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$$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.
If you grew up in the 70’s there’s no doubt you enjoyed the Star Wars trilogy. One of the stars of the series was the robot C3PO.
Now I wasn’t a C3PO fan. In fact, I hated C3PO. He was wimpy and annoying and all he did was complain. He was a metallic version of Dr. Smith:
The only difference is I liked Dr. Smith a lot better than I liked C3PO. Whether you like it or don’t like it, you had to learn to love it, because Star Wars defined the late 70’s.
Fast forward to the year 2015 and we have new Star Wars movies that I never went to see, nor did I even watch them on cable. Having said that, you have to wonder about what technology has done to advance human medicine. Now we don’t have C3PO in real life, but we do have CBPO.
Today I bought China Biologic Products, Inc. (CBPO) at 68. I will sell it in 4 – 6 weeks at 78.45. Here’s why I like CBPO:
It all starts with the chart:
This stock is up 142% in the last 12 months, yet its forward PE is only 19.6. What a bargain! What a growth stock! Operating margins for this company are 45%. Return on equity is 33%. Return on Assets is 16%. Year on year quarterly earnings growth is 36%. This company is simply off the hook. But what is it??
Their mission: Grow as a world-class biopharmaceutical company focused on saving lives. How cool is that?
China Biologic Products, Inc., a biopharmaceutical company, is engaged in the research, development, manufacture, and sale of human plasma-based biopharmaceutical products to hospitals and inoculation centers. It offers human albumin for the treatment of shock caused by blood loss trauma or burn; raised intracranial pressure caused by hydrocephalus or trauma; oedema or ascites caused by hepatocirrhosis and nephropathy; and neonatal hyperbilirubinemia, as well as for the prevention and treatment of low-density-lipoproteinemia. The company also offers human hepatitis B immunoglobulin for the prevention of measles and contagious hepatitis; human albumin and human immunoglobulin for intravenous injection (IVIG) products for original immunoglobulin deficiency, secondary immunoglobulin deficiency, and auto-immune deficiency diseases; and Thymopolypeptides injection for the treatment of original and secondary T-cell deficiency syndromes, auto-immune deficiency diseases, and a range of cell immunity deficiency diseases, as well as assists in the treatment for tumors. In addition, it provides human rabies immunoglobulin primarily for passive immunity from bites or claws by rabies or other infected animals; human tetanus immunoglobulin for the prevention and therapy of tetanus; placenta polypeptide that is used for the treatment of cell immunity deficiency diseases, viral infection, and leucopenia, as well as assists in postoperative heating; and Human coagulation factor VIII for the treatment of coagulopathie, such as hemophilia A. The company’s products under development comprise human prothrombin complex concentrate; human hepatitis B immunoglobulin (PH4) for intravenous injection; human fibrinogen; Varicella hyperimmune globulins; immune globulin intravenous, Caprylate/Chromatography virus filtration; and human antithrombin III. It distributes its products directly or through distributors. The company is headquartered in Beijing, the People's Republic of China.
CBPO is a blood products company with fully integrated R&D, plasma collection, manufacturing, and distribution. Fractionators required by law to process only self-collected plasma.
Among the first blood products companies in China to sell directly to end-users (hospitals and clinics). With 100+ Sales personnel and products sold directly to 1,000+ hospitals and clinics. Check this out:
· Albumin is the largest product, IVIG just beginning;
· These two were 85% of market in 2012
· 2012 market size of $1.7 billion, but per capita in China but penetration is a fraction of U.S.
· Significant unmet clinical demand provides sustainable and profitable growth
· Growth potential driven by aging population and various diseases
The last bullet is pretty important. At the end of the day, trends are your friend. Especially when it comes to investing. China Biologic Products (CBPO) has seen its sales catapult to 203 million in 2013 from just $4 million in 2002. But here’s the more important trend: China has the largest elderly population in the world -- approximately 126 million people over the age of 65. What's more, China’s elderly population is growing -- dramatically. The China Health and Retirement Longitudinal Study, a biennial Chinese government agency survey, projects that the share of the Chinese population aged 60 and over will increase to 34 percent in 2050 from 12 percent in 2010. The Chinese government is committed to supporting their elderly and improving medical care for same. They aim to provide universal coverage to China’s population of 1.3 billion. This trend has made China into the world’s third largest medicine market, behind only America and Japan. From 2008 to 2013, China’s OTC drugs market reported an average growth of 15%, with the market reaching $20.6bn in 2013 — up from to $11bn in 2008.
