China Kangtai Cactus Bio-Tech Inc (fka CKGT)

[Traderfan]

Steven regarding the land property

Shoot. You are right. I completely overlooked this in the 10k and it seems everybody else did as well up until now. They recorded this stuff in Q4 already. That's a real bummer. Now I know why the margins were so high in Q4 and why my estimates were too low. They only did your 16 cents EPS in Q4 because they reported higher revenues than in the guidance and because of these additional 2.5 cents property gain. Otherwise they would have been right on my 12-13 cents guestimate.

The issue is they did PR this in the new year but they booked it in Q4 already it seems. That said we now had 2.5 cents in additional EPS in Q3 and the same in Q4 so we actually only did 38 cents EPS in 2009 without these one time items. This will also mean that if they don't have any one time gains in 2010 they won't have an easy yoy comparison when it comes to net income.

That would also mean that they only grew by around 31% in net income 2009 over 2008. That means they had net margin of about 31% and 33% in Q3/Q4. If we go from here with a net margin of 35% (already higher than in 2009) and their guidance of 35 million we are getting to about 12.25 million in net income for 2010 and about 50-55 cents in EPS. Depends on the number of shares at the end of the year. So even if we take 55 cents in EPS for 2010 this will be less than 30% growth in income.

I hope they have guided conservatively.