially amid what he described as "increasing support for sport by the government."
Plank also called this quarter an "inflection point for the brand in China" as it begins to ramp its expansion plans in earnest. So far this year, e-commerce revenue from China has already climbed 157%. And when all is said and done in 2016, Under Armour will have opened more than 150 international partner stores this year, with the majority located in China.
"We're not as famous as we will be [in China]," Plank stated, "but we're definitely proud, I think, of the inroads that we've made, and the big opportunity in putting stores behind it, putting distribution."
But arguably most important to Under Armour's success in China is the fact that its consumers largely view UA as a superior performance footwear brand, with many even regularly referring to it as "the professional brand," according to Plank. To be sure, Under Armour's men's and women's running businesses have each more than doubled from last year. And with the help of two-time NBA MVP (and loyal Under Armour-sponsored athlete) Stephen Curry, the high-end Curry 2 Under Armour basketball shoe has proven the top-selling item in China year to date in 2016. It should come as no surprise, then, that just last week Under Armour took Curry on his second tour of Asia to promote the brand over five days in Shenyang, Guangzhou, Hong Kong, and Taipei.
So with international revenue still representing such a small slice of Under Armour's total, and with the Middle Kingdom playing a central role in its overseas growth initiatives, I think Under Armour is a perfect stock to profit from the rise of China.
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