· China is the world’s largest albumin market (~40% larger than the U.S. market in 2012), driving the global price
· Albumin is a key driver of Chinese plasma products market, consistent price increase since 2006
· Significant growth of diseases such as hypoalbumiemia from liver cirrhosis and Hepatitis B drives growth of albumin usage in China
· In 2013, imported albumin accounted for 55% of total albumin supply vs. domestic albumin 45%
The plasma industry in China was once dominated by a network of state-owned facilities run by the China National Blood Products Corp., local provincial governments and the Chinese Army. Officials over the last several years have opened the sector to private entrepreneurs. CBPO went public on the NASDAQ in 2009 to raise capital for acquisitions to grow on this business opportunity.
China Biologic took a 90% stake in Guiyang Dalin, another blood products maker, in 2008. It also acquired a 35% stake in another competitor around the same time. These acquisitions made China Biologic the biggest non-state-owned firm in China's plasma industry.
For the 2007-13 period, sales and net profits increased 600%, while operating margins remained above 40%. The most recent earnings report reflects this stellar growth:
Total sales in the third quarter of 2014 increased 29.5% to $68.9 million from $53.2 million in the same quarter of 2013.
Gross profit increased 29.4% to $46.6 million from $36.0 million in the same quarter of 2013. Gross margin was 67.6% in the third quarter of 2014, compared to 67.7% in the third quarter of 2013.
Income from operations increased by 49.1% to $34.6 million from $23.2 million in the same quarter of 2013. Operating margin increased to 50.2% in the third quarter of 2014 from 43.6% in the same quarter of 2013.
Net income attributable to the Company increased by 36.7% to $20.1 million from $14.7 million in the same quarter of 2013. Fully diluted net income per share was $0.76 in the third quarter of 2014 as compared to $0.53 in the same quarter of 2013.
Total sales in the first nine months of 2014 were $185.3 million, an increase of 15.2% from $160.8 million in the same period of 2013. The increase in sales was primarily due to the sales volume increases in IVIG and placenta polypeptide.
The Company is adjusting its previously issued estimates for the full year of 2014 as well as underlying assumptions, and now expects the revenue to increase from $230-$240 million to $240-$245 million, an 18%-20% increase over the prior year, and the non-GAAP adjusted net income to increase from $67-$69 million to $76-$78 million.
There are new products in the pipeline. The Hepatitis B Immunoglobulin for the intravenous injections, then new products expect to launch in the 2015. In 2016 they have three new pipeline products in the early stage they expect will be launched to the market in that year.
So what does this mean for earnings going forward? The ANAL-ysts predict that 2015 revenues will be $284 million yielding earnings of $3.44/share. That’s hilarious. $$$MR. MARKET$$$ knows that revenues will hit $325 million next year, which means that earnings will be $4.18 per share. If you use the existing PE of 26 and multiply it by the earnings projection, you get a share price of:
26 x $4.18 = $108.68
Let’s face it. My price target is going to get obliterated soon. This stock is a no brainer. Let’s hear what the boss, Mr. David (Xiaoying) Gao, has to say:
Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are very pleased to report strong financial results in the third quarter, and to raise our full year financial forecast. Incremental revenue growth and operating margin improvement were largely attributable to increased sales of IVIG and placenta polypeptide products. The successful implementation of our sales strategy allowed us to continue to capitalize on the substantial opportunities in tier-one cities for IVIG products. In anticipation of a favorable market environment and our increased sales capabilities this year, we reserved a large volume of our 2013 IVIG inventories to be sold throughout 2014. Further, added production capacity for placenta polypeptide products allowed us to expand sales volume, while we also managed to reduce selling expenses by utilizing internal resources to promote our placenta polypeptide products."
“China’s plasma-based biopharmaceutical industry is in its infancy stage, and the plasma products market is still under-penetrated,” he said. “Our expertise in the development and commercialization of plasma products has been the key driver for our success. We will continue to leverage our expertise to further solidify our market leadership. Building on our strong research and development position, we are committed to expanding our product portfolio and pipeline to include more technologically advanced, higher-margin products, many of which are used in the United States and other developed markets, but are not currently manufactured in China.”
"Looking to the fourth quarter and into 2015, we remain confident in our sales team's ability to continue to stabilize product pricing. Their performance has already exceeded our estimates set forth at the beginning of this year. Our ability to scale plasma collection and leverage our direct sales model positions us well to meet the rising demand for plasma-based products in China and strengthen our market leadership."
It’s all about collecting the blood. In professional wrestling, they knew this a long time ago. Hide the razor blade under the tape on your wrist. Slice your forehead. Red turns to green
Another winner for $$$MR. MARKET$$$!
I am HUGE!
www.mrmarketishuge.com
$$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be
viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.
