China Biologic Products (CBPO) research, news, and more from GeoInvesting

Company description

Mon, 17 Mar 2008 04:00:00 GMT

China Biologic Products, Inc., through its indirect majority-owned subsidiary, Shandong Taibang, is currently the only plasma-based biopharmaceutical company approved by the government of Shandong Province, the second largest province with a population of 93 million. The company is engaged primarily in research, manufacturing, and sale of plasma-based biopharmaceutical products to hospitals and other health care facilities in China.

Comments & Business Outlook

Mon, 07 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

Total sales increased $5.3 million or 14.7% to $41.3 million in the third quarter 2011 from $36.0 million in the third quarter 2010, including the benefit of a 6.1% gain from foreign exchange translation. Total sales in RMB increased 8.6% in the third quarter 2011 from the third quarter of last year.

Gross profit increased $0.2 million or 0.8% to $27.5 million in the third quarter 2011 from $27.3 million in the third quarter 2010. The gross profit margin was 66.7% in the third quarter 2011 compared with 75.9% in the third quarter 2010.

(Loss) income from operations decreased $28.2 million or 149.9% to a loss of $9.4 million in the third quarter 2011 from $18.8 million in the third quarter 2010. The third quarter 2011 included a non-cash charge for impairment loss of goodwill of $18.1 million and a non-cash loss on abandonment of long-lived assets of $6.5 million.

GAAP net (loss)/income attributable to China Biologic decreased $23.1 million or 168.2% to a net loss of $9.4 million in the third quarter 2011 from a net income of $13.7 million in the third quarter 2010.

Diluted net loss per share was $0.37 in the third quarter 2011, down from diluted net income per share of $0.39 in the third quarter 2010.

Excluding non-cash employee stock compensation, non-cash gain related to change in fair value of derivative liability, impairment loss of goodwill and loss on abandonment of long-lived assets and write-off of raw plasma materials due to the closure of the plasma collection stations of Guizhou Taibang, the non-GAAP adjusted net income attributable to China Biologic was $11.0 million or diluted net income per share of $0.42 in the third quarter 2011, from $10.5 million or $0.40 per diluted share in the third quarter 2010.

CEO Comments

Mr. Chao Ming Zhao, Chief Executive Officer of China Biologic, said, "With the closure of our plasma collection stations in August 2011 due to the unexpected policy changes by the Guizhou provincial government, we have taken several measures to mitigate the loss of about 34% of our total raw plasma collection (based on our collection volume in 2010). Those measures are both short-term and longer-term.

"First, to ensure a minimal write-off on the collected plasma from these closed stations, we will maintain adequate employees from the closed stations to actively track donors who made donations before the stations closed on August 1 but have not yet returned for a second test for compliance with 90-day quarantine rules.

"Second, we are in the process of reallocating resources from the closed stations to other facilities within the Company in order to maximize their utilization.

"Third, we are working on strategies to explore new suitable regions for new plasma stations, especially in other provinces. That process, from gaining multiple levels of government approval to selecting appropriate locations for building plasma stations can be a relatively long process with some uncertainties, given the need for station construction, equipment installation, inspections and licensing, and donor promotion and education programs.

"Fourth, we are adjusting our production plan and sales strategy both in the short-term and mid-term to leverage the available resources to maximize profit as we respond to changing market dynamics.

"Last, we further increased our direct sales efforts on the hospitals and inoculation centers that are likely to be our best and highest volume customers for the long-term. That effort has also been accelerating the increase in the portion of our sales that are sold directly to institutions instead of through independent distributors and others. As you recall, we believe the shift to direct sales is very important to our long-term success."

Following the closure of four plasma collection stations of Guizhou Taibang, the Company revised its earnings guidance for the year of 2011 and experienced incremental declines in its stock price and market capitalization in the third quarter of 2011. The closure of the plasma collection stations is considered to be a triggering event that the fair value of the Company's reporting unit would more likely than not be below its book value. Therefore the Company performed a two-step goodwill impairment test and concluded that for the three months ended September 30, 2011, a goodwill impairment loss of $18.1 million was recognized in the Company's single reporting unit since the carrying amount of the reporting unit was greater than the fair value of the reporting unit (as determined based on the quoted market price) and the carrying amount of the reporting unit goodwill exceeded the implied fair value of that goodwill.

As a result of the closure of four plasma collection stations of Guizhou Taibang, certain equipment, office furniture, building improvement and plasma collection permits were abandoned during the three months ended September 30, 2011. Loss on these long-lived assets of $6.5 million was recognized in the three months ended September 30, 2011.

(Loss)/income from operations decreased 149.9% to a loss of $9.4 million in the third quarter from an income of $18.8 million in the third quarter 2010. The operating income margin declined to (22.7)% in the third quarter from 52.3% in the third quarter 2010.

The embedded derivatives (including the conversion option) in our senior secured convertible notes and warrants issued in June 2009 are recorded at fair value. The Company recognized a gain of $2.9 million from the change in fair value of derivative liabilities in the third quarter 2011 compared with $3.8 million in the third quarter 2010. The recognized gain from the change in the fair value of the derivative liabilities in the third quarter 2011 was mainly due to a decrease in the price of our common stock from $10.20 per share as of June 30, 2011 to $6.81 per share as of September 30, 2011. As of September 30, 2011, the embedded conversion option in our convertible notes was no longer outstanding because the convertible notes had been fully converted. Future chan

Corporate Governance

Wed, 12 Oct 2011 04:00:00 GMT

On October 6, 2011, Dr. Xiangmin Cui resigned from his positions as a director of China Biologic Products, Inc. (the “Company”), a member of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee of the Company and the Chairman of the Compensation Committee, effective immediately. Mr. Cui’s resignation was due to personal reasons and not because of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Dr. Cui will serve as an independent consultant for the Company.

Comments & Business Outlook

Tue, 09 Aug 2011 04:00:00 GMT

Financial highlights for the second quarter 2011

Total sales in US dollars increased 1.9% in the second quarter 2011 to $41.7 million from the second quarter 2010, with the benefit of 4.8% foreign exchange translation gain. Total sales denominated in RMB decreased 2.9% in the second quarter from the second quarter of last year.
Gross profit decreased 8.5% to $29.2 million in the second quarter 2011 from the same period in 2010. The gross profit margin was 70.0% in the second quarter 2011 compared with 77.9% in the second quarter 2010.
Income from operations decreased 24.3% to $17.2 million in the second quarter 2011 from the prior second quarter.
GAAP Net income attributable to China Biologic increased 28.3% to $16.6 million or $0.28 per diluted share in the second quarter 2011 from the second quarter 2010.
Excluding non-cash employee stock compensation, non-cash gain related to change in fair value of derivative liability, and interest on convertible notes, the non-GAAP adjusted net income attributable to China Biologic was $8.7 million or $0.33 per diluted share in the second quarter 2011, a 20.5% decrease from $11.0 million or $0.41 per diluted share in last year's second quarter.

CEO Comments

Mr. Chao Ming Zhao, Chief Executive Officer of China Biologic, said, "We understand that investors have concerns about the unexpected closing of four of our plasma collection stations in Guizhou province that occurred on August 1, 2011 at the direction of the Guizhou Provincial government's newly imposed plan and policy. These stations accounted for about 34.1% of our total raw plasma volume collected in 2010."

"To mitigate the effects from the closing of the 4 plasma collection stations, we are working on alternative solutions and opportunities that include minimizing the write-off of already collected plasma from these 4 stations by performing all tests required by the 90-day quarantine rules, reallocating resources from the closed stations to maximize their utilization within the Company, and exploring new regions for new plasma stations."

"In addition, we are adjusting our production plan and sales strategy to leverage the available resources to maximize profit as we respond to the changing market dynamics. For example, given the limited supply of raw plasma in the future, we will focus on supplying our products, which are critical and irreplaceable to health care, via direct sales to our best customers. We remain committed to accelerating our earnings growth in the future -- by focusing on our direct institutional sales, broadening our geographic reach, finding and creating new raw plasma sources, continuing to develop a strong new product pipeline, and considering possible prudent acquisitions, mergers and potential international collaborations."

"Our sales, in terms of RMB, decreased slightly in the second quarter, mainly due to weaker product pricing in a more competitive market and lower revenue from high-value hyper-immune products due to unavailability of specific vaccinated plasma raw material. Additionally, we unified the labels and packaging of the products from our two subsidiaries so that our Taibang brand becomes our primary brand. It took us much longer to relabel and repackage the products than we expected, which resulted in delays in shipping and revenue recognition for IVIG products."

