China Tracker - Details for Biostar Pharmaceuticals (BSPM)

 Biostar Pharmaceuticals
Shares Outstanding (MRQ): 9.40 mill
New Shares / Dilution (TTM): 0.14 mill1.50%
Cash (MRQ): 18.71 mill114.39%
Account Receivables (MRQ): 23.58 mill144.18%
Account Receivables (Q/Q): -10.89 mill-31.59%
Long-Term Debt (MRQ): NO DEBT
Revenue Growth (Q/Q): -48.68% 
Revenue Growth (Y/Y): -68.51%
Net Income Growth (Q/Q): -172.81% 
Net Income Growth (Y/Y): -138.00%
EPS Growth (Y/Y): -137.44%
Net Margin (Q/Q): -19.3% (13.6%)-33.00% 
Net Margin (Y/Y): -19.3% (16.0%)-35.40% 
EPS | P/E (2 MRQ Projection): $0.1313.88
CFPS | P/CF (2 MRQ Projection): $0.583.00
Price/Sales (2 MRQ Projection): 0.34
Price/Book (MRQ): 0.24
Auditor: Mazars CPA 
 
 Forward Projections (Fiscal Year)
EPS | P/E (Estimates updated 2012-10-07): $0.354.97
 Basic Facts and History (show more)
Reporting Type: U.S. Company (10-K Filings) 
Going Public: Direct Offering on 2007-11-01 
Uplisting to Senior Exchange: on 2010-04-23 at $14.04 (-87.61% since Uplisting)

 Business Outlook

The Company is reiterating its fiscal 2011 full year net sales guidance of 20-25% growth and aims to further penetrate in rural area by establishing 3,000 additional rural sales outlets and take total number of rural sales outlets to 13,000 from 10,000 last year.

(Source: PR Newswire, 2011-08-15)

We are optimistic about 2011 and the ability to sell through all of our products through a robust distribution channel and rural sales network. We are confident in meeting our target for the year of 20-25% growth in revenues year-over-year.

(Source: PR Newswire, 2011-05-16)

"We implemented a broader marketing strategy for our flagship Xin Aoxing Capsule, complemented by our expansion into more retail locations in rural areas. This enabled us to achieve record sales and earnings for the year. We expect to have 13,000 rural locations by the end of 2011, up from approximately 10,000 at the end of 2010, and believe this sales channel will further drive incremental growth for the year."

Biostar launched 5 new products during 2010, including health products such as Tangning Capsule, Yizi Capsule, Shengjing Capsule and Aoxing Ointment. Total revenue from new products was approximately $6.7 million during 2010, a 30% increase and further increases are anticipated during 2011. The Company expects to receive final SFDA approval to produce Zushima Analgesic spray, a pain reliever product intended for use by military personnel during the first half of 2011. Management expects total sales from new products to represent 10% of its forecast for 2011.

(Source: PR Newswire, 2011-03-25)

    see all Business Outlook notes

 Analyst Coverage (show less)
2011-05-16Rodman & RenshawReiterationOutperform$7.00
2011-03-25Rodman & RenshawReiterationOutperform$7.00
 

Biostar reported a top line of $80.2MM in 2010, representing a 50% growth over 2009, slightly higher than our estimates of $79.5MM. The company reported 2010 diluted EPS of $0.63, inline with our estimates. Cash decreased to $13.2MM in 4Q10 from $16.6MM in 3Q10, partly due to $7MM deposits paid for acquisitions. Sales of the flagship product Xin Aoxing were $53MM in 2010, representing a 46% growth YoY. Rural distribution network surpassed 10,000 clinics in 22 provinces in 2010.

The company plans to expand sales of Xin Aoxing from 22 to 26 provinces with an increased sales team in 2011. The company guided a 25-30% top line growth in 2011 primarily due to sales of Xin Aoxing. We reiterate our Market Outperform Rate with a 12-month target price of $7 per share.

2010-12-13Rodman & RenshawReiterationOutperform$7.00
2010-11-18Rodman & RenshawInitiationOutperform$7.00
 

We are initiating coverage of Biostar Pharmaceuticals with a Market Outperform / Speculative Risk rating and a 12-month target price of $7/share. Biostar has established strong historical revenue growth with its flagship product Xin Aoxing targeting the world's largest hepatitis B market. The company's future growth could be driven by increasing market penetration of Xin Aoxing in addition to a pipeline of smaller marketed products.

Biostar's flagship product Xin Aoxing targets the largest hepatitis B market in the world. One third of the world's hepatitis B patients reside in China. The market for hepatitis B drugs could potentially grow multiple fold from current $700MM in China. Xin Aoxing is one of the few SFDA approved OTC drugs for the treatment of hepatitis B. In addition, the OTC classification allows Biostar to conduct direct-to-consumer (DTC) advertisement campaigns and to build regional brand name. Sales of Xin Aoxing reached $35MM in 1-3Q10, contributing 67% of total revenue. In our opinion, Xin Aoxing could reach $50MM in sales in 2010 and $80MM in 2013.

Biostar has established an extensive marketing network with 21 distributors and over 280 sales people. Through DTC advertising, Biostar has established a regional brand name and has penetrated 22 provinces and over 8,500 rural clinics. Our survey on 16 out of 21 distributors suggests strong growth potential for the key product based on brand name recognition and customer loyalty. The company plans to increase market penetration by expanding its sales network to 10,000 rural clinics by YE10, and to 26 provinces by YE11.

China's economic growth is predicted to outpace the rest of the world in 2010 and 2011. Chinese pharmaceutical industry is a key contributor to overall growth. Based on the announced $124B healthcare budget for 2009-2011, we believe the potential demand for pharmaceutical products could increase by six-fold in 2010.

We derive our valuation for Biostar based on an analysis of P/E multiples of comparable companies. Companies with similar growth opportunities are currently trading at approximately a ~9X P/E multiple. By applying a 9X P/E multiple to our 2011 EPS estimates, the estimated value of Biostar would be $7/share.

2010-02-16EquityNet ResearchInitiationStrong Buy$9.13
 

Paid research. Full report (PDF) available as download

BSPM is currently followed by 2 analysts. Both give the stock a positive rating. The average price target is 8.07, which implies 363.50% upside from current price.


 Investor Presentations
2011-07-18 (HTML)   VIEW
2011-02-18 (HTML)   VIEW
2010-09-13 (HTML)   VIEW
2010-03-09 (HTML)   VIEW
BSPM
Healthcare & Drugs
SCORE
7
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Current Price:  $1.74
F10k Day (2009-08-14): -85.50%$12.00
2009 Close: -86.97%$13.35
2010 Close: -79.44%$8.46
2011 Close: -6.46%$1.86
High (2012-04-23): -17.54%$2.11
Low (2012-04-03): 210.71%$0.56
Exchange: NCM
Market Capitalization: 16.36 mill
Total Shares: 9.40 mill
Float: 2,194,000.00 mill
Avg Volume: 153.20 k
Short Interest: 47.90 k
Short Ratio: 0.08%0.3 d
Last Quarter: 2012-06-30
Revenue (MRQ): 8.16 mill
Net Income (MRQ): -1.58 mill
Op. Cash Flow (MRQ): -3.02 mill
all financial data provided without warranty