With millions of students and only about 5% of graduates admitted into universities, China has been keenly focused on adult and online education initiatives to keep its citizens competitive. As a result, companies like China Education Alliance, Inc. (NYSE:CEU), Chinacast Education Corporation (NASDAQ:CAST) and New Oriental Education & Technology Group Inc. (NYSE:EDU) have realized significant revenue growth and profits.

Companies like China Education Alliance, Inc. have reported record profits over the past several years. Today, the firm announced revenues that increased 5.1% to $8,617,734 during the first quarter of 2010. The jump was attributed to an 8.3% gain in its online education division and a 12.2% gain from its training center, but the stock continues to trade at a very cheap 8x trailing 12-month earnings multiple.

Similar increases were seen by other companies in the sector, such as New Oriental Education & Technology Group, Inc. which saw a 33% increase in its net income as more students signed up for its language training and test prep courses. Meanwhile, revenues at the company climbed more than 35% to $89.2 million, but the stock remains one of the most expensive in the sector, trading at nearly 50x its trailing 12-month earnings.

Chinacast Education Corporation  is more reasonably priced at about 20x trailing 12-month earnings, but remains about twice as expensive as CEU. In April, the firm reported first quarter revenues that increased 42% to $15.9 million and net income that jumped 58% to $4.6 million as its gross margins expanded. Meanwhile, the company continues to pursue strategic growth initiatives largely through acquisitions, like that of Hubei in recent months.

Other emerging companies are also taking advantage of the trend by bringing their companies into the global marketplace. Global Education & Technology Group announced plans for a $100 million initial public offering on the Nasdaq by the end of the year, while companies that are already listed haven��t experienced many drawbacks when conducting secondary offerings, despite the potential dilutive effects to shareholders.

Since many of these stocks have fallen alongside the Shanghai Composite, some of them are available at bargain prices for investors, given their continued growth. As a result, this is a sector for investors to watch very closely over the coming months��