China Marine Food (CMFO) research, news, and more from GeoInvesting

Company description

Thu, 23 Apr 2009 04:00:00 GMT

China Marine Food Group Ltd. manufactures and distributes processed seafood products, and fresh and frozen marine catch to five provinces in the PRC. Founded in 1994, China Marine has grown steadily and positioned its 'MingXiang(R)' brand as a category leader in 1,300 retail sales points in the PRC. The Company has received 'The Famous Brand' and 'Green Food' awards. Located in the Fujian Province, it is one of the largest coastal provinces in the PRC and a vital navigation hub between the East China Sea and the South China Sea. The Company is committed to the highest standard of quality control with the ISO9001, ISO14001, HACCP certification and the EU export registration.

Comments & Business Outlook

Fri, 11 Nov 2011 05:00:00 GMT

ThirdQuarter 2011Results
	Q3 2011	Q3 2010	CHANGE
Net Sales	$30.9 million	$22.7 million	+36.4%
Gross Profit	$7.7 million	$8.3 million	-7.5%
Net Income	$0.8 million	$4.2 million	-80.6%
Diluted EPS*	$0.03	$0.14	-78.6%
Adjusted Net Income**	$2.0 million	$4.8million	-57.1%
Adjusted Diluted EPS**	$0.07	$0.16	-56.3%

"I was pleased to see a stabilization in our snackfood business since the middle of the second quarter and our growth of snackfood sales and Hi-Power through our third quarter," exclaimed Mr. Pengfei Liu, Chairman and CEO of China Marine. "As a result of increased marketing support and food safety advertising for Mingxiang® foods, our seafood snack sales grew by 7.6% from the second to the third quarter, with sales in Fujian Province growing by 16.9%. "Hi-Power" sales were robust, signifying that our investments in advertising and marketing have yielded positive results. As we see more reorders and expect to selectively add new distributors, we believe "Hi-Power" sales are poised to maintain very solid growth into 2012."

2011 Guidance:

Based on current market demand, Management is reiterating full year 2011 financial guidance as follows:

	Projections	% Change vs 2010
Consolidated Revenues:	$130+ million	+5.9%
Consolidated Adjusted Net Income:	$14.8 million	-37.0%
Adjusted Diluted EPS:	$0.50	-38.3%

Comments & Business Outlook

Mon, 26 Sep 2011 04:00:00 GMT

SHISHI, China, September 26, 2011 /PRNewswire-Asia-FirstCall/ -- China Marine Food Group Limited (NYSE Amex: CMFO) ("China Marine" or the "Company"), a China-based manufacturer of Mingxiang(R) seafood-based snack foods, "Hi-Power" marine algae-based beverages, and distributor of frozen marine catch, today provided an update on its Mingxiang(R)-branded seafood snacks business. The Company reported sales in August of $4.6 million, an approximate 4.0% increase from $4.4 million in the previous month.

Beginning in the second quarter of 2011, sales of the Company's seafood snacks were negatively impacted by consumers' concerns stemming from the nuclear disaster in Japan and the safety of ocean-based products. China Marine has taken several actions to alleviate those concerns including increased advertising and more frequent communications with its distribution partners. Sales have stabilized since June, with month-over-month data showing positive sales trends and a return of consumer confidence in July and August.

The Company is also in discussions with prospective distributors in new and existing regions sales territories. Management is committed to expanding distribution to untapped cities and provinces as a long term goal.

"We are pleased to report our seafood snack food sales have steadily improved since June," stated Chairman and CEO, Mr. Pengfei Liu. "Because we source our fish from several local areas completely unaffected by the disaster in Japan, we remain confident in the long-term health of our business and anticipate a full recovery of sales momentum for Mingxiang(R)-branded seafood snack foods. I am also encouraged with the progress we have made with our seaweed extract 'Hi-Power' beverages. Through effective in-store promotions and multimedia advertising campaigns, more consumers are buying our healthy beverages."

Comments & Business Outlook

Mon, 08 Aug 2011 04:00:00 GMT

Second Quarter 2011 Highlights

Seafood snack sales down 30.8% as a result of temporary drop in seafood consumption in China stemming from Japan reactor incident in March. Company reports monthly sales from June through August have been stabilized and moderately improved as consumer confidence returns.
"Hi-Power" revenues grew 10.7% year-over-year to $8.6 million.
Expanded "Hi-Power" sales force to 172 people and distribution to approximately 15,000 locations.
$27.0 million in operating cash flow during the first six months of 2011 ended June 30, 2011, with $38.3 million in cash and cash equivalents.