"Given that some factors are still evolving and it remains uncertain how they will be resolved, we have revised our guidance based on the current available information. For that reason, we recommend an extra measure of caution in interpreting our revised guidance."

"I assure you that we are working around the clock to recover from the unexpected loss of the 4 raw plasma collection stations in Guizhou. We plan to update you about our progress when we reach meaningful milestones."

Guidance and business outlook for 2011

China Biologic expects the revised total 2011 sales in the range of approximately $140 million to $145 million. The Company expects 2011 adjusted net income to be in the range of $28 million to $31 million, excluding any non-cash charge or gain related to change in the fair value of derivative liabilities, stock-based compensation expense, any adjustments in the U.S. federal income tax provision in 2011 related to the look-through exception for Subpart F income which expiring on December 31, 2011 and non-cash impairment losses associated, if any, with the closures of 4 plasma collection stations in Guizhou. The Company has provided the revised outlook based on the following factors:

The unexpected closure of 4 plasma collection stations in Guizhou, will limit our near-term future raw plasma supply. Additionally, the unexpected closure of a number of plasma collection stations in Guizhou may reduce China's plasma supply and could amplify the supply and demand imbalance for plasma products in China. Therefore, we have revised our sales and production strategies to maintain as smooth a product supply as possible to our key customers in a longer term.

The Company may have less imminent flexibility in reducing the expenses for previously planned and ongoing marketing and sales efforts (to expand its geographic markets, add new customers, and increase direct sales to institutional customers), and in minimizing the general and administrative expenses related to the 4 closed plasma collection stations. Therefore, we anticipate lower adjusted net income for 2011 despite the modest anticipated growth in sales in 2011.

Research

Tue, 26 Jul 2011 04:00:00 GMT

TAI'AN, China, July 26, 2011 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO) ("China Biologic" or the "Company"), a leading plasma-based biopharmaceutical company in China, today announced that through its Guizhou Taibang subsidiary, it has donated its life-saving plasma products (including 600 bottles 10-gram human albumin, 250 bottles 2.5-gram human immunoglobulin for intravenous injection, and 600 bottles 250IU human tetanus immunoglobulin) for the passengers and crew members who were injured in the train disaster near Wenzhou, Zhejiang Province of China. The donation was coordinated via the Wenzhou government officials and organizations in charge of the accident. The market value of the donation was close to RMB 600,000.

Mr. Chao Ming (Colin) Zhao, Chief Executive Officer of China Biologic, said, "Right after we heard of the tragedy, we immediately contacted the Ministry of Health and the Zhejiang Provincial Health Department to offer our products. We delivered our plasma shipment by express air for the injured victims of the terrible train crash that occurred near Wenzhou on July 23.

"These products are from our operations in Guizhou Province. We are fortunate to have a good supply of plasma products that are essential to the hospitals and surgical teams who are treating the injured. We thank the citizens of Guizhou Province, who have provided their valuable plasma to our company, for their substantial contribution in helping the injured and saving lives in the Wenzhou train accident.

"We extend our condolences to the families of the deceased and wish a prompt recovery to the injured. Our hearts, minds, and professional support are with you."

Analyst Reports

Sun, 24 Jul 2011 04:00:00 GMT

Rodman & Renshaw on CBPO

Termination of Coverage

Effective immediately, we are terminating coverage on China Biologic Products, Inc. (CBPO) to better allocate resources within our coverage universe. Our last rating on China Biologic was Under Review/Speculative Risk without a Target Price. Investors should not rely on our previously published financial projections.

INVESTMENT THESIS

China Biologic Products, Inc. (CBPO) is a fully integrated blood plasma products company with plasma collection, manufacturing, research and development, and commercial operations in China. Through organic growth, as well as strategic acquisitions, CBPO continues to grow revenue and market share in the Chinese plasma products market. The company’s main products include human albumin and intravenous immunoglobulin (IVIG), in addition to six other products, which combined generated over $139MM in revenue in 2010 and $34MM in 1Q11. Human albumin, the company’s top selling drug, is marketed in China for a variety of disorders associated with hypoalbuminaemia, such as burns, trauma and shock. Sales of human albumin reached $67MM in 2010 and $20MM in 1Q11, and are expected to remain a key revenue generator for the company. IVIG, which has the potential to become the company’s main revenue growth driver, contributed $48MM to the top line in 2010 and $10MM in 1Q11. The company is also expanding production capacity. CBPO completed a newly constructed manufacturing facility in July 2008, and is expected to finish another manufacturing facility by 2011, reaching an annual processing capacity of 1,200 – 1,300 tons of plasma from the current 1000 tons. Of importance, CBPO has strong R&D capabilities, and developed all of its eight plasma products in-house. CBPO has three other products in the pipeline, including hepatitis B IVIG, human prothrombin complex concentrate, and human coagulation Factor VIII, which are potentially high-margin plasma products.

Valuation

INVESTMENT RISKS

China Biologic Products, Inc. (CBPO) faces risks similar to other Chinese companies in the plasma-derived protein therapeutic industry, including changes in regulatory and health policies, delays in regulatory approval, clinical trial failure, and insufficient funds for long-term sustainability.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Investor Alert

Fri, 15 Jul 2011 04:00:00 GMT

TAI'AN, China, July 15, 2011 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO) ("China Biologic," or the "Company"), a leading plasma-based biopharmaceutical company in China, today announced that the Guizhou Provincial Health Department has issued the revised "Plan for Guizhou Provincial Blood Collection Institutional Setting (2011-2014)" (the "Revised Plan"). The Revised Plan reduces the number of counties that are permitted to set up plasma collection stations from the originally proposed 10 counties to 4 counties.

The Revised Plan, in the relevant part, states that "in accordance with the demographic distribution, economic development condition, disease prevalence, and actual situation of plasma supply for the manufacturing of blood-based products, plasma collection stations will be set up in 4 counties, including Kai Yang, Du Shan, Pu Ding, Huang Ping, etc."

Currently, there are 18 plasma collection stations, in 18 separate counties, operating in Guizhou Province. China Biologic's 54% indirectly owned subsidiary, Guizhou Taibang Biological Technologies Co., Ltd., currently has 6 active plasma collection stations in the Guizhou Province. Among the 6 active plasma collection stations, 2 are located in the counties included in the Revised Plan (Pu Ding and Huang Ping) and are currently expected not to be affected directly by the Revised Plan.

Based on the Company's preliminary understanding of the Revised Plan, subject to further clarifications from Guizhou Provincial government regarding the implementation of the Revised Plan, the Company currently anticipates the licenses of its 4 other plasma collection stations in Dan Zhai, Wei Ning, San Sui, and Na Yong counties may not be renewed (until at least 2014) after their respective plasma collection permits expire at the end of July 2011.

The Company's 4 stations in Dan Zhai, Wei Ning, San Sui, and Na Yong counties together accounted for approximately 34.1% of China Biologic's total plasma collection by volume in 2010. In addition, 1 inactive plasma collection station that the Company purchased from the government is unlikely to be licensed as planned, because it is in Zhengyuan County, a location not included in the Revised Plan.

The 2 active plasma stations in the counties included in the Revised Plan that are expected to continue operating are scheduled for relicensing before the end of July. The relicensing will require inspection of the plasma collection stations by provincial and other government officials. While the Company believes it meets or exceeds all inspection requirements at those stations, it is not yet clear what influence on the inspections the Revised Plan may have, if any.

The Company is currently evaluating the effect of the Revised Plan and the anticipated closing of the 4 active plasma collection stations including, among other items, the potential reduction in China Biologic's previously issued financial guidance for the year 2011, potential reduction in its business operations and financial performance in current and future periods, potential assets impairments associated with these plasma collection stations and the 1 inactive station, and other possible effects.

In a bid to mitigate the reductions from the anticipated closing of the 4 plasma collection stations in Guizhou, the Company is exploring alternative solutions and opportunities, but no assurance can be given that it will be successful in doing so. Among all of the Company's efforts, the Company is (1) requesting that the Guizhou Provincial government to reconsider the implementation of the Revised Plan, (2) contemplating new regions to apply for establishing new plasma stations, (3) minimizing the writing off of already collected plasma within the required 90-day quarantine period that potentially may be affected by the Revised Plan, and (4) creating the contingency plan for moving assets and paying severance to employees related to the 4 plasma collection stations affected by the Revised Plan, if the anticipated closures happen.

