China-Biotics, Inc. (CHBT)

[viking86]

from Wefe's blog:



Re. Q3 earnings:

Earnings are now only 18 or fewer trading days away.

- I am not expecting this to be a blow-out quarter with respect to expectations because bulk was not projected to ramp up significantly and Q2 is seasonally slower on the retail side.

- However, sentiment had gotten so negative across this space, and for CHBT in particular, that I think the bar has been set pretty low. Sales will still be up around 50%, net income and EPS will be up. Just the fact that it is 'business as usual' and the CEO and CFO didn't suddenly disappear as the shorts like to remind you happened at some other China small cap could be enough to restore some confidence.

- Someone correct me if I am wrong, but I believe with CHBT's share price below $12 on the last day of the quarter the 2.1 million Pope convertible shares will not be included in the fully diluted share count as their effect would be anti-dilutive. So reported fully diluted EPS will be a few cents higher than it otherwise would have been.

- The quarter we are currently in (December quarter) should be good with seasonally stronger retail sales and Phase I bulk sales guided to be at a 100 ton/yr run rate by end of the calendar year. Management has also guided to Phase I being at 125 ton run rate by end of the March quarter, and in June quarter Phase II is supposed to kick in. If management reaffirms those projections it should be good for the stock.