China-Biotics, Inc. (CHBT)

[viking86]

Thanks Wefe for sharing your invaluable research ! Great work.

Here are a few points of most interest for me that lead to my revised estimate of Q1 earnings.

I know, E/R is just a week away but this estimate will give me a base for some longer term projections that will be updated as we get ongoing quarterly reports. Plus it will give us some more excitement as we watch things unfolding in the next 1-2 weeks, esp. how shorts react as the SQUEEZE intensifies from day to day IF even just 80% of the predictions comes true!! Remember: the currently very high short interest of 30% (over 3M shares short on a small float of 11.1M) plus the ongoing share buyback should provide plenty of fuel for shareprice apreciation. As Burpp pointed out, this stock is not CCME which is totally at the mercy of shorts b/c this Mgmt has a better handle on shorts with the buyback program.

Here are ASP and production data (ASP=Average Selling Price in $/kg, production in mt= metric ton) compiled by Wefe for 2010 that are the building blocks for earnings going forward:

FY2010 Q1.. Q2.. Q3.. Q4.. Q1/11 (my estimate)
bulk $ 3600 5500 5900 1133 1133= Q4 ASP
retail 5130 5086 6960 7480 6164= FY10-avg ASP

bulk.. 1... 1... 1... 6... 15
retail 2.30 2.30 2.50 2.50 3

(Q4/10 ends Mar 31, 2010, Q1/11 ends June 30, 2010)

NOte: there has been some discussions over the past few days about what ASP to use for bulk sales going forward considering the large variances b/w Company's initially suggested ASP of $733/kg and more recent quarterly data indicating bulk ASP up to $6,000/kg. For the sake of being conservative, I have decided to use a bulk ASP of 1,133/kg based on Q4 and a retail ASP of 6,164/kg based on the average ASP of FY 2010. The production estimate for Q1/11 is more straightforward as we got an update PR on July 7 on how Q1 fared.

Based on a fully diluted share count of 22.37M and the above estimates, I am seeing eps = 0.52E for Q1/11 and a trailing ttm eps = 1.52E non-GAAP. This compares to Wefe's estimates of 0.39 and 1.38 using a FD= 24.5MM.

I will leave it to you to figure out what SP to expect in the short term. fwiw


Some links:
http://finance.yahoo.com/news/ChinaBiotics-Provides-Further-prnews-2214908818.html?x=0&.v=95

http://seekingalpha.com/article/217093-china-biotics-an-exciting-transformation-has-arrived?source=yahoo