Analyst Reports

Tue, 12 Jul 2011 04:00:00 GMT

Rodman and Renshaw on CBPO 7/12/2011

Government Cut to Impact Plasma Supply

Yesterday, China Biologic Products announced that the Guizhou Provincial Health Department has issued a "Plan for Guizhou Provincial Blood Collection Institutional Setting (2011-2014)”. According to the plan, the local government is expected to shut down eight of the existing 18 plasma collection centers by the end of July 2011. China Biologic has six active plasma collection centers in the province and three of them are expected to be closed, according to the new policy. Currently, these three plasma collection centers contribute 24.5% of total volume collected by China Biologic in 2010. Following the potential shutdown, China Biologic is expected to have a total of 12 plasma collection centers, including two recently approved centers in Shandong Province. So far, there is no further information regarding the implementation of the policy, the compensation the government may provide to each affected company, as well as the fate of existing inventory at the affected centers during the required 90-day quarantine period. Of note, China Biologic owns the six active plasma collection centers in Guizhou Province through a 54% indirectly owned subsidiary, Guizhou Taibang Biological Technologies Co. Contribution to revenue is anticipated to be reduced by up to 24.5%. The company plans to appeal the implementation of the plan.

Pending a thorough re-evaluation of our model, once the impact of the shutdown is quantifiable, we are placing our rating and target price Under Review. Our previous rating was Market Outperform with a 12-month target price of $16/share.

Notice Regarding Privacy and Confidentiality:

Rodman & Renshaw, LLC reserves the right to monitor and review the content of all e-mail communications sent and/or received by its employees.

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Notice Regarding Privacy and Confidentiality:

Rodman & Renshaw, LLC reserves the right to monitor and review the content of all e-
This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member SIPC.
Member FINR

Investor Alert

Mon, 11 Jul 2011 04:00:00 GMT

TAI'AN, China, July 11, 2011 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO) ("China Biologic," or the "Company"), a leading plasma-based biopharmaceutical company in China, today announced that the Guizhou Provincial Health Department has issued a "Plan for Guizhou Provincial Blood Collection Institutional Setting (2011-2014)" (the "Plan").

The Plan, in the relevant part, states that "in accordance with the demographic distribution, economic development condition, disease prevalence, and actual situation of plasma supply for the manufacturing of blood-based products, plasma collection stations will be set up in 10 counties, including Xi Feng, Kai Yang, Zi Yun, Pu Ding, Du Shang, Long Li, Chang Shun, Huang Ping, Qing Long, and Na Yong, etc."

Currently, there are 18 plasma collection stations, in 18 separate counties, operating in Guizhou Province.

China Biologic's 54% indirectly owned subsidiary, Guizhou Taibang Biological Technologies Co., Ltd., currently has 6 active plasma collection stations in the Guizhou Province. Among the 6 active plasma collection stations, 3 are located in the counties included in the Plan (Pu Ding, Huang Ping, and Na Yong) and are currently expected not to be affected directly by the Plan.

Based on the Company's preliminary understanding of the Plan, subject to further clarifications from Guizhou Provincial government regarding the implementation of the Plan, the Company currently anticipates the licenses of its 3 other plasma collection stations in Dan Zhai, Wei Ning, and San Sui counties may not be renewed (until at least 2014) after their respective plasma collection permits expire at the end of July 2011. The Company's 3 stations in Dan Zhai, Wei Ning, and San Sui counties together accounted for about 24.5% of the Company's total plasma collection by volume in 2010. In addition, 1 inactive plasma collection station that the Company purchased from the government is unlikely to be licensed as planned, because it is in Zhengyuan County, a location not included in the Plan.

The 3 active plasma stations in the counties included in the Plan that are expected to continue operating are scheduled for relicensing before the end of July. The relicensing will require inspection of the plasma stations by provincial and other government officials. While the Company believes it meets or exceeds all inspection requirements at those stations, it is not yet clear what influence on the inspections the new Plan may have, if any.

The Company is currently evaluating the effect of the Plan and the anticipated closing of the 3 active plasma collection stations including, among other items, the potential reduction in China Biologic's previously issued financial guidance for the year 2011, potential reduction in its business operations and financial performance in current and future periods, potential assets impairments associated with these plasma collection stations and the 1 inactive station, and other possible effects.

In a bid to mitigate the reductions from the anticipated closing of the 3 plasma collection stations in Guizhou, the Company is exploring alternative solutions and opportunities, but no assurance can be given that it will be successful in doing so. Among all of the Company's efforts, the Company is (1) requesting that the Guizhou Provincial government to reconsider the implementation of the Plan, (2) contemplating new regions to apply for establishing new plasma stations, (3) minimizing the writing off of already collected plasma within the required 90-day quarantine period that potentially may be affected by the Plan, and (4) creating the contingency plan for moving assets and paying severance to employees related to the three plasma stations affected by the Plan, if the anticipated closings happen.

Investor Presentations

Sun, 12 Jun 2011 04:00:00 GMT

On June 3, 2011, China Biologic Products, Inc. issued a press release announcing its plan to attend the Jefferies 2011 Global Healthcare Conference in New York, NY on June 9, 2011

Analyst Reports

Tue, 10 May 2011 04:00:00 GMT

Rodman and Renshaw on CBPO 5/10/2010

Solid Quarter, Outlook Maintained

Key Points

China Biologic reported $34.5MM in revenues in 1Q11, representing a 27% growth YoY, beating our estimate of $30MM.
The company’s net income in 1Q11 was $6.3MM, or $0.23 per diluted share, and adjusted non-GAAP net income was $8MM, or $0.31 per diluted share, slightly higher than our estimate of $0.30 per diluted share.
Cash position decreased from $65MM in 4Q10 to $56MM in 1Q11, partly due to a $7.6MM acquisition of the non-controlling interest, as well as an $8MM increase in accounts receivables and inventories.
We maintain our Market Outperform rating and our 12-month target price of $16/share.

Growth Mainly Driven by Volume Increase

China Biologic reported unaudited top line of $34.5MM in 1Q11, higher than our estimate of $30MM. Revenue increase was mainly driven by the volume increase of the key products human albumin and IVIG, as well as the price increase of the specialty IgG. Going forward, pricing pressure remains high for albumin and IVIG with limited upside on volume in the short term. However, the supply of specialty IgG is expected to improve in 2H11. In addition, Human Prothrombin Complex Concentration and human coagulation Factor VIII are expected to receive the SFDA approval in 2H11 with material contribution anticipated by YE11. Therefore, we maintain our 10% growth projection for the rest of 2011 and our estimate of $158MM in revenue for 2011.

Tax Expenses Increased, Potential to Re-Obtain Preferential Rates in the Near Term

China Biologic has incurred an increase of the statutory tax rate from 15% to 25% for both Shandong Taibang and Guizhou Taibang starting in 2011. As a result, the effective tax rate changed from 21% in 2010 to 30% in 1Q11. Accordingly, we have adjusted our tax rate projection from 20% to 30% for 2011 – 2013. However, the company is in the process of re-application for the preferential tax rate of 15%. If approved, the 15% tax rate is applicable retroactively to the beginning of 2011, bringing in a potential upside to our EPS estimates. Our estimate for 2011 net income is $31MM including non-cash items. Based on the $2MM non-cash adjustment for 1Q11, our non-GAAP projection of 2011 net income is approximately $40MM.

Cash Generation Less Robust

China Biologic reported $56MM in cash in 1Q11, a decrease from $65MM in 4Q10. The decrease in cash is mainly due to one-time expenses of $7.6MM related to the acquisition of non-controlling interest and a $5.6MM dividend payment to non-controlling shareholders, as well as increases of $5MM in inventories and $3.3MM in accounts receivables. Due to the new marketing strategy of direct sales to hospitals implemented in 2H10, the company has incurred increasing amount of accounts receivables and Days Sales Outstanding are expected to increase gradually. Additionally, changing of the lot approval process by the government is expected to increase Days Inventory on Hand going forward. Therefore, we believe the cash conversion cycle is expected to increase and cash generation would be less robust during the transition period.

