China BioPharma Corp (fka CHBO)

[sweet crude]

Ludlow China Target = $1.30

Ludlow China Upgrades CBPC Rating to B, Maintains $1.30 Price Target

VALUATION PRICE TARGET OF $1.31

CBPC is projecting $10 million in sales for fiscal year 2006, and with only 84 million shares issued and outstanding we feel CBPC should have a fair market cap value of at least $110 million. This valuation is based on a price/sales ratio of 11, similar to Sinovac (SVA), which is the closest business model and sector of the above companies.

$10 million (revenue) x 11 (price to sales) = $110 million market cap

($110 million market cap / 84 million shares outstanding = $1.30 a share)

CBPC recent break through its 200 day moving average, projecting $10 million in vaccine sales, $1.5 million in net income, and sector price to sales ratio comparison of 11, has made CBPC an attractive biotech play within the Influenza sector. Based on this information, Ludlow China is upgrading CBPC rating to B, and maintaining its valuation target of $1.30 a share based on projected $10 million in vaccine sales.

* Ludlow China began coverage on China BioPharma (CBPC) on March 21, 2006 at a price of $0.50 a share. See disclaimer below.

http://www.theasianinvestor.com/reports/cbpc.htm


Nice. If you read that report you see that most other flu stocks traded at like 11 to 100 times sales. If CBPC is projecting $10 million in vaccine sales that means at just say 10 times sales CBPC should be trading with a market cap of $100 million market cap. With 84 million shares out....well, you do the math.

Market cap now is $42 million