China Growth Stocks

[Brennus]

Let's see...if broiler prices in 2010 hold steady to 3q09 as management hinted, that's RMB 2.85/broiler, or about 42 cents. That's about 62.5MM revenue from broilers. Probably another 0.5MM from egg sales and 1.8MM from sales of retired breeders. So full year 2010 revenue just a shade less than 65MM.

Assume net margin stays at historic rates of about 30%...That means 19.5MM net income. There are about 15.7MM shares out, but lets round that up to 16MM. So $1.21/share 2010 earnings.

At a multiple of 8x that means $9.70/share. Even at a ridiculously low multiple like that, we're due another 25% to 30% on the stock price from here. If nominal food price inflation returns to China in 2010, or YUII achieves a fair market multiple, we could really see some fireworks.