The Three Top Restaurant Stocks in China

investment opportunityChina has a population of about 1.34 billion people or about five times the size of the U.S. The size of the middle class is over 300 million and this is expected to grow exponentially as migrant workers watch their disposable income rise. The current per capita income is just below $4,000 a year, but it has more than doubled over the past few years and wages appear to be heading higher. With this comes more spending. The World Bank estimates that, within five years, there will be 542 million middle-class consumers in China. I have heard estimates of up to 700 million! All of this means money to spend.

The country is currently tops in auto sales, with an estimated 14.5 million vehicles sold in 2011, plus it has over 500 million Internet users and around 860 million cell phone users. The Chinese economy is also the largest user of concrete and steel for its massive infrastructure buildup and is projected to become tops in gold consumption, surpassing India. There’s some stalling, but overall China is still tops in my view, as I discussed in Why the Great Wall of China’s Still Standing.

The country has developed into a colossal consumer of goods but you also have to feed the 1.34 billion mouths. This is astronomical when you think of how many people this is.

As the Chinese income level rises especially in the urban centers, the demand for dining out has also increased. Just take a look at our lifestyles here and you’ll understand this trend.

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Whether it’s eating out or cooking at home, the investment opportunity for food-related stocks is immense in the country.

If you want to buy U.S. restaurant stocks that have increased their business in China, there are three main companies and, yes, the Chinese do appear to love fast foods.

The top restaurant stock in China is YUM! Brands, Inc. (NYSE/YUM)—the operator of wel