Valuation

We maintain our Market Outperform rating with a 12-month target price of $16 per share. The price target is derived from an NPV analysis of future cash flows with a 15% annual discount rate and a 5% terminal growth rate.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Comments & Business Outlook

Mon, 09 May 2011 04:00:00 GMT

Financial highlights for the first quarter 2011

Total sales increased 27.2% to $34.5 million in the first quarter 2011, from $27.1 million the first quarter 2010.
Gross profit increased 23.9% to $25.2 million in the first quarter 2011, from $20.3 million the first quarter 2010.
Income from operations increased 9.8% to $14.5 million in the first quarter 2011, from $13.2 million the first quarter 2010.
Net income attributable to China Biologic decreased 40.8% to $6.3 million in the first quarter 2011, from $10.7 million in the first quarter 2010.
Diluted earnings per share attributable to China Biologic decreased 11.5% to $0.23 in the first quarter 2011, from $0.26 per diluted share in the first quarter 2010.
Non-GAAP adjusted net income attributable to China Biologic increased 5.2% to $8.0 million in the first quarter 2011, from $7.6 million in the first quarter 2010.
Non-GAAP adjusted diluted earnings per share attributable to China Biologic increased 6.9% to $0.31 per diluted share in the first quarter 2011, from $0.29 in the first quarter 2010.

GeoTeam® Note: 2011 First quarter analyst EPS estimates were $0.23.

CEO Comments

Mr. Chao Ming Zhao, Chief Executive Officer of China Biologic, said, "We are pleased with our 27% sales increase during the 2011 the first quarter from the first quarter of last year, which we primarily attribute to general price increases for many of our products due to a continued supply shortage. During the first quarter, we also continued to aggressively expand our direct sales to hospitals and inoculation centers in order to boost our future sales. We believe that our strategy to expand our direct institutional sales remains the best long-term model for serving our customers and expanding our products and markets in China.

"We expect that the following strategies will help improve our performance this year: (1) we expect our direct sales to continue expanding as a result of our direct and aggressive promotion; (2) the supply of raw material necessary for the production of hepatitis B and human rabies immunoglobulin products is expected to improve in the second half of the year; (3) we expect two of our new products to be approved by China's State Food and Drug Administration this year, potentially generating sales by year's end; and (4) we will continue to stringently control our expenses while sustaining our pursuit in achieving higher direct institutional sales.

"We believe that the successful implementation of the foregoing strategies, along with the continued expansion of China's economy, the government's continued emphasis on higher health standards, and our strategic locations and high operating standards, strengthens the Company's outlook for 2011, and so we continue to be optimistic that our results for 2011 will be good. To emphasize our confidence and determination, we are maintaining our previous guidance for the year 2011."

Comments & Business Outlook

Fri, 01 Apr 2011 04:00:00 GMT

2010 Year End:

Sales increased $20.7 million or 17.4% to $139.7 million for the year ended December 31, 2010 from $119.0 million in 2009.
Gross profit increased $16.4 million or 18.9% to $102.7 million in 2010 from $86.4 million in 2009. Gross profit as a percent of sales increased to 73.5% in 2010 from 72.6% in 2009.
Income from operations increased $8.1 million or 13.3% to $69.5 million in 2010 from $61.4 million in 2009.
GAAP Net income attributable to China Biologic in 2010 was $31.5 million or $1.30 per diluted share, including a $3.2 million non-cash charge related to change in the fair value of derivative liabilities, compared with $2.2 million or $0.10 per diluted share in 2009, which includes a $28.9 million non-cash charge related to change in the fair value of derivative liabilities.
Non-GAAP adjusted net income was $39.0 million or $1.61 per diluted share in 2010 compared with $31.5 million or $1.43 per diluted share in 2009.

GeoTeam Note: Adjusted Fourth Quarter 2010 vs. 2009 EPS was $0.52 vs. $0.51.

"We believe that our strategy of direct institutional sales remains the good long-term model for serving our customers for our products and markets in China. When we acquired Dalin, we converted its sales model to direct institutional sales from sales conducted mainly through distributors. In 2010, direct institutional sales of Dalin did not grow as quickly as we expected. We will continue to strengthen Dalin's direct institutional sales approach in 2011.

China Biologic expects 2011 revenue to be in the range of $154 million and $168 million. This guidance assumes only organic growth and excludes acquisitions and construction of new facilities. The guidance necessarily assumes no significant adverse price changes during 2011.

The Company expects 2011 adjusted net income to be in the range of $41 million to $43 million, excluding any non-cash charge or gain related to change in the fair value of derivative liabilities and stock-based compensation expense and any adjustments in the U.S. federal income tax provision in 2011 related to the expiration of the look-through exception for Subpart F income on December 31, 2011. To support its business expansion, the Company expects to have substantially higher expenses in 2011 to expand its geographic market coverage, add new customers, and increase direct sales to institutional customers of its products. Due to the expected expense increase associated with our marketing and sales efforts, we anticipate modest growth in adjusted net income for 2011 despite anticipated growth in sales in 2011.

Liquidity Requirements

Fri, 01 Apr 2011 04:00:00 GMT

We expect that cash on hand, funds generated from our operations and funds generated from companies that we may acquire in the future will be sufficient to satisfy our current and future commitments for at least the next twelve months.

We will require additional working capital to support our long-term business plan, which includes identifying suitable targets for horizontal or vertical mergers or acquisitions, so as to enhance the overall productivity and benefit from economies of scale

Management believes that the Company has sufficient cash on hand and continuing positive cash inflow, from the sale of its plasma-based products in the PRC market. Our management expects continued growth in revenues throughout the term of the convertible notes, largely due to the ongoing limited supply of plasma-based products in the PRC market due to the introduction of more stringent health and safety measures which we already meet. In light of the foregoing, we believe that the Company will have the financial ability to fulfill its payment obligations under the convertible notes when they come due.

Comments & Business Outlook

Thu, 17 Mar 2011 04:00:00 GMT

Preliminary Results:

The Company has filed for a delay in its 10k

Estimated revenues increased 17.4% to $139.7 million for the year ended December 31, 2010 from $119.0 million in 2009
Estimated gross profit increased 18.9% to $102.7 million in 2010 from $86.4 million in 2009. Gross profit margin (gross profit as a percent of revenues) increased to 73.5% in 2010 from 72.6% in 2009.
Estimated income from operations increased 13.3% to $69.5 million in 2010 from $61.4 million in 2009.

Estimated adjusted non-GAAP net income in 2010, although not yet disclosed, is expected to exceed China Biologic's upper end of its guidance range of $34 million to $36 million for the year 2010. Adjusted non-GAAP net income is defined below.

The Company's estimated revenues of $139.7 million were 1.6% lower than its minimum revenues guidance of $142 million to $149 million, which was primarily due to lower than expected demand for human albumin resulting from unexpected high volume of lower-priced human albumin imports into China and less than expected direct institution sales from Dalin. The Company chose not to compromise the reputation of its high-quality products by reducing prices.

Mr. Chao Ming (Colin) Zhao, Chief Executive Officer of China Biologic, said, "We are pleased with our progress and good operating and financial results for 2010. We believe our acquisitions from 2008 and 2009 are starting to deliver the expected good performance.

"China Biologic's outlook for 2011 remains good, with China's economy continuing to expand. Higher health standards are among the government's priorities. And our plasma collection stations and processing facilities are in good locations and are operating at high standards.

"In addition, we have completed the development stages for two new products and expect their approval by China's State Food and Drug Administration in 2011."

Analyst Reports

Thu, 17 Mar 2011 04:00:00 GMT

Rodman and Renshaw on CBPO 3/16/2011

Long Term Potential but a Short-Term Bump

Key Points

China Biologic filed a Notification of Late Filing for 10K due to reevaluation of non-cash items by the newly appointed auditor, KPMG
Unaudited revenues in 2010 were $140MM, lower than our estimates of $147MM
Estimated adjusted non-GAAP net income in 2010 beat our estimates and beat the company’s upper end guidance
Top line growth may slow to 10% in 2011 (from 17%), in our opinion, but could rebound to 20% in 2012 and beyond
We maintain our Market Outperform rating but lower our 12-month target price from $17 to $16/share due to reduced anticipated free cash flow to equity

Big Four Costs Extra Time – But Worth the Waiting

China Biologic appointed KPMG as its independent auditor on December 22, 2010. It is a dedicated movement to provide high-standard financial reports. Reevaluation by KPMG on warrants and deferred tax liabilities has delayed the filing report.

Top Line Growth Slows Down in the Near Term…

China Biologic reported unaudited top line of $140MM in 2010, lower than our estimates of $147MM and slightly lower than the lower end of the company’s guidance of $142MM. Revenue decrease is due to increasing pricing pressure on albumin and IVIG. Imported albumin is taking market share with competitive pricing. Price of domestic albumin is expected to drop 25% in 2011. Meanwhile, IVIG is also losing pricing power and is expected to flatten out in 2011. Therefore, top line growth is anticipated to decline to 10% in 2011, in our view.

