By Joseph Chaney and Samuel Shen - Analysis
HONG KONG/SHANGHAI (Reuters) - The "Made in China" label has been tarnished by scandals from tainted toothpaste to toxic toys, but China's top brands are building a name for quality among the country's increasingly well-heeled consumers.
China's leading homegrown consumer companies are also providing investors long-term value, analysts say, as China's crowded consumer goods sector consolidates.
But their shares aren't cheap, with leading dairy firm China Mengniu Dairy (2319.HK: Quote, Profile, Research, Stock Buzz) trading at more than 41 times forecast earnings.
Still, analysts on average rate the stock "outperform", according to Reuters Estimates. Mengniu's shares have more than doubled over the past 12 months.
"China is creating a lot of demand in terms of eating, wearing, dwelling and traveling," said Ji Yue, director of private equity firm Sequoia Capital China.
"A good investment goes to leading companies that provide badly needed products and services in a market that has huge potential to grow."
Annual economic growth of more than 10 percent has created 345,000 Chinese millionaires as of the end of last year. And urban disposable incomes have risen 87 percent since 2000, to 11,759 yuan (US$1,559) per person last year.
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