Yongye Biotechnology International, Inc. (YONG)

[pnnymn]

CEO Wu's interview with China's Business Watch magazine in early December:
http://finance.ifeng.com/news/corporate/...

numbers in perspective

short term:The street predicts a profit of 0.01 for Q4 2009, we know from the CEO interview that they're having very brisk sales this winter, so it's safe to assume the number will be met.

long term:
Again, referring to the interview,
“???,??????????????,??????????????”????????????????«????»??,“??????????????????????????”???????????????,?2009?10?,??????????2010—2012?????,???????, ??3???????????50%????
CEO Wu made it very clear that achieving Q3's result (ie. 60% increase in rev growth, 77% increase in gross profit over same period 2008) wasn't really a great feat considering the enormous potential in Chinese agriculture market. And the company's 2010-2012 3-year growth plan explicitly projects *minimum* 50% year-to-year growth. Let's do the math: 150% for 3 years = 150%^3 = 337%, given this year's non-GAPP income should be at least 0.77, YONG will likely earn $2.59+ non-gapp income 3 years from now. With YONG's high margins, growth rate, and $2.59 non-gapp income, a stock price of $30+ is almost a given. If for some reason, YONG’s margins deteriorate during revenue growth, a $20 stock price is still very realistic.


There are some understandable grumblings about the dilutive equity sales, but now with nearly 60M USD or 400M RMB in YONG's coffer, expansion is no longer a pie in the sky. Also note-worthy is the very high percentage of insider ownership and zero insider stock sales, it should be apparent to all that shareholders' interest and management interest do align as far as minimal dilution and stock price appreciation are concerned.

Short-term-wise, China's stock market is going through a little adjustment in light of government's intervention to prevent a real-estate bubble, hence the apprehension with Chinese ADR in the last few days in general. But long term, one really has to be a fool not to see YONG's potential in the enormous Chinese agribusiness market.