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To OTC Journal Members:
Today's new idea has a video for your pleasure. Place your seat backs in their full and upright position, get your seat belt on, and get ready for take off. Turn off all other electrical devices.
Viewing the video could not be more
simple- just go to the home page at www.otcjournal.com,
and it will just start playing. Turn on your speakers, and be prepared
to invest 12 minutes and 34 seconds of your time. If you like the idea,
it could be the best 13 minutes you ever invested. Stick around for my
conclusion and watch me have some fun with it.
China boasts the oldest civilization in the world, and was really the dominant global culture until the whole darn country missed the Industrial Revolution in the early 20th Century. Dating back to the 17th Century BC, the Chinese civilization dominated globally for 37 centuries before losing ground under the archaic Communist system.
Today, China's version of Communism is about as capitalistic as it gets, and the Chinese government is implementing policies to encourage the growth of private enterprise business. In short, they are making up for lost time very quickly.
The Chinese civilization has had 3700 years to develop traditional health care therapies. That's one heck of a long clinical trial. After 3700 years, it is reasonable to assume today's popular therapies are around because they work. Traditional Chinese medicine has been weaved into the fabric of their society for thousands of years.
Fast forward to today's Modern China. TCM is still a major part of the culture, but the manufacturers of it are now regulated, and the products they market require approvals. Over 80% of hospitals offer TCM as a regular part of their therapy.
As the number of China consumers swells by another 130 million over the next five years, the means to consume a lot more product in the TCM space will grow considerably. Coupled with a projected 44% increase in government spending on health care, the future looks pretty darn robust for TCM medicines in general.
Armed with 29 government approvals,
10 herbal based compounds that generated $60 million in annual sales
in FY '10, $9 million in net profits, 300 sales reps in 20 offices throughout
China, and a marketing war chest, Bohai is positioned for very robust growth
in FY'11, underway since July 1st.
As stated above, BOPH has 29 governtment approved herbal compounds, and 10 products on the shelves today. Here's my favorite. This Elixir is used for fatigue, insomnia, and impotence. As I said on the video, Caffeine, Ambien, and Viagra all rolled into one. Nice.
The company also has compounds used to treat arthritis, the flu, iron poor blood, lung distress (very popular in the big cities), back pain, muscle soarness, and circulatory issues. You can review images of their products on their corporate web site at www.bohaipharma.com.
The use of TCM has also expanded
quite dramatically on a global basis- a $32 billion plus market growing
at 23% annually. Bohai has the opportunity to expand in the direction
of export, but I don't believe you need to bet on exports to make money
on the stock. They have virtually unlimited expansion opportunity with
China, and it's merely the allocation of resources by the company to fuel
Plain and simple: Pre announced today for FY'10 which ended at the end of June: $58 million in revenues, and $.61 per share in EPS. These numbers will be in the rear view mirror as soon as he final 10K is filed, and that is due out by the end of September.
The only time- perhaps in history, we will be able to buy $.60 in EPS for a mere 2 bucks is right now. And - remember- you are buying $.60 in EPS for $2.30 in last year's numbers. Next year is a whole other story, and the company will likely come in much higher if history repeats itself.
There's nothing to see on a chart. This stock has just begun trading. The one month high is $2.30- the low was $.80, which it touched off for a nano second. More importantly, the company raised over $10 million earlier this year with over 100 individual investors. Those investors paid $2.25- about where the stock trades today.
The catalytic event that could get this one rolling is yesterday's disclosure of the numbers- $58 million in revs and $.61 in EPS for the fiscal year ending this past June 30th- the final numbers will be out later this month, and no doubt they will be slightly higher.
And- did I mention? BOPH has about $25 million more in cash and receivables than it has in debt and payables? That's about $1.50 per share in cash (end of March report)- you are therefore buying the business for $.80 per share at $2.30. The rest is cash.
I invested $75,000 of my own money in this one at $1.50, I see the stock worth $6 in any sort of reasonable market. I've been in it for about 4 months now. It's worth noting, as I disclosed in my recent article on "Faith Based Investing", that I invested personal money in NFEC at $.60 at the last market low, and CREG at $1.30 at the last market low as well. Look at the highs on those stocks, and look at today's levels.
There's no assurance history will repeat itself, but I certainly sleep well at night knowing I own pieces of the fabulous China based companies that are making money and growing. With patience, this a no brainer for investors with a time horizon of several months.
As always, don't forget to check at www.pinksheets.com for the accurate. Click here go straight to the quote for BOPH.
Here's Friday's news for you review:
Disclosure: I'm long, as are other affiliates in our organization. We have been paid no compensation for this coverage.
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