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Tuesday, July 21, 2009
Source: Skystar Bio-Pharmaceutical Company
On Tuesday July 21, 2009, 7:00 am EDT
Skystar Bio-Pharmaceutical Company (NASDAQ:SKBI - News) ("Skystar" or the "Company"), a China-based producer and distributor of veterinary medicines, vaccines, micro-organisms and feed additives, today announced that the Company's Chairman and CEO Weibing Lu, CFO Bennet P. Tchaikovsky and Director R. Scott Cramer, will ring the opening bell at the NASDAQ Capital Market on Wednesday, July 22, 2009, in New York City. Skystar's common stock began trading on the NASDAQ on June 26, 2009
The opening bell ceremony will take place beginning at 9:20 a.m. Eastern Time at the NASDAQ MarketSite in New York's Times Square and will be broadcast live on the seven-story NASDAQ tower.
"We are honored to participate in the NASDAQ opening bell ceremony," said Mr. Lu. "We believe that our recent listing on NASDAQ will expand our exposure to the U.S. investment community and further enhance shareholder value. Skystar is a leading supplier in the rapidly growing veterinary health- and medical-care industry in China. For fiscal 2009, Skystar increased revenues by 42% to $25.6 million, and increased net income by 73% to $5.6 million. We are anticipating adding approximately 40 new products to our portfolio this year and expanding our manufacturing capabilities, which we expect can add $16.7 million in revenues and improve gross margins by up to $11.7 million by 2010." Press Release
FIT - Bought at $3.50 on May 7th. See Blog Post It hit $8.19 (52 week high) yesterday July 20th for a 134% gain from original entry.
DIT - Bought at $32 on April 23rd See Blog Post. It hit $49.70 yesterday (52 week high) July 20th for a 55% gain from the original call. Lowest float out there and very volatile. What is better is that DIT reported earnings this week and EPS from continuing operations was $3.11. My original DD said a $10-$12 EPS run right and it was correct. See Press Release
And last but not least, the stock I believe has the most upside and momentum potential.
I have been buying and blogging SKBI (was SKBO.OB prior to Friday) since the $11 range See Blog Post.
Updated Float Analysis: Skystar has approximately 1.869m shares outstanding pre-secondary. On page 38 of the most recent S-1 Read S-1, it states that between management and two funds there are approximately 1.5m shares held. On page 7 it states management is locked up for six months from the date of the secondary. After the 1.6m shares were sold recently, I am guessing that not many will flip this stock for $5-$10 dollars with this EPS potential and a P/E of 4. Depending on how many hold these shares, SKBI could have a float range of approximately 1m to 1.5m (Mid-point is 1.25m).
Also, according ot this article out last week, SKBI is on the naked short list (have not confirmed) Read Article
Updated EPS Analysis: In 2008 (see the presentation and the S-1 they did $3.07 EPS on the shares outstanding), Skystar had $5.6m of net income that included $1.1m of non-recurring expenses, or $6.7m adjusted net income.
Skystar had approximately 1.869 shares at the beginning of FY2009. They will sell 1.6m shares this week, however those shares will only be outstanding approximately six months of FY2009. So fully diluted weighted average shares for FY2009 should be approximately 2.769 (1.869 + half of 1.6m).
If I divide the FY 2008 adjusted net income by the new post-IPO share count of approximately 2.569m, I get EPS of $2.51. Skystar would only have to grow net income by approximately 20% in 2009 to have EPS of $3. However, in the first quarter of 2009, net income was up 72% YOY! It is easy for me to see how this Company could potentially do over $3 EPS for FY2009. Lastly, as discussed in my original blog post, in FY2010 expansion sales give the potential for approximately another $1 EPS. So I also see that potential for this Company to do over $4 EPS in FY2010.
Again most growing, profitable Chinese companies get a P/E of at least 10. Most do not have such a small outstanding share structure as SKBI (which can drive momentum).
