Just a year after going bust, GM (NYSE: GM) showed it can get its groove back. Its IPO was impressive, with a large increase in the price range as well as the number of shares issued. [Read: “GM’s Back — And So Are These Key Suppliers”.]

While GM has the advantage of a streamlined operating structure, the company is also getting a nice lift from growth in China. But in light of the competition, there are some lingering concerns that the company will fall back on bad habits.

The good news is that investors have some other ways to participate in the growth of the Chinese auto market. For example, there are several online operators that will likely post substantial growth for some time. In fact, in the midst of all the attention on GM’s IPO this week, one of them went public this week.

But first, let’s take a look at the key auto trends in China. All in all, the growth in Internet usage continues at a rapid pace. There are currently 384 million Internet users, up from 110 million in 2005. By 2013, the number is projected to reach a staggering 664 million (according to iResearch).

What’s more, China is the world’s largest auto market, as the country sees gains in income and economic growth. It also helps that there have been significant investments in roadway infrastructure. For 2010, China is expected to post 17.0 million auto sales. But this is forecasted to reach 21.3 million by 2013 (from a report by J.D. Power).

Finally, the Internet is the primary way for Chinese people to research a purchase decision for a car. Just last year, Chinese auto sites attracted 140 million unique users, up from 29 million in 2005. [These three factors make up what Market Advisor editor Nathan Slaughter calls “catalysts ” — overriding trends that power stocks to huge gains.]

OK, so who is the top online operator? It’s a company called Bitauto (Nasdaq: BITA). The company issued 10.6 million shares on the Nasdaq exchange for $12 a piece on Wednesday.

Bitauto operates two main sites, bitauto.com and ucar.cn. They provide extensive details, specifications and consumer reviews on new and used cars. There are also content distribution agreements with 63 third-party sites like Tencent, Yahoo China and Tom Online.

As for making money, Bitauto relies on a variety of revenue streams. These include subscriptions from auto dealers, advertising fees and listing fees. There are also high-end digital marketing services and public relations.

And yes, Bitauto has been growing at a torrid rate. For the past nine months, the company posted $44.7 million in revenue, up +53% compared with the past year. While the company generated a $5.1 million operating profit during this period, there was still an overall loss because of the change in value of its convertible bond. Yet this is more of a technical matter, and besides, the IPO proceeds will help provide a more stable base of financing.

Action to Take –> Bitauto definitely has some risk factors. Looking at the prospectus, the company has 41 million shares outstanding at about $12 each. That puts the market cap at $492 million. Assuming the company generates $6 million in operating income this year (which seems reasonable), the forward multiple would be 82. Then again, this is typical for a Chinese IPO.

At the same time, there are signs that the Chinese economy is slowing down. The prime reason is that the government is taking actions to reduce inflation. In other words, the result could be a slowdown in auto sales.

But for investors looking to capitalize on the Chinese auto market, Bitauto is definitely an attractive play. The company should continue to grow at a strong rate and remain the dominant player in the space. And as seen with other Chinese dot-com players like Baidu (Nasdaq: BIDU), the category leaders often continue to bolster their positions over time as well as their valuations. Thus, a +20% to +30% move should be reasonable target for Bitauto’s stock price in the next six months.

P.S. — Any analyst can tell you they like a stock. But how many are willing to put their money where their mouth is? StreetAuthority Market Advisor is so confident in Nathan Slaughter’s picks that we gave him $100,000 in cash to put into his recommendations. Learn how you can join in and profit along with him.