China BCT Pharmacy Group, Inc. (CNBI)

[Smm70]

Coverage - I noticed this had not been posted here. Pretty good commentary by Harbinger Research and initiated coverage. Good things ahead, even though this puppy has seen no love after the stellar ER and FY forecast. $6.70 12-month target


http://www.harbingerresearch.com/data/CNBI%20Harbinger%20Research%20Report%20May%2011%202010_57.pdf

China Baicaotang Medicine (CNBI – OTC:BB)
Compelling Valuation and Solid Growth. Vertically-
Integrated Pharma Co. Trades at Just 4.9x our 2010 EPS
Estimate. Low Downside Risk and Strong Upside Potential.
Strong
Buy

Conclusion
China Baicaotang is already a successful, well-established pharmaceutical manufacturer, wholesaler, and retailer
in the Guangxi province of China. The Company has recently gained access to significant growth capital, and is
expected to gain even more in the near future, allowing it to invest in next-generation infrastructure and more
aggressive expansion across all of its business lines. We believe that as this process progresses, the Company
will strengthen its competitive advantages in the Guangxi markets, and will likely experience rising gross and
net margins. This will almost certainly lead to multiple expansion from current “fair value” levels of 10x – 15x
forward earnings, and the Company currently trades at just 4.9x our 2010 EPS estimate of $0.67. Therefore we
rate the shares of CNBI a Strong Buy, and set our 12-month price target at $6.70 per share.