As the number of middle class workers in China continues to surge, some interesting trends are emerging, according to analysts and economists the world over. With more than 300 million Chinese considered "middle class," defined by their standards as individual annual incomes between USD $30,000 and $60,000 (according to the Bullworthy Equity Research Report for Ziyang), many are enjoying the pleasures of owning new homes, cars, and the material possessions and styles Western popular culture espouses.

One small, publicly-traded company is capitalizing on that trend - Ziyang Ceramics Corporation (OTCPK:ZYCI) - by making trendy porcelain wall and floor tiles for Chinese homes. Just like their American counterparts, for the Chinese, the financial ability and wherewithal to purchase and own a home is the equivalent of a milestone in reaching the middle class. In fact, home ownership rates in China have skyrocketed over the last decade, and that has sparked speculation of a massive real estate bubble in major cities and industrial hubs of the mainland. Don't think for a second that companies of all industries have ignored these trends. Major corporations like Wal-Mart (NYSE:WMT) and Starbucks (NASDAQ:SBUX) have positioned themselves in these countries as established brands, attracting the younger, style-centric demographics of the growing middle class with disposable income and an appetite for all things premium.

As much a staple as home ownership is becoming for the middle class in China, so too is home décor. The popularity of massive trade fairs like Beijing's Home, Fashion and Design [HFD] Expo suggest that middle class consumers are fashion-forward and hungry for the latest home design trends. For centuries, porcelain tiles have been to decorate the homes and palaces of the ultra-wealthy. But improvements in industrial technology and production have brought the costs to produce porcelain tiles down, while at the same time enhancing quality and aesthetics.

Ziyang's finished products are stain and wear-resistant, antibacterial and environmentally friendly, coming in three different product finishes that include patterned, polished, or polycrystalline (each with separate pricing levels) for consumers to choose from. They can also meet demand. The company has an annual total production capacity of approximately 200 million square feet of their porcelain tiles in more than 50 different size and color combinations. They sell the tiling direct-to-consumer.

Ziyang Ceramics is well positioned to benefit from the combination of a subsidized, country-wide construction spree, an exploding middle class with discretionary income and an appetite for stylish home décor, a superior and premium product quality, and the advanced production and supply chain they have invested so heavily in. And about that speculative real estate bubble in China: the buzz these days is all about stimulus. Should a bubble pop, which I recognize is a very real possibility, Ziyang owns mineral resources that provide low cost access to raw materials, helping to keep margins intact. They could also thrive in a down market by selling low-cost tiling to homeowners in the home refurbishing market.

The stock trades at just 1.33 times earnings for the first quarter of 2012, during which the company clocked a staggering 82% increase in revenues,and a 63% increase in profits. Those numbers were in aggregate USD $11.4 million, and USD $4.1 million, respectively. In the last trading session, the stock moved from $2.10 to $3.10 on volume of more than 36,500, compared to an average 3-month volume of about 450. Today the stock is up again $.99 to trade at $4.10, or about 32%. Earlier this week, Bullworthy, LLC. produced and distributed a detail equity research report on the company, with analysts pegging a $9.25 target price over the next 12 months on the small cap, and it looks like retail investors are starting to take note.