If you grew up in the 70’s there’s no doubt you enjoyed the Star Wars trilogy. One of the stars of the series was the robot C3PO.
Now I wasn’t a C3PO fan. In fact, I hated C3PO. He was wimpy and annoying and all he did was complain. He was a metallic version of Dr. Smith:
The only difference is I liked Dr. Smith a lot better than I liked C3PO. Whether you like it or don’t like it, you had to learn to love it, because Star Wars defined the late 70’s.
Fast forward to the year 2015 and we have new Star Wars movies that I never went to see, nor did I even watch them on cable. Having said that, you have to wonder about what technology has done to advance human medicine. Now we don’t have C3PO in real life, but we do have CBPO.
Today I bought China Biologic Products, Inc. (CBPO) at 68. I will sell it in 4 – 6 weeks at 78.45. Here’s why I like CBPO:
It all starts with the chart:
This stock is up 142% in the last 12 months, yet its forward PE is only 19.6. What a bargain! What a growth stock! Operating margins for this company are 45%. Return on equity is 33%. Return on Assets is 16%. Year on year quarterly earnings growth is 36%. This company is simply off the hook. But what is it??
Their mission: Grow as a world-class biopharmaceutical company focused on saving lives. How cool is that?
China Biologic Products, Inc., a biopharmaceutical company, is engaged in the research, development, manufacture, and sale of human plasma-based biopharmaceutical products to hospitals and inoculation centers. It offers human albumin for the treatment of shock caused by blood loss trauma or burn; raised intracranial pressure caused by hydrocephalus or trauma; oedema or ascites caused by hepatocirrhosis and nephropathy; and neonatal hyperbilirubinemia, as well as for the prevention and treatment of low-density-lipoproteinemia. The company also offers human hepatitis B immunoglobulin for the prevention of measles and contagious hepatitis; human albumin and human immunoglobulin for intravenous injection (IVIG) products for original immunoglobulin deficiency, secondary immunoglobulin deficiency, and auto-immune deficiency diseases; and Thymopolypeptides injection for the treatment of original and secondary T-cell deficiency syndromes, auto-immune deficiency diseases, and a range of cell immunity deficiency diseases, as well as assists in the treatment for tumors. In addition, it provides human rabies immunoglobulin primarily for passive immunity from bites or claws by rabies or other infected animals; human tetanus immunoglobulin for the prevention and therapy of tetanus; placenta polypeptide that is used for the treatment of cell immunity deficiency diseases, viral infection, and leucopenia, as well as assists in postoperative heating; and Human coagulation factor VIII for the treatment of coagulopathie, such as hemophilia A. The company’s products under development comprise human prothrombin complex concentrate; human hepatitis B immunoglobulin (PH4) for intravenous injection; human fibrinogen; Varicella hyperimmune globulins; immune globulin intravenous, Caprylate/Chromatography virus filtration; and human antithrombin III. It distributes its products directly or through distributors. The company is headquartered in Beijing, the People's Republic of China.
CBPO is a blood products company with fully integrated R&D, plasma collection, manufacturing, and distribution. Fractionators required by law to process only self-collected plasma.
Among the first blood products companies in China to sell directly to end-users (hospitals and clinics). With 100+ Sales personnel and products sold directly to 1,000+ hospitals and clinics. Check this out:
· Albumin is the largest product, IVIG just beginning;
· These two were 85% of market in 2012
· 2012 market size of $1.7 billion, but per capita in China but penetration is a fraction of U.S.
· Significant unmet clinical demand provides sustainable and profitable growth
· Growth potential driven by aging population and various diseases
The last bullet is pretty important. At the end of the day, trends are your friend. Especially when it comes to investing. China Biologic Products (CBPO) has seen its sales catapult to 203 million in 2013 from just $4 million in 2002. But here’s the more important trend: China has the largest elderly population in the world -- approximately 126 million people over the age of 65. What's more, China’s elderly population is growing -- dramatically. The China Health and Retirement Longitudinal Study, a biennial Chinese government agency survey, projects that the share of the Chinese population aged 60 and over will increase to 34 percent in 2050 from 12 percent in 2010. The Chinese government is committed to supporting their elderly and improving medical care for same. They aim to provide universal coverage to China’s population of 1.3 billion. This trend has made China into the world’s third largest medicine market, behind only America and Japan. From 2008 to 2013, China’s OTC drugs market reported an average growth of 15%, with the market reaching $20.6bn in 2013 — up from to $11bn in 2008.
