China Growth Stocks

[viking86]

BSPM: the 15.9m make good target for 2009 is for Inc. From Operation, not Net Income. Assuming nothing else but tax=26% b/w those incomes, the NI make good target for 2009 would be= 15.9x0.74=11.8m, an easy hurdle.

My 3Q rev. estimate is assumed equal to 2Q rev of 13.2m plus some additional rev. due to the retail outlets during 3Q, which is estimated at 1m. This is based on the recent PR stating a total YTD of 7.4m for their 3512 retail outlets as of Oct 30. So my 3Q rev estimate is = 13.2+1= 14.2m . Assuming Net Margin= 25%, net income for 3Q= 3.55m. Based on O/S=26.1m shares including the newest financing shares, eps for 3Q= 0.136.

Using a similar conservative approach for 4Q, I get 4Q eps= 0.15 which basically discounts all additional income from new drugs and sales increases from existing drugs. The goal is to see whether the conservative Net Income estimate would clear the Make Good target stated above. For the year I get an estimate of Net Income = 13.1m (vs. the required 11.8m) and an eps of 0.53. This could prove to be too low but I'd rather err on the low side. Hope this helps.