China Biologic Products, Inc. (CBPO) recently reported record revenue for the fourth quarter and 2009. The stock is cheap, trading at just 7.8x forward earnings.
Company Description
China Biologic Products, Inc. (CBPO) is a plasma-based biopharmaceutical company.
It has an indirect majority-owned subsidiary, Shandong Taibang, and equity investments in Xi’an Huitian and Chongqing Dalin. The company produces and manufactures plasma products.
China Biologic Had Record Fourth Quarter
On Mar 23, China Biologic reported its fourth quarter results and easily surprised on the Zacks Consensus Estimate by 91%. Earnings per share were 44 cents compared to the consensus of 23 cents.
This is the first earnings beat for the company. Analysts only just started covering the company as it was first listed on the NASDAQ during 2009.
Revenue rose 185.6% to $37.6 million. This gain included Dalin’s sales, of which the company closed on its 90% acquisition of that company during 2009.
“In addition, we believe that the successful implementation of the Company’s strategic marketing efforts has attracted more donors to our plasma collection centers and has resulted in an increase in our overall collection volume,” said Mr. Chao Ming Zhao, Chief Executive Officer.
“With a continued shortage of plasma supply, the Company has continued to work to enhance our production plans and increase our output and we have been able to maximize our yield per unit of plasma collected to realize a higher profit margin,” he added.
Full year revenue of $119 million exceeded the company’s guidance between $90 and $100 million.
2010 Outlook
China Biologic only provides guidance one time, at the beginning of the year, and then will not update the guidance throughout the year.
2010 revenue is expected to be in the range of $142 to $149 million, which is well above the $119 million record revenue in 2009.
2010 Zacks Consensus Estimate Rises
There are 2 estimates for 2010 and both moved higher in the last 30 days.
The 2010 Zacks Consensus rose 19% to $1.38 from $1.16 per share during that time.
Value Fundamentals
China Biologic has a price-to-book ratio of 2.9, which is under the industry average of 4.2 and within the value parameters. The company has an outstanding trailing 1-year return on equity (ROE) of 36.6%. This easily surpasses the industry average which is negative 119.7%.
China Biologic is a Zacks #1 Rank (strong buy) stock.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
