Dallas, TX 11/17/2007 3:23:52 AM
Renhuang Pharmaceuticals, Inc. (RHGP) Buoyed by Fast-Growing Market
For Complete Coverage of Renhuang Pharmaceuticals Visit Beacon Equity ResearchThe Chinese pharmaceuticals market is forecast to become the world’s fifth largest by 2010 - and the largest by 2050. However, the industry is still small-scale, with a scattered geographical layout and duplicated production processes. Renhuang Pharmaceuticals, Inc. (RHGP), a fast-growing pharmaceuticals company, manufactures and distributes a broad line of high-quality nutraceutical, natural medicinal and bio-pharmaceutical products in mainland China. Its three major product lines are Acanthopanax-based natural medicinal products, the Shark Power healthcare series and traditional Chinese medicines.
The pharmaceuticals market across the world is witnessing increased opportunities in the areas of Bio Pharmaceuticals, Pharmacogenomics and Biologics market. Renhuang Pharmaceuticals, Inc., on its part, experienced increased revenues with its dominant share of the market for Acanthopanax-based natural medicines, controlling 70% of China’s Acanthopanax resource (also known as Siberian Ginseng). It is expecting 30% annual growth in sales of its Acanthopanax-based products over the next three to five years.
There is greater market access following China's entry into the World Trade Organization (WTO), but multinational investors continue to face a range of obstacles, many of which stem from the legacy of central planning of the industry. As a major player in the global pharmaceuticals market, China-based Renhuang Pharmaceuticals is strategically positioned and has established a multi-channel research and development infrastructure consisting of in-house researchers, a post-doctoral working center, and collaborations with leading institutions and scientists to fully tap its potentials.
Renhuang Pharmaceuticals has a portfolio of over 100 products, and a presence in more than 50 markets. Products are distributed through a network of over 2,000 sales agents in 24 districts covering over 50% of China and also exported to Russia and Southeast Asia. It is anticipating revenues of between $30 million and $35 million and net profits of between $10 million and $12 million for fiscal full-year 2007. Roughly 50% of sales are expected to come from Acanthopanax-based products, 30% from Traditional Chinese Medicine products with the balance representing sales of Shark Liver Oil products and other bio-pharmaceuticals.
Assuming 30% annual sales growth in the Acanthopanax-based product line and 20% annual growth in the other two product lines, they will derive an estimated revenue of approximately $45 million for 2008 and a 2009 revenue estimate of $55 million. Assuming 32% net margins, they will derive an estimate of 2008 earnings of $0.41 per share.
About Renhuang Pharmaceuticals, Inc. (OTCBB: RHGP)
Renhuang Pharmaceuticals Inc. is a pharmaceuticals company. The Company acquired Harbin Renhuang Pharmaceutical Company Limited in September, 2006 and all of the assets of Qingyang Herbal Extracting Factory in March, 2007. The acquired facility is capable of processing approximately 18,000 tons of herbal raw materials into extracts and doubles the Company’s current herbal extraction capacity. Renhuang Pharmaceuticals is headquartered in Harbin in the Heilongjiang Province in Northeast China. Its shares trade over the counter as RHGP.OB.
Beacon Equity Research Disclosure
The analysts contributing to this report do not hold any shares of Renhuang Pharmaceuticals (RHGP). Additionally the analysts contributing to this report certify that the views expressed herein accurately reflect the analysts' personal views as to the subject securities and issuers. The analyst(s) writing this report recognize and aspire to all of the CFA Institute Guidelines for Independent Research. Beacon Equity Research (“Beacon”) certifies that no part of the analysts' compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analysts in the report. Beacon Equity Research and its affiliates have been directly compensated a total of ten thousand restricted rule 144 shares from Viking Investments for enrollment of RHGP in its research program. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. As such, the report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed herein are subject to change.