With my estimated 2009 EPS range of $2.50-$3.50 and 2010 of $3-$4, a P/E range of 10-20 on 2009 EPS at the mid point of my range ($3) would be $30-$60 price per share. Combine that with a low float this stock is the most attractive out there for value/momentum. I believe hedge funds have been buying this stock and soaking up the float as they see the same potential I do.
This blog is just my rationale for my own investing and not a prediction or investment advice.
Tuesday, July 14, 2009
Source: Skystar Bio-Pharmaceutical Company
On Tuesday July 14, 2009, 7:00 am EDT
Skystar Bio-Pharmaceutical Company (NASDAQ:SKBI - News) ("Skystar" or the "Company"), a China-based producer and distributor of veterinary medicines, vaccines, micro-organisms and feed additives, today announced its business expansion plans and growth expectations following the Company's recent common stock listing on the NASDAQ Capital Market.
Skystar's veterinary healthcare and medical care products cover the major segments of the animal farming industry through its four product lines: veterinary medications, micro-organisms, feed additives and veterinary vaccines. The Company has a robust portfolio of over 170 products, as well as over 40 products under development for which the Company expects approval this year. Skystar has a strategic sales and distribution network of more than 1,128 agents and 400 direct customers. Skystar's distribution network covers all 29 farm producing provinces in China. Skystar is currently the only China-based veterinary supply company that is listed on a U.S. stock exchange.
"At this stage in our corporate development, we are pleased to increase our visibility by listing on the NASDAQ Capital Market," Weibing Lu, Skystar's Chairman and Chief Executive Officer, stated. "We are competing in a young and fragmented industry where demand exceeds supply. We hold a significant competitive advantage by offering four product lines that address key segments of the animal farming industry, whereas most of our competitors offer only one or two products. We also strive to deliver higher quality and more effective products, with lower prices and better service than our competitors. We are leveraging our extensive distribution network and solid customer base by adding an estimated 40 products currently under development. In addition, we are seeking to increase our manufacturing capabilities as well as exploring acquisition opportunities in our industry.
"We are in the process of completing our vaccine manufacturing facility, which is expected in the fourth quarter of this year," continued Mr. Lu. "Once completed, this facility is expected to increase our vaccine production capacity by 2,300%, from 250 million units to 6 billion units, with a projected increase in revenue of $14 million with gross margin of $8.4 to $9.8 million in 2010. We also expect to complete our micro-organism and feed additives facility in the fourth quarter of this year, which is anticipated to increase our micro-organism and feed additives production capacity by 48.7%. Once completed, the micro-organism facility is expected to add $2.7 million in revenue with gross margin of $1.9 million in 2010."
For fiscal 2008, Skystar reported $25.6 million in total revenues and net income of $5.6 million, compared with revenues of $15.1 million and net loss of $2.0 million for fiscal year 2007. For fiscal 2003 through 2008, Skystar has achieved a compound annual growth rate of 84.39% for revenues and 84.36% for gross margins.
Skystar Common Stock
Skystar common stock began trading on June 26, 2009 on the NASDAQ Capital Market. A public offering of 1.61 million shares of common stock at $12.98 per share was completed on July 8, 2009 for gross proceeds of $20.89 million.
About Skystar Bio-Pharmaceutical Company
Skystar is a China-based developer and distributor of veterinary healthcare and medical care products. Skystar has four product lines (veterinary medicines, micro-organisms, vaccines and feed additives) and over 170 products, with over 40 additional products in the developmental stage. Skystar has formed strategic sales distribution networks covering 29 provinces throughout China. For additional information, please visit http://www.skystarbio-pharmaceutical.com.
To be added to the Company's email distribution for future news releases, please send your request to email@example.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain of the statements made in the press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in The People's Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
ContactsThe Piacente Group, Inc. (Investor Relations Counsel)Kristen McNally(212) 481-2050Email ContactSkystar Bio-Pharmaceutical Co., Ltd.Scott CramerDirector - U.S. Representative(407) 645-4433Email Contact
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