So now that the media tells us that China has had a “meltdown” (though they’re still up nicely just year to date, even with some tough down days), should we still be reading promotional emails from Chinese investment advisors?

Sure, why not — they do send out some long and complicated ones … and just as I like, they tease us about their favorite and most successful investing ideas, without quite telling us the names of the companies in question. Maybe I can figure it out.

I get emails all the time from Robert Hsu, who runs a product called China Strategy and send out “dispatches” with updated information very frequently, even though I don’t think I ever subscribed to anything of his (not that I mind — the more stock spam the better, I say!)

Hsu’s basic argument is that Chinese state-run enterprises are money-losing dinosaurs, and we should all be investing in the young and hungry entrepreneurs of the new China — the companies that aren’t directly controlled by the state. Probably not a bad idea in balance.

This latest one has a nice, appealing sell in it — here’s the company you can learn about if you sign up for Hsu’s product in some way:

“China’s largest private education service provider”

Hey, that sounds like a company that might make some money!

Here’s what he tells us about the company:

Founded by a man named “Michael”, who graduated from Peking University.
Had a first class of only 30 students
Has a “network of 25 schools and 111 learning centers in 24 cities, as well as an online network with two million registered users.”
“helped hundreds of thousands of Chinese students gain admission to U.S. universities by providing prep courses on the TOEFL … and GRE”

And regarding the future potential for this market:

“Chinese students now make up 14% of all foreign students worldwide. And remember, every single one of them must pass the TOEFL test”

Definitely an intriguing tease — though this wasn’t a real hard sell like some of the offers I get, so he didn’t promise that we’d be seeing 200% returns this week or anything.

But there was the ever present “click here” to find out what this company is, and get the other picks of the service.

No thanks — I just want to know that this company is … drum roll, please:

New Oriental (EDU)

That “Michael” who’s the founder and CEO? Michael Minhong Yu.

And on the rest of it, I think Hsu actually undersold the company a little — it’s got a great business and brand in China, as far as I can see, and even with the recent decline in prices for almost all Chinese stocks it’s up from a $15 IPO in September to about $40 today … so if Hsu got you in at the IPO, good on him. There are a few folks over at Seeking Alpha who have written about the company, and it’s definitely gotten a lot of attention in the last six months.

I don’t have any idea what the company’s prospects are — they don’t have much competition at from any big firms that I can se, and it may well be a huge and growing market (if you believe that the Chinese will continue to send their best students out of the country to be educated, and that there will continue to be a huge demand for private English classes in China), but it ain’t cheap.

If you look at somewhat comparable US companies like Apollo (University of Phoenix) or Washington Post (which gets much of its profits from the Kaplan division), its margins fall between those two (better than WPO, worse than APOL), and it trades at a radically higher price/sales margin.

But hey — at least you know who they are.