Newsletter Watch: Beijing bets

With 1.3 billion citizens benefiting from a growing economy, it's hardly a stretch to understand investor enthusiasm for stocks that combine "China" and "food." Add to the mix the buzzwords "natural," "organic" and "environmentally-friendly," and we have a pair of intriguing plays on the rise in demand by Chinese consumers for higher quality — and healthier — foods.

The first, China Agritech (Nasdaq:CAGC), is a distributor of fertilizer, and has products that are designed to be environmentally friendly. I would emphasize that with a market capitalization of just $57 million, this issue should only be considered by those comfortable with buying micro-cap stocks.

The second is American Oriental Bioengineering (Nasdaq:AOB), a player in the market for natural foods and herb-based products. The company is a relatively large play ($809 million market cap) among small caps in general.

Jim Trippon, editor of The China Stock Digest, says that "China Agritech is a relatively new and rapidly expanding player in the Chinese agricultural scene."

The company is a leading developer, manufacturer and distributor of environmentally friendly liquid organic fertilizers. "China Agritech's unique, proprietary fertilizers are the result of over 12 years of research and development," Trippon says.

The firm's ongoing growth strategy, he says, includes geographic expansion throughout China as well as exports to other Asian countries.

Listed in the United States in February 2005 through a reverse merger, Trippon believes that China Agritech is uniquely positioned to become one of the "leading" agricultural products companies in the People's Republic of China.

"Due to the continuing decrease in the amount of available farmland in the China, along with the projected increase in population, and the growing demand for organic foods around the world, there is a considerable increase in the use of . . .

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