…but is Expected to Rebound in the Future

China Biologic recently obtained approvals to build two more plasma collection stations. Once completed, the company would own a total of 18 collection stations, increasing plasma collection capacity from 600 to 660 tons. These two stations are expected to have material contribution in 2012. Secondly, a new facility is expected to be built in 2011 – 2012 with a capacity of 1,000 tons (vs. the current 400 tons). Thirdly, launches of new products Factor VIII and PCC could have material contribution in 2012. Lastly, China Biologic is planning to sell an increased portion of its products directly to hospitals, bypassing distributors, in order to improve margins. The direct institutional sales are expected to become mature in 2012. Taken together, we project a 20% top line growth in 2012 and beyond

Valuation

We maintain our Market Outperform rating but lower the 12-month target price from $17 to $16 per share. The price target is derived from an NPV analysis of future cash flows with a 15% annual discount rate and a 5% terminal growth rate.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Investor Presentations

Mon, 07 Mar 2011 05:00:00 GMT

In connection with the distribution of presentation materials by China Biologic Products, Inc. ( at the Annual China Investment Conference held by Rodman & Renshaw and in anticipation of the planned presentations at the Rodman Conference and the 31st Annual Healthcare Conference held by Cowen and Company, LLC and the distribution of materials at the Cowen Conference, the Company is furnishing the information contained in this current report on Form 8-K in order to avoid the selective disclosure of any material nonpublic information at the Conferences.

Acquisitions

Tue, 11 Jan 2011 05:00:00 GMT

TAI'AN, China, Jan. 11, 2011 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. today announced that its wholly-owned PRC subsidiary, Logic Management Consulting (China) Co., Ltd. ("Logic China"), has agreed to acquire the remaining 10% ownership in Guiyang Dalin Biologic Technologies Co., Ltd. ("Dalin"), a limited liability company established under the laws of the People's Republic of China, from Mr. Shaowen Fan, a PRC individual, pursuant to an Equity Transfer Agreement, dated January 4, 2011, between Logic China and Mr. Fan, for a purchase price of RMB 50 million (approximately $7,530,120). Logic China already owns a 90% majority interest in Dalin, pursuant to an equity transfer agreement, dated September 26, 2008, among Dalin, Mr. Fan, and the other shareholders of Dalin at the time.

Analyst Reports

Tue, 11 Jan 2011 05:00:00 GMT

Rodman & Renshaw on CBPO 1/11/2011

Additional Grip to Maintain Controlling Interest

Key Points:

China Biologic acquired the remaining 10% ownership of Guiyang Dalin Biologic Technologies for $7.5MM.
The acquisition increased China Biologic’s ownership from 49% to 54% of Guiyang Qianfeng Biological Products, the operating subsidiary of Dalin.
Potential dispute of China Biologic’s controlling interest in Qianfeng still exists.
We maintain our Market Outperform rating with a $17 target price.

Increased Ownership to Retain Active Control

Dalin has 54% ownership of Qianfeng, one of the major plasma companies with an approximately 8% of total market share in China. After the acquisition, China Biologic retains its controlling interest in Qianfeng with increased equity of 54% from the previous 49%. With consolidated revenues, China Biologic is the largest non-government-owned plasma company in China.

Dispute on Potential Ownership Dealt in the Past

In May 2007, 9% of Qianfeng shareholders (Jie’an) disagreed with the majority shareholders on a $7.5MM capital raise and did not waive their rights of first refusal. Jie’an brought a law suit to claim additional shares, which could reduce Dalin’s equity interest in Qianfeng to 41.3% from current 54%. The high court of Guizhou ruled in favor of China Biologic and denied Jie’an’s claim in October 2010. Subsequently, Jie’an appealed to the Supreme Court in Beijing. Given previous court precedents, we believe China Biologic has a favorable chance to win the case and to retain its controlling interest in Qianfeng.

Potential Share Increase in Other Minority Interests

China Biologic has a 35% equity interest in Xi’an Huitian Blood Products. Given the track record of successful acquisitions, we believe the company is capable of executing additional equity increase on Huitian at an appropriate time for the right price.

Maintaining Our Market Outperform Rating and $17 Target Price

We maintain our projections, as well as Market Outperform rating and a 12 – month target price of $17 per share. The price target is derived from an NPV analysis with a 15% annual discount rate and a 5% terminal growth rate.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Acquisition Activity

Mon, 10 Jan 2011 05:00:00 GMT

Logic Management Consulting (China) Co., Ltd. entered into an equity transfer agreement, dated January 4, 2011, pursuant to which Logic China agreed to acquire the 10% minority interest in Guiyang Dalin Biologic Technologies Co., Ltd., a limited liability company established under the laws of the People's Republic of China, from Shaowen Fan, for a purchase price of RMB 50 million (approximately $7,530,120).

Investor Alert

Sun, 05 Dec 2010 05:00:00 GMT

Findings of the Special Committee

As previously reported, on January 27, 2010, in response to allegations appearing on certain financial websites of fraud and criminal activity of certain principals and affiliates of the Company and the legitimacy of the Company’s ownership of its Chinese operating subsidiary, Shandong Taibang Biological Products Co. Ltd. (“Shandong Taibang”), the Company established a special independent committee comprised of the Company's independent directors, Mr. Sean Shao and Dr. Tong Jun Lin (who were later joined by new director Dr. Xiangmin Cui) (the "Special Committee"), to investigate the allegations with the assistance of a reputable international firm, and report its findings to the board of directors as soon as practicable. On March 1, 2010, the Special Committee retained O'Melveny & Myers LLP, an international law firm, to advise the Special Committee and to assist in the investigation of the allegations. On November 26, 2010, the Special Committee reported to the Company’s board of directors concerning the investigation. In submitting its report, the Special Committee reported that the investigation had been constrained by substantial limitations on access to relevant official records from Chinese military and governmental authorities and the availability of other relevant information in China. Subject to these limitations, below is a summary of key findings of the Special Committee:

Allegations Regarding Seed Money – With respect to the allegations that Mr. Xiaowei Zhang, the former manager of Minfa Securities Company (“Minfa”) who is currently imprisoned in China for financial crimes including embezzlement of capital from Minfa, embezzled funds to provide the original seed capital for Taibang’s predecessor, Shandong Missile Biologic Products Co Ltd. (“Missile”), in 2002, the Special Committee could find no evidence that embezzled funds provided the seed capital for Missile. While the Special Committee found that Beijing Chen Da Technology Investment Co Ltd. (“Chen Da”), an entity owned and controlled by Minfa and a founding shareholder of Missile, had borrowed RMB 39.2 million from Minfa in connection with the establishment of Missile, from which Chen Da used RMB 19.2 million to acquire a 24% interest in Missile and loaned RMB 20 million to Dr. Zuying Du for him to acquire a 25% interest in Missile, none of the several Chinese judicial, law enforcement, and administrative authorities who examined the loan from Minfa to Chen Da during the subsequent criminal case against Xiaowei Zhang treated the loan as funds embezzled from Minfa.

Allegations Regarding Control of Company – With respect to allegations that Mr. Xiaowei Zhang continues to exercise control over the Company and/or Shandong Taibang, the Special Committee found that, while Feiguang Zhang, the brother-in-law of Xiaowei Zhang, is currently a deputy general manager of Shandong Taibang, and Lei Zhang, the nephew of Xiaowei Zhang, currently serves on the board of directors of Shandong Taibang, it could find no evidence that any of the current shareholders, inside directors, or officers of the Company currently act at the direction of, or for the benefit of, Xiaowei Zhang.

Allegations Regarding Du Claims – With respect to allegations that Mr. Zuying Du may bring actions challenging the validity of the Company’s ownership interest in Shandong Taibang in the future, the Special Committee reported that relevant available information obtained during its investigation, including certain records of past judicial and administrative proceedings and the personal accounts of certain relevant witnesses, tends to support the Company’s historical position in related litigation, as disclosed under the “Legal Proceedings” heading in applicable SEC filings, that Mr. Du’s claims against the Company lack merit underChinese law. The Special Committee further reported that, as of the date of its report, no administrative or judicial authority has issued any final, binding measure or order determining that the transfer of Mr. Du’s ownership interest to Chen Da was invalid under Chinese law.