Financial Summary

Second Quarter 2011 Results
	Q2 2011	Q2 2010	CHANGE
Net Sales	$22.1 million	$27.6 million	-19.9%
Gross Profit	$7.2 million	$10.2 million	-29.9%
Net Income	$1.0 million	$6.8 million	-85.2%
Diluted EPS*	$0.03	$0.23	-87.0%
Adjusted Net Income**	$2.2 million	$7.4 million	-70.4%
Adjusted Diluted EPS**	$0.07	$0.25	-72.0%

"Our second quarter results were negatively impacted by several short-term factors," stated Mr. Pengfei Liu, Chairman and CEO of China Marine. "Sales of our seafood snacks dropped unexpectedly due to consumers' concerns regarding the safety of ocean-based products following the Japan nuclear disaster in March of this year. Though we reported our feed stocks were not affected by radiation levels, consumer demand was the ultimate vote on this subject. We believed our two major stated-owned competitors have also experienced a similar impact on their sales. While we cannot accurately predict the duration of this temporary aversion to seafood, we are encouraged by the month-over-month sales improvement in July and order bookings for shipments in August. We will continue to invest in our brand and distribution to ensure we are well-positioned for sustained growth when consumer confidence normalizes."

Revised 2011 Guidance:

As a result of the Company's view that consumer demand for seafood products will not fully recover in the 2011 calendar year, China Marine has adjusted its previously stated guidance in March of 2011. While revenues are expected to increase as a result of increased marine catch sales and "Hi-Power" sales, the mix of products margins and the Company's continued marketing and advertising costs have also contributed to an adjustment in its 2011 guidance.

	Projections	% Change vs 2010
Consolidated Revenues:	$130+ million	+5.9%
Consolidated Adjusted Net Income:	$14.8 million	-37.0%
Adjusted Diluted EPS:	$0.50	-38.3%

"While business cycles impact most industries, we have show sequential year-over-year growth for 16 years. We could not anticipate the confluence of a downturn in seafood demand as a result of a major international incident and the replacement of non-performing distributors coinciding at the same time," stated Chairman and CEO Pengfei Liu. "We have begun to see a positive trend in the sales of our seafood products by the end of second quarter. This is further substantiated by the continued moderate growth in the months of July and August for which we already have our August order backlog in hand. We are pleased with further progress with Hi-Power and expect to gain additional market share in Zhejiang province."

Comments & Business Outlook

Thu, 30 Jun 2011 04:00:00 GMT

SHISHI, China, June 30, 2011 /PRNewswire-Asia-FirstCall/ -- China Marine Food Group Limited (NYSE Amex: CMFO) ("China Marine" or the "Company"), a China-based manufacturer of Mingxiang® seafood-based snack foods, "Hi-Power" marine algae-based beverages, and distributor of frozen marine catch, today provided an update on its two business segments.

China Marine continues to experience solid growth in its Hi-Power algae-based beverages. Increased marketing activities have resulted in growing brand recognition and repeat orders in Fujian province. To increase geographic penetration, the Company has also expanded into the Zhejiang province through a distributor who services the Wenzhou area. The initial focus has been on stocking restaurants and canteens, with approximately 600 points of sales established to date. The Company has launched various marketing initiatives to build brand awareness and anticipates signing additional distributors in the near term. Management has been encouraged by consumer feedback and sell through has been robust.

Sales of the Company's seafood products have been adversely affected by consumers' perception of safety in relation to the nuclear disaster in Japan. Softness in sales that began in late March has persisted through the second quarter of 2011. While China Marine is confident the seafood it uses to produce Mingxiang® snack foods are safe, it is unclear how long it will take for consumer confidence in seafood products to normalize. Management will provide a detailed update when it reports its second quarter 2011 results.

"The long term fundamentals of our businesses remain strong and we are committed to continually investing behind our brands," stated Chairman and CEO, Mr. Pengfei Liu. "While we believe that these sales disruptions in our seafood products are temporary, we are working diligently to ensure the safety of our products to our customