China Growth Stocks

[2morrowsGains]

SKBI...NICE growth/profit machine...Here's the kicker...

SKBI's new vaccine production plant will add $12M - $14M to the top line next year @ 70% margin. Recent Hubei acquisition will add approx $4-$6M to the top line next year at approx 40% margin. That's approx $10M EXTRA in gross profit next year not counting organic growth or anything else. That's more than Skystar has in gross profit for the first 6 months of this year ($7M) and first 6 month EPS is $0.49.

HUGE Q3 coming up also. SKBI could easily come in w/ $1.80 - $2 EPS for FY2010 and $3++ for FY2011 (based on approx 7.1M shares outstanding). Also, Skystar mentioned that they have enough cash on hand to complete the Jiangsu based micro-organism facility which they already have a deposit on. Micro-organisms = approx 70% profit margin. (The Jiangsu acquisition is projected to be completed in the third quarter of 2010, so we'll see what happens. That's only a couple of weeks away.)

SKBI's Rodman & Renshaw presentation is well worth a listen IMO.

Next year's estimated growth is mind boggling, especially when adding in organic growth and the Jiangsu based micro-organism facility if and when the acquisition is complete.

Current share price = $6.50.