· China is the world’s largest albumin market (~40% larger than the U.S. market in 2012), driving the global price
· Albumin is a key driver of Chinese plasma products market, consistent price increase since 2006
· Significant growth of diseases such as hypoalbumiemia from liver cirrhosis and Hepatitis B drives growth of albumin usage in China
· In 2013, imported albumin accounted for 55% of total albumin supply vs. domestic albumin 45%
The plasma industry in China was once dominated by a network of state-owned facilities run by the China National Blood Products Corp., local provincial governments and the Chinese Army. Officials over the last several years have opened the sector to private entrepreneurs. CBPO went public on the NASDAQ in 2009 to raise capital for acquisitions to grow on this business opportunity.
China Biologic took a 90% stake in Guiyang Dalin, another blood products maker, in 2008. It also acquired a 35% stake in another competitor around the same time. These acquisitions made China Biologic the biggest non-state-owned firm in China's plasma industry.
For the 2007-13 period, sales and net profits increased 600%, while operating margins remained above 40%. The most recent earnings report reflects this stellar growth:
Total sales in the third quarter of 2014 increased 29.5% to $68.9 million from $53.2 million in the same quarter of 2013.
Gross profit increased 29.4% to $46.6 million from $36.0 million in the same quarter of 2013. Gross margin was 67.6% in the third quarter of 2014, compared to 67.7% in the third quarter of 2013.
Income from operations increased by 49.1% to $34.6 million from $23.2 million in the same quarter of 2013. Operating margin increased to 50.2% in the third quarter of 2014 from 43.6% in the same quarter of 2013.
Net income attributable to the Company increased by 36.7% to $20.1 million from $14.7 million in the same quarter of 2013. Fully diluted net income per share was $0.76 in the third quarter of 2014 as compared to $0.53 in the same quarter of 2013.
Total sales in the first nine months of 2014 were $185.3 million, an increase of 15.2% from $160.8 million in the same period of 2013. The increase in sales was primarily due to the sales volume increases in IVIG and placenta polypeptide.
The Company is adjusting its previously issued estimates for the full year of 2014 as well as underlying assumptions, and now expects the revenue to increase from $230-$240 million to $240-$245 million, an 18%-20% increase over the prior year, and the non-GAAP adjusted net income to increase from $67-$69 million to $76-$78 million.
There are new products in the pipeline. The Hepatitis B Immunoglobulin for the intravenous injections, then new products expect to launch in the 2015. In 2016 they have three new pipeline products in the early stage they expect will be launched to the market in that year.
So what does this mean for earnings going forward? The ANAL-ysts predict that 2015 revenues will be $284 million yielding earnings of $3.44/share. That’s hilarious. $$$MR. MARKET$$$ knows that revenues will hit $325 million next year, which means that earnings will be $4.18 per share. If you use the existing PE of 26 and multiply it by the earnings projection, you get a share price of:
26 x $4.18 = $108.68
Let’s face it. My price target is going to get obliterated soon. This stock is a no brainer. Let’s hear what the boss, Mr. David (Xiaoying) Gao, has to say:
Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are very pleased to report strong financial results in the third quarter, and to raise our full year financial forecast. Incremental revenue growth and operating margin improvement were largely attributable to increased sales of IVIG and placenta polypeptide products. The successful implementation of our sales strategy allowed us to continue to capitalize on the substantial opportunities in tier-one cities for IVIG products. In anticipation of a favorable market environment and our increased sales capabilities this year, we reserved a large volume of our 2013 IVIG inventories to be sold throughout 2014. Further, added production capacity for placenta polypeptide products allowed us to expand sales volume, while we also managed to reduce selling expenses by utilizing internal resources to promote our placenta polypeptide products."
“China’s plasma-based biopharmaceutical industry is in its infancy stage, and the plasma products market is still under-penetrated,” he said. “Our expertise in the development and commercialization of plasma products has been the key driver for our success. We will continue to leverage our expertise to further solidify our market leadership. Building on our strong research and development position, we are committed to expanding our product portfolio and pipeline to include more technologically advanced, higher-margin products, many of which are used in the United States and other developed markets, but are not currently manufactured in China.”
"Looking to the fourth quarter and into 2015, we remain confident in our sales team's ability to continue to stabilize product pricing. Their performance has already exceeded our estimates set forth at the beginning of this year. Our ability to scale plasma collection and leverage our direct sales model positions us well to meet the rising demand for plasma-based products in China and strengthen our market leadership."
It’s all about collecting the blood. In professional wrestling, they knew this a long time ago. Hide the razor blade under the tape on your wrist. Slice your forehead. Red turns to green
Another winner for $$$MR. MARKET$$$!
I am HUGE!
www.mrmarketishuge.com
$$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be
viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.
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