Replies to post #2628 on China Kangtai Cactus Bio-Tech Inc (fka CKGT)

[StevenRisk]

This is why I think CKGT.OB is an absolute steal. Read Business Outlook.

China Kangtai Cactus
Shares Outstanding (MRQ): 21.24 mill
New Shares / Dilution (TTM): 1.54 mill 7.80%
Cash (MRQ): 0.55 mill 3.01%
Account Receivables (MRQ): 6.41 mill 35.12%
Account Receivables (Q/Q): + 1.66 mill 34.92%
Long-Term Debt (MRQ): 0.05 mill 0.28%
Revenue Growth (Q/Q): 9.04%
Revenue Growth (Y/Y): 16.31%
Net Income Growth (Q/Q): 47.09%
Net Income Growth (Y/Y): -8.94%
EPS Growth (Y/Y): -15.53%
Net Margin (Q/Q): 24.2% (17.9%) 6.30%
Net Margin (Y/Y): 24.2% (30.9%) -6.70%
EPS | P/E (2 MRQ Projection): $0.36 2.36
CFPS | P/CF (2 MRQ Projection): $0.22 3.89
Price/Sales (2 MRQ Projection): 0.50
Price/Book (MRQ): 0.46
Auditor: Michael T. Studer CPA

Forward Projections (Fiscal Year)
EPS | P/E (Estimates updated 2010-10-31): $0.25 3.44
Basic Facts and History (show more)
Reporting Type: U.S. Company (10-K Filings)
Going Public: Reverse Merger on 2005-05-13

Business Outlook
In China, cigarette manufacturing is a government monopoly, which designates only one cigarette brand for each province. We are now the first publicly held company to sign a joint manufacturing agreement with a government-owned cigarette manufacturer. This will enable us to make important progress in growing market share for our products and further enhances our revenue growth potential. This agreement creates mutual benefit for both companies. The low-nicotine and non-nicotine cactus cigarette product coincides with the government's initial step to promote less harmful products to the huge smoking population in China. It is estimated that more than 300 million people in China are regular smokers. Furthermore, we plan to export "Tai Shan Sheng Chao" cigarettes to Russia, South Korea and Japan through our established sales channels. We are confident that cactus-based cigarettes have a promising future to broaden shareholder value for both companies in a long term.

(Source: Business Wire, 2010-12-15)

The last line is clear "we are confident that cactus-based cigarettes have a promising future to broaden shareholder value for both companies in a long term"

Doesn't this register with anyone besides me? Broaden shareholder value for both companies. Sheesh, to broaden CKGT.OB would be an expectation as it is so small. But here we have a government owned cig manufacturer stating what? Remember they are going from 80 brands to 20 brands in China within 5 years. IMO, this puts CKGT.OB squarely in the middle. It's no wonder they have put all energies squarely in cigs.

[Florinda]

Hi Steven,

I'm not looking for any news on this sucker till earnings. I of course would appreciate it if it comes, but I'm not at all anticipating it. I've got a stink bid on-the-ready in case someone dumps a bunch of shares and it dips back down to .80 like it did last week. It's a warped "comfort", but at least CKGT isn't alone in its dismal share price action.

I don't have time to read much macro stuff, but I was on some Ihub board the other day and heard for the first time some guys saying that they thought China stocks might come back in favor in the second half of the year. Their reasoning was that the Chinese government should be done raising their rates (I'm not sure if this was the term they used) but whatever they're raising to help keep inflation in check. Probably everyone and their uncle knows about it, but it was news to me, and welcome news at that. Sooner or later this sector will come back in favor and these abandoned companies will rise up again.

It does seem as though CKGT is apt to have a better share price increase than most (in 2011) given where the stock price is and what they've apparently got coming down the pike this year. But at this point I share Traderfan's skepticism, that is, until earnings come out, even if they have a bang up quarter--as apparently they're going to have--we don't know what kind of expenses they will have incurred to achieve those gains. As such, just as LPH's share price dropped with good numbers because they told investors they were going to dilute more, there may be something in CKGT's earnings that convinces investors that they're going to have to wait another quarter or two before things start firing on all cylinders. My hunch is that is not going to be the case with CKGT. But management has got to regain a bunch of lost trust. And I doubt they can accomplish that in just one earnings report. In any event, I don't like setting myself for disappointment and will just wait to see what we get served up without thinking too much about in the mean time.

Steve