Allegations Regarding Identity of Tung Lam – With respect to the allegation that Mr. Tung Lam, the Chief Executive Officer of one of the Company's primary operating subsidiaries, Shandong Taibang, and spouse of Mrs. Siu Ling Chan, the Company's board chair, was previously known as Mr. Lin Ziping and was imprisoned for smuggling in China, the Special Committee found evidence supporting Mr. Lam's denial of the allegation, as well as conflicting evidence with respect to this claim. As a result, the Special Committee concluded that it could neither confirm nor exclude the allegation.

Allegations Regarding Ze Qin Lin – With respect to the allegations that Mr. Ze Qin Lin, the husband of current CBPO director Ms. Lin Ling Li, is a former associate of Mr. Tung Lam and was imprisoned in China in connection with the same smuggling activities, the Special Committee found support for the allegation that Mr. Ze Qin Lin was sentenced to imprisonment in China in connection with smuggling offenses of Fuzhou Bonded Zone Western Industrial, Ltd.

Analyst Reports

Thu, 18 Nov 2010 05:00:00 GMT

Rodman & Renshaw on CBPO

Key Points:

China Biologic Products reported $36MM in revenues and $13.7 MM net income to controlling interest for 3Q10, or $0.53 per diluted share. Top line revenues are slightly higher than our estimate of $34MM, and the bottom line beats our adjusted estimate of $0.41 per diluted share.
Management reiterated guidance of $142MM - $149MM in revenue (19 - 25% organic growth) and adjusted net income of $34MM - $36MM for 2010.
Future growth potential could be driven by new product launches (2011), as well as expansion of plasma collection.
The company ended 3Q10 with a cash position of $64.6MM, an increase of $8MM from 2Q10.
We maintain our growth assumptions but increase 2010 revenues to $147MM from $145MM and EPS to $1.76 from $1.51, to reflect strong results in 3Q10.
We reiterate our Market Outperform rating with a $17 target price.

Strong Quarter, Scheduled Annual Maintenance Has Minimum Impact

During 3Q10, China Biologic Products suspended manufacturing as scheduled for approximate 45 days and 30 days, respectively, at two major operating facilities. This scheduled annual maintenance and inspection process, due to management’s careful planning – had a minimum impact on the company’s revenues. In 3Q10, the company experienced organic revenue growth of 33% year over year. Gross margins remained above 76%, although slightly lower than 78% in 2Q10. GAAP net income benefited from a $3.8MM non-cash gain related to the change of fair value of derivative liabilities. We continue to expect non-cash charges/gains to be incurred until these securities are converted into common stock.

Pricing Power Continues but Facing Future Pressure

Strong revenue in 3Q10 was due to price and volume increases. Sales of IVIG accounted for 36% of total revenue in 3Q10, which was partly attributable to a 27% price increase YoY. Hep B continues to enjoy 56% price increase in 3Q10 after experienced a 434% price increase in 2Q10. However, the company’s major product albumin (49% of total revenue) experienced 4.3% price decrease due to competition from imported albumin. Although sales volume increased, albumin revenue was flat in 3Q10. Human IgG also experienced 12% decrease in price. In our opinion, pricing power continues to contribute to growth in the near term. However, long term growth is driven by expanding plasma supply and introduction of new plasma products into Chinese market. We project annual sales of $147MM in 2010 and $254MM in 2013.

Reimbursement Awaits Government Decision

Over 85% of company’s sales are expected to be covered by National Insurance Catalog in China as Class B drugs. Unlike Class A drugs, which are reimbursed 100%, Class B drugs reimbursement policies are determined by each province. To date, the regional governments have not provided guidance on reimburse rate of each drug.

Allegation Investigation Under Process

China Biologic Products appointed the Special Committee of independent directors to investigate allegation against Mr. Lam, the CEO of the operating subsidiary Shandong Taibang. Special committee has not disclosed investigation process since its commencement in March 2010.

Maintaining Our Market Outperform Rating and $17 Target Price

We increased our revenue projection to $147MM in 2010 and $46MM in net income to the controlling interest ($36MM after adjusted for non-cash change in fair value of derivative liabilities) for 2010. We maintain our Market Outperform rating and a 12 – month target price of $17 / share. The price target is derived from an NPV analysis with a 15% annual discount rate and a 5% terminal value growth rate.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Comments & Business Outlook

Tue, 16 Nov 2010 05:00:00 GMT

Third Quarter 2010 Highlights

Revenues increased 33.2% period-over-period to $36.0 million.

Gross profit rose 36.1% period-over-period to $27.3 million, representing a gross margin of 75.9%, as compared to 74.3% a year ago.

Income from operations grew 34.2% to $18.8 million.

GAAP net income attributable to controlling interest was $13.7 million, or $0. 53 per diluted share, including a $3.8 millionnon-cash gain from change in the fair value of derivative liabilities.

Excluding the non-cash gain from change in fair value of derivative liabilities, interest on convertible notes and non-cash employee compensation, non-GAAP adjusted net income was $10.5 million or $0.39 per diluted share, a 48.7% increase from $7.1 million, or $0.33 per diluted share a year ago.

The Company established Ning Yang Taibang Plasma Company and Yi Shui Taibang Plasma Company in July 2010 for the purpose of operating two new plasma stations in Shandong Province, PRC.

"Our 2010 third quarter results were very strong, with 33.2% growth in revenues and 48.7% growth in adjusted net income, driven by robust demand and an overall favorable pricing environment for our plasma-based products," said Mr. Chao Ming Zhao, Chief Executive Officer of China Biologic. "During the quarter, we established two new plasma collection stations in Yishui and Ninyang counties in Shandong Province, and we expect to begin trial collections at the Yishui station by the end of the year and at the Ninyang station by early 2011. We expect that when these sites are at their full capacity, we will realize up to 80 metric tons of incremental plasma collection capacity."

2010 Guidance and Business Outlook

China Biologic reaffirms its guidance for 2010 of

revenues in the range of $142 million to $149 million.
adjusted net income between $34 million and $36 million.

Guidance for 2010 adjusted net income excludes any non-cash gain or loss related to change in the fair value of derivative liabilities, stock-based compensation expense and any adjustments in the U.S. federal income tax provision in 2010 related to the expiration of the look-through exception for Subpart F income on December 31, 2009, and excludes any acquisitions, new product approvals or operational impact from new plasma stations. The guidance also does not assume any material price or volume increases during the year.

Mr. Zhao added, "We believe that the results for the first nine months of 2010 reinforce the merits of China Biologic's strategy to acquire or build new locations, scale up our existing plasma infrastructure, and advance exciting products through our pipeline. From investing in strategic marketing to drive collection center donor volumes, to developing closer relationships with hospitals and inoculation centers, we intend to maximize the utilization of our growing plasma network. We expect that our strong balance sheet and solid operating cash flow will provide us with the resources to take advantage of opportunities created by rising consumer demand and tight supply conditions based on strict government regulation. On the research and development front, we continue to expect our applications for production of Human Prothrombin Complex Conentrate and Human Coagulation Factor VIII to be approved by the SFDA in early 2011. Heading into next year, we intend to leverage our expertise in the field to capitalize further on China's under-pentrated plasma market and build value for our shareholders."

Liquidity Requirements

Tue, 16 Nov 2010 05:00:00 GMT

Management believes that the Company has sufficient cash on hand and continuing positive cash inflow, from the sale of its plasma-based products in the PRC market. Our management expects continued growth in revenues throughout the term of the convertible notes, largely due to the ongoing limited supply of plasma-based products in the PRC market in connection with the introduction of more stringent health and safety measures which we already meet. In light of the foregoing, we believe that we will have the financial ability to fulfill our payment obligations under the convertible notes when they come due.

Comments & Business Outlook

Mon, 16 Aug 2010 04:00:00 GMT

Second Quarter 2010 Highlights

Revenues increased 23.3% year-over-year to $40.9 million.
Gross profit rose 32.6% year-over-year to $31.8 million, representing a gross margin of 77.9%, as compared to 72.4% a year ago.
Operating income grew 37.7% to $22.8 million.
GAAP net income attributable to controlling interest was $12.9 million, or $0.49 per diluted share, including a $2.3 million non-cash gain from change in the fair value of derivative liabilities.
Excluding the non-cash gain, interest on convertible notes and non-cash employee compensation, non-GAAP adjusted net income was $10.9 million or $0.41 per diluted share, a 31.2% increase from $8.3 million or $0.38 per diluted share a year ago

"Our second quarter results were very strong, with 23.3% growth in revenues and 31.2% growth in adjusted net income, primarily driven by robust demand and a favorable pricing environment for our plasma-based products," said Mr. Chao Ming Zhao, Chief Executive Officer of China Biologic. "We are moving forward with establishing our two new plasma collection stations in Yishui and Ninyang counties in Shandong Province, and expect to begin trial collections at the new locations by the end of the year. We also increased our focus on marketing and educational medical conferences in the second quarter, as part of our strategy to strengthen our ties with hospitals and clinics, since we believe that direct sales to these customers can secure our market share and support our long-term growth."

