These days, the storm amongst China small-caps appears to finally be over. The hysteria surrounding the sector died down as the short sellers moved on to new targets. Financial journalists moved on as well, drawn by the eurozone crisis and the Occupy Wall Street movement. During the first six months of 2011, TheStreet.com published approximately 30 articles on the China reverse merger implosion. Since the beginning of July, the financial website has published only two.
In the end, the sector is undeniably stronger now that the bad apples have been shaken out. Many of the companies left standing have sound fundamentals, low valuations, proven management teams, and tremendous growth. As the trepidation surrounding China small-caps continues to fade, these stocks are poised to rebound in 2012: