Asia is still about growth and investment strategies focused on this theme will continue to deliver robust returns for stock investors next year, JPMorgan said on Thursday.

Stocks in the Asia Pacific region, excluding Japan, looked set to post their fifth straight year of gains and while many markets have become expensive, there is scope for them to become even more so, supported by solid earnings growth.

Focus on earnings momentum, don't get too concerned about valuations. Don't use valuations as a trigger to sell, use concerns about earnings as a trigger to sell, regional strategist Adrian Mowat told a media briefing in Hong Kong.

I do think valuations will get more extended because of what's occuring with monetary policy, what's occuring with the desire to buy growth, and ... the reflation story.

Among the sectors, JPMorgan likes Chinese and Indian autos due to strong demand growth and is recommending Minth Group Ltd, Great Wall Motor Co Ltd, Bajaj Auto Ltd and Hyundai Motor Co.

The region's strong economies also bode well for conglomerates such as Swire Pacific Ltd, Bakrie & Brothers Tbk PT and Macau plays including Shun Tak Holdings Ltd.

JPMorgan expects Asia's booming economies will continue to grow steadily in 2008 and believes a soft U.S landing coupled with low interest rates in developed nations will be highly favourable for financial assets in the region.

Asian stocks excluding Japan as measured by MSCI's index have risen nearly 40 percent so far this year, more than triple the gains for global stocks.

It trades at 17 times forward earnings, well above the long-term average of 12.8 times. This compares with 14 times for global stocks, 14.7 times for Japan and the United States and 12.4 times for Europe.

As we enter the sixth year of an Asian equity bull market the risk is now high valuations; this region is more expensive on a forward PE than all other regions including Japan, JPMorgan analysts said in their 2008 outlook report.

Our advice is to continue to pay up for growth. It is premium growth that attracts investors to emerging markets. This trend is increasing as local savers increase their exposure to equities.

Some of the risks facing Asian stocks include a hard landing for the U.S. economy and weaker European growth, slowing earnings momentum, a sharp correction for China's mainland stock market, and Indian equities. (Reporting by Ian Chua; Editing by Anne Marie Roantree)