2010 Guidance and Business Outlook

China Biologic maintained its guidance for 2010:

Revenues in the range of $142 million and $149 million.
2010 adjusted net income in the range of $34 million and $36 million.

As part of its scheduled annual maintenance and inspection process, the Company shut down its facility in Qianfeng for approximately 45 days in June and July and its Taibang facility for 30 days beginning in late July. Due to careful planning of production and inventories, this is expected to have minimal impact to the company's revenue generation.

Comments & Business Outlook

Tue, 23 Mar 2010 04:00:00 GMT

China Biologic expects 2010 revenue to be in the range of $142 million to $149 million vs $119 million in 2009. This guidance assumes only organic growthand does not include and excludes acquisitions or approval for the construction of new plasma collection stations. The guidance does not assume any material price or volume increases during 2010.

The Company expects 2010 non-GAAP^a net income to be in the range of $34 million to $36 million vs. $31.3 million in 2009.

As a matter of policy, the Company does not intend to update this guidance during the year.

Source: PR Newswire (March 23, 2010)

GeoBargain Notes

Tue, 26 Jan 2010 05:00:00 GMT

Recall that CBPO was added to Geo Bargain list on April 27, 2009. ($4.15).

Earlier today we removed CBPO from the GeoBargain list due to an opinionated blog insinuating that members of the management team have been involved in fraudulent activities. The author of the blog is short the stock, so it’s clearly a biased opinion.

The allegations are not new, but the stock reacted as if they were. Funny that there were no pot shots at the financials. We still like the company and will keep the stock on the GeoBargain on the Radar List until we receive clarification on this matter. Until the resolution, investing in CBPO is not worth the risk as we have plenty of non controversial stocks to choose from, especially during this market pull back.

GeoBargain Notes

Mon, 16 Nov 2009 05:00:00 GMT

China Bio Products reported third quarter results.

Qtr. Ended March	3rd Quarter 2009	3rd Quarter 2008	Period Change
GAAP Revenue	$26.9 million	$13.8 million	94.9%
GAAP EPS	-$0.29	$0.21	n/a
Company Supplied Non-GAAP EPS	$0.33	$0.21	36.4%
Fully Diluted Shares	21.6 million	21.5 million	0.0%

Source: PR Newswire (November 16, 2009)

Investors may not initially view this quarter enthusiastically as GAAP EPS appear weak. But after adding back one time charges to net income CBPO reported a much more favorable non-GAAP EPS comparison, which is what we will choose to focus on.
^a Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items contained in the company's filings. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.

Comments & Business Outlook

Mon, 16 Nov 2009 05:00:00 GMT

2009 Third quarter discussion per SEC 10Q filing

The continuing price increase of our products since 2008 was primarily attributable to the government’s stringent control on the quality standard of the plasma-based production industry, which resulted in a shortage in the supply of finished products. We were able to adjust our production plan to take advantage of the limited market supply of plasma resources to realize higher profit margins. In addition, there is a shortage in the market supply for human albumin products which has increased the value of our products in the market place. The plasma-based industry has been immune from the impact of the on-going global financial crisis as the demand for our products has out-paced supply. As a result, our selling price, cost of revenue and operating expenses during the third quarter of 2009 were not impacted by the global financial turmoil. With the acquisition of Dalin, and its operating subsidiary Qianfeng, we are better situated to serve our existing and new customers with expanded production capacity and market coverage. Our management expects that our revenue growth will remain strong for the remainder of 2009.

Potential Valuation Scenarios

Tue, 18 Aug 2009 04:00:00 GMT

Valuation Scenarios

Added to Geo Bargain list on April 27, 2009. ($4.15).

Data Inputs:

Fiscal Year Ends in December
2008 Tax-Adjusted non-GAAP EPS: $0.50 (previous calculation was $0.54)

Date	5/15/09	5/19/09	8/17/09
Price	$3.90	$4.12	$4.35
12 Months Trailing EPS ^a	$0.54	$0.64	$0.68
2009 Implied EPS Average Company Guidance ^a,b	$0.81	$0.81	$0.81
2009 Implied EPS Growth Rate Based Average Company Guidance ^a,b	50%	50%	50%
Trailing P/E Ratio ^a	7.22	6.44	6.40
PEG Ratio (P/E divided by growth rate)	0.14	0.13	0.13

^a CBPO does not pay a full U.S. tax rate. Therefore, all EPS numbers have been adjusted by the GeoTeam® to reflect an average marginal tax rate of 36%. EPS are Non-GAAP figures and excludes non-cash compensation expense. EPS number are non-GAAP. Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.

^b. The company issued net income guidance of $18 million to $22 million, but did not provide EPS guidance. The GeoTeam® used the March 31, 2009 outstanding share count of 21,434,942 to calculate an implied 2009 EPS figure. The lack of EPS guidance may cause some investors to infer that dilutive events are expected to occur in the near future. However, per the 10K page 45, it appears that the company does not need to raise cash via a capital raise:

"With the bank credit facilities that are available to us and other financing activities, we expect that cash on hand, funds generated from our operations and funds generated from companies that we may acquire in the future will be sufficient to satisfy our current and future commitments for at least the next twelve months."

Short-Term Valuation Scenarios

Date	5/15/09	5/19/09	8/17/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$13.50	$16.00	$17.00
Price Based on P/E of 20 on Four Quarters Trailing EPS	$10.80	$12.80	$13.60
Price Based on P/E of 15 on 2009 Implied EPS Average Company Guidance ^a,b	$12.15	$12.15	$12.15

Long-Term (12 Months Forward) Valuation Scenarios

Date	5/15/09	5/19/09	8/17/09
Price Based on P/E of 25 on 2009 Implied EPS Average Company Guidance ^a,b	$20.25	$20.25	$20.25
Price Based on P/E of 20 on 2009 Implied EPS Average Company Guidance ^a,b	$16.20	$16.20	$16.20

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

GeoBargain Notes

Tue, 18 Aug 2009 04:00:00 GMT

China Bio Products reported 2009 second quarter financial results well above the GeoTeam's internal expectations.

Revenues increased 178.2% year-over-year to a record $33.2 million
Non-GAAP EPS increased 151.5% to $0.38 per diluted share.
Non-GAAP EPS increased 90% from the 2009 first quarter.

The GeoTeam® participated on China Bio Products 2009 second quarter conference call. Overall the call was bullish. CBPO showed impressive internal growth even if the contribution from a recent acquisition are omitted. On the call the company maintained guidance.

See Updated Financial Tables
See Updated Valuation Scenarios

Financials

Tue, 18 Aug 2009 04:00:00 GMT

SECOND QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED JUNE

	Second Quarter 2009	Second Quarter 2008	Period Change
GAAP Revenue	$33.2 million	$18.6 million	178.2%
GAAP EPS	$0.32	$0.09	255.6%
Company Supplied Non-GAAP EPS^a	$0.38	$0.15	151.5%
Tax Rate	20.9%	43.2%	-51.6%
Fully Tax-Adjusted Non-GAAP EPS^b	$0.26	$0.15	73.3%
Fully Diluted Shares	21,434,942	21,946,168	-2.3%

Source: See Release, August 17, 2009

FIRST QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED MARCH

	First Quarter 2009	First Quarter 2008	Period Change
GAAP Revenue	$21.1 million	$32.4 million	169.4%
GAAP EPS	$0.20	$0.10	100.0%
Geo Supplied Non-GAAP EPS^a	$0.22	$0.10	120.0%
Tax Rate	21.9%	20.5%	6.7%
*Fully Tax-Adjusted* Geo Supplied *Non-GAAP EPS*^b	$0.15	$0.08	87.5%
Fully Diluted Shares	21,434,942	21,946,168	-2.3%

Source: See Release

FULL YEAR 2008 vs. 2007 FINANCIAL SNAPSHOT ENDED DECEMBER

	Full Year 2008	Full Year 2007	Period Change
GAAP Revenue	$46.8 million	$32.4 million	44.4%
GAAP EPS	$0.56	$0.37	46.5%
Company Supplied Non-GAAP EPS^a	$0.62	n/a	n/a
Geo Supplied Non-GAAP EPS^a	$0.65	$0.39	66.7%
Tax Rate	23.1%	16.6%	39.2%
Fully Tax-Adjusted Geo Supplied Non-GAAP EPS^b	$0.50	$0.28	78.6%
Fully Diluted Shares	21,556,342	21,861,014	-1.4%

^a EPS Figures exclude non-operating gains and losses. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information.For a more complete explanation of the company's definition of non-GAAP please refer to their fourth quarter financial press release.

