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Bohai Pharmaceuticals (BOPH); 3,700 Years Of Clinical Trials

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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.
 

Bohai Pharmaceuticals (OTC BB: BOPH): 3,700 Years Of Clinical Trials

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.
 

The Products

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 the expansion.
 
 
 

The Numbers

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:
 
 

Bohai Pharmaceuticals Issues Fiscal 2010 Revenue and Earnings Guidance

Company Forecasts Net Revenue of $58 Million for the Year Ended June 30, 2010, Net Income of $9.0 Million and EPS of $0.61, Exceeding Previous Year’s Performance

Press Release Source: Bohai Pharmaceuticals Group, Inc. On Friday September 10, 2010, 4:10 pm EDT

YANTAI, China--(BUSINESS WIRE)--Bohai Pharmaceuticals Group, Inc. (OTCBB/OTCQB: BOPH), a China-based pharmaceutical company engaged in the production, manufacturing and distribution of Traditional Chinese Medicine (TCM) in China, today announced revenue and earnings guidance for its fiscal year ending June 30, 2010. Based on a preliminary assessment of Bohai’s year-end financials, which will be finalized toward the end of September and announced through a 10-K filing with the SEC, Bohai expects to report record levels of net revenue and net income in comparison to its fiscal 2008 and 2009 results.

The company’s projected guidance for its June 30, 2010 fiscal year results are as follows:

• FY 2010 projected net revenue of $58 million (vs. $49.3 million FY 2009), equating to an 18% year-over-year net revenue increase.

• FY 2010 projected net income of $9.0 million (vs. $7.9 million FY 2009), equating to an approximate 14% year-over-year net income increase.

• EPS of approximately $0.61 based on 14.7 million weighted average basic shares outstanding.

"We remain unequivocal in our commitment to driving revenue and earnings growth,” said Mr. Hongwei Qu, President and Chief Executive Officer of Bohai Pharmaceuticals. “We believe that our business model, which focuses on the government supported pharmaceutical and healthcare markets in China, is validated by our nine months ended March 31, 2010 top line results as well as current and forecasted top line and bottom line numbers for our June 30 fiscal year end. We believe our proactive sales initiatives and increased budget due to our capital raise in January will serve to drive our revenues, earnings and, ultimately, shareholder value.”

Bohai Pharmaceuticals Group recently became a US publicly listed company in early 2010, along with a concurrent $12 million private raise, and as a result of the guidance announced today, expects to achieve record levels of revenue and earnings due to its corporate growth initiatives and expertise in China’s expanding pharmaceutical and Traditional Chinese Medicine (TCM) industries. The company is committed to establishing itself as a leading manufacturer and distributor of TCM throughout China’s major cities and rural areas. The company believes it is positioned to capitalize on the rapidly-growing demand for Traditional Chinese Medicine products in China, which is anticipated to increase due to China’s rising middle class, increasing elderly population and Chinese government support. More details regarding Bohai’s business and financial condition and results will be available in the company’s Annual Report on Form 10-K, which is due to be filed by the end of September. The guidance set forth herein is preliminary, unaudited and, therefore, subject to change.

About Bohai Pharmaceuticals Group, Inc.

Based in the city of Yantai, Shandong Province, China, Bohai Pharmaceuticals Group, Inc. (OTCBB/OTCQB: BOPH) is engaged in the production, manufacturing and distribution of herbal pharmaceuticals based on Traditional Chinese Medicine in China. Bohai’s medicines address common health problems such as rheumatoid arthritis, viral infections, gynecological diseases, cardio vascular issues and respiratory diseases. Bohai’s products are sold either by prescription through hospitals or over-the-counter through local pharmacies and retail drug store chains. Bohai has approximately 600 employees, including approximately 300 sales representatives, operating from 20 offices throughout China. Bohai’s lead products, Tongbi Capsules and Tablets and Lung Nourishing Cream, are eligible for reimbursement under China’s National Medical Insurance Program.

For additional information, please visit Bohai’s corporate website: www.bohaipharma.com.

Additional Information Relating to Bohai’s Trading Data

Due to certain recent disruptions in the marketplace relating to quotations on the OTC Bulletin Board operated by FINRA (OTCBB), incomplete trading data may exist for certain companies like Bohai. Real-time trading data for Bohai on the OTCQB market is available through the below link. Readers are advised that OTCQB market is operated by the owner of otcmarkets.com, and Bohai Pharmaceuticals Group, Inc. makes no representation or warranty regarding the OTCQB market.

For real-time trading data for Bohai on the OTCQB market, including Level 2 quotes, please visit: www.otcmarkets.com/stock/boph/quote.

Cautionary Note Regarding Forward Looking Statements

This press release, the investor presentation material referred to herein and the statements of representatives of Bohai Pharmaceuticals Group, Inc. (the “Company”) related thereto contain, or may contain, among other things, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are “forward-looking statements,” including any other statements of non-historical information. These forward-looking statements are subject to significant known and unknown risks and uncertainties and are often identified by the use of forward-looking terminology such as “guidance,” “projects,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” or similar expressions. All forward-looking statements involve material assumptions, risks and uncertainties, and the expectations contained in such statements may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results (including, without limitation, the guidance for financial results described in this press release) could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the completion of audited financial statements and the factors and risks discussed in the periodic reports that the Company files with the Securities and Exchange Commission (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. The Company undertakes no duty to update these forward-looking statements except as required by law.

Contact:

Company Contact:
Bohai Pharmaceuticals Group, Inc.
Gene Hsiao, Chief Financial Officer
212-521-4470    212-521-4470 

Financial Communications Contact:
Trilogy Capital Partners - Asia
Darren Minton, President
Toll-free: 800-592-6067   800-592-6067 
info@trilogy-capital.com

 



Disclosure: I'm long, as are other affiliates in our organization. We have been paid no compensation for this coverage.

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