Shengtai Pharmaceutical (fka SGTI)

[BiotechValues]

Hi steeledge.

yes, it's a concern.

They are highly leveraged with short term bank loans. Current ratio 0.5

They have almost no long term debt however, and so far they have managed to pay the short term bank loans with cash flow from operations and occasional approval from the banks to extend/renew the loans based on their hard assets.

That said, the highly leveraged place they're in is the price for their 100% expansion of capacity.

I guess I'd rather see them continue with a crappy balance sheet for another quarter or two and clean it up with cash flow operations than the alternative (dilution).