^b For valuation purposes, The GeoTeam® prefers to adjust EPS to reflect a standard United States tax rate of 36%

Source: See Release

Potential Valuation Scenarios

Wed, 20 May 2009 04:00:00 GMT

Valuation Scenarios

Data Inputs:

Fiscal Year Ends in December

Date	5/15/09	5/19/09
Price	$3.90	$4.12
12 Months Trailing EPS ^a	$0.54	$.64
2009 Implied EPS Average Company Guidance ^a,b	$0.81	$0.81
2009 Implied EPS Growth Rate Based Average Company Guidance ^a,b	50%	50%
Trailing P/E Ratio ^a	7.22	6.44
PEG Ratio (P/E divided by growth rate)	0.14	.13

Short-Term Valuation Scenarios

Date	5/15/09	5/19/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$13.50	$16.00
Price Based on P/E of 20 on Four Quarters Trailing EPS	$10.80	$12.80
Price Based on P/E of 15 on 2009 Implied EPS Average Company Guidance ^a,b	$12.15	$12.15

Long-Term (12 Months Forward) Valuation Scenarios

Date	5/15/09	5/19/09
Price Based on P/E of 25 on 2009 Implied EPS Average Company Guidance ^a,b	$20.25	$20.25
Price Based on P/E of 20 on 2009 Implied EPS Average Company Guidance ^a,b	$16.20	$16.20

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Comments & Business Outlook

Wed, 20 May 2009 04:00:00 GMT

Full Year 2009 Guidance

	Full Year 2009 Guidance	Full Year 2008	Period Change
GAAP Revenue	$90 to $100 million	$47 million	91.5 to 113%
Non-GAAP Net Income ^a	$18 to $22 million	$13 million	38.5% to 69.2%
Non-GAAP EPS ^b	$.93	$.62	50.0%
Fully Diluted Shares ^b	21,434,942	21,861,014	-1.9%

Source: See Release

^bThe company issued net income guidance of $18 million to $22 million, but did not provide EPS guidance. The GeoTeam® used the March 31, 2009 outstanding share count of 21,434,942 to calculate an implied 2009 EPS figure. The lack of EPS guidance may cause some investors to infer that dilutive events are expected to occur in the near future. However, per the 10K page 45, it appears that the company does not need to raise cash via a capital raise:

"With the bank credit facilities that are available to us and other financing activities, we expect that cash on hand, funds generated from our operations and funds generated from companies that we may acquire in the future will be sufficient to satisfy our current and future commitments for at least the next twelve months."

Potential Valuation Scenarios

Thu, 14 May 2009 04:00:00 GMT

Valuation Scenarios

Data Inputs:

Fiscal Year Ends in December

Date	5/15/09
Price	$3.90
12 Months Trailing EPS ^a	$0.54
2009 Implied EPS Average Company Guidance ^a,b	$0.81
2009 Implied EPS Growth Rate Based Average Company Guidance ^a,b	50%
Trailing P/E Ratio ^a	7.22
PEG Ratio (P/E divided by growth rate)	0.14

Short-Term Valuation Scenarios

Date	5/15/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$13.50
Price Based on P/E of 20 on Four Quarters Trailing EPS	$10.80
Price Based on P/E of 15 on 2009 Implied EPS Average Company Guidance ^a,b	$12.15

Long-Term (12 Months Forward) Valuation Scenarios

Date	5/15/09
Price Based on P/E of 25 on 2009 Implied EPS Average Company Guidance ^a,b	$20.25
Price Based on P/E of 20 on 2009 Implied EPS Average Company Guidance ^a,b	$16.20

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Research

Mon, 04 May 2009 04:00:00 GMT

GeoNuggets - Quick Check List Highlighting Undiscovered Opportunities

China Bio Products Inc. (OTCBB:CBPO)

Company Description: China Bio Products is principally engaged in the research, development, production and manufacturing and sale of plasma-based biopharmaceutical products to hospitals and other health care facilities in China. The Company's human albumin products are mainly used to increase blood volume and its immunoglobulin products are used for the treatment and prevention of diseases.

Price (5/01/09): $3.75
Trailing P/E: 6.94 ^a

Fiscal Year Ends In December

12 Months trailing Non-GAAP EPS (tax adjusted ): $0.54 ^a
Average Company Non-GAAP EPS Guidance for 2009 (tax adjusted): $0.81 ^a,b

^a. All EPS numbers have been adjusted by the GeoTeam to reflect a United States standard tax rate. Non-GAAP figures excludes non-cash compensation expense

Reasons for optimism

1. The company meets nine out of ten GeoBargain categories.

	Recent 52-week high The stock has recently attained a new 52-week high.
	30% EPS growth rate Earnings per share (EPS) grew 62.6% in 2008.
	10% revenue growth 2008 Revenues grew 44%.
	Strong balance sheet The company meets two of three requirements. Debt to Equity Ratio is 16% (The GeoTeam prefers less than 20%). The company is Cash Flow Positive. Current Assets to Current Liabilities is a little light at 1.3 to 1 (The GeoTeam prefers less than 2 to 1)
	15% ROE Tax adjusted 2008 Return on Equity (ROE) was at 30%.
	The company is seeking to ultimately achieve minimum pre-tax operating margins of 8%. 2008 adjusted (Non-GAAP) pre-tax margins were 45%.
	Under 50 million shares The company currently has 21,434,942 shares outstanding.
	High insider ownership All officers and directors as a group own 63.7% of company stock.
	Limited institutional ownership
	Peg Ratio (P/E / EPS Growth Rate) is less than 1 PEG Ratio based on 2008 tax adjusted EPS growth rate is .08.

2. The recent Acquisition of a 90% Controlling Interest in Chongqing Dalin Biologic Technologies Co., Ltd. makes China Biologic the largest non-state-owned producer of plasma- based biopharmaceutical products in China. This development strengthens their already solid competitive advantage, especially in light of the limited supply of plasma sources in China.

3. "The plasma-based industry has been immune from the impact of the ongoing global financial crisis as the demand for the products has out-paced supply."

4. The current regulatory requirements to participate in the China biopharmaceutical industry poses a barrier to entry, limiting the competitive landscape.

5. The company is forecasting revenue to increase between 93% and 114% ($90 million to $100 million), while adjusted net income is forecasted to rise between 35% and 65% ($18 million to $22 million). This guidance assumes the successful integration of the Chongqing Dalin Biologic Technologies transaction as well as the completion of one more pending acquisition.

Potential valuation scenarios if the company can achieve its EPS growth goals.

Potential value based on fully taxed adjusted nom-GAAP trailing EPS ^a

o  P/E 15* $0.54= $8.10
o  P/E 20* $0.54= $10.80
o  P/E 25* $0.54= $13.5

Potential value based on fully taxed adjusted 2009 Average Company Non-GAAP EPS Guidance ^a,b

o P/E 10* $0.81 = $8.00
o P/E 15* $0.81= $12.15

These scenarios are not intended to be investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Comments & Business Outlook

Wed, 07 Jan 2009 05:00:00 GMT

Guidance Update:

	2009	2008
Revenues	$90M to $100M	$48M to $50M
Net Income	$18M to $22M	$9M to $10M

The company did not provide EPS guidance. Thus, investors may infer that dilutive events are expected to occur in the near future. However, per the third quarter report page 34, it appears that the company does not need to raise cash via a capital raise:

"Overall, we believe that cash flow from our operating activities and the existing credit facilities available to us should be adequate to sustain our operations at current levels through the next twelve months."

A clarification of this situation is needed. The GeoTeam^® would urge the company to issue address whether shares outstanding will remain stable in 2009. If shares do remain stable 2009 tax adjusted net income guidance would be around $17 million ($.77), implying a forward P/E of only 2.6.

Source: PR Newswire (November 12, 2008)

GeoSpecial Notes

Thu, 11 Sep 2008 04:00:00 GMT

China Bio Product Inc. has released it's September 2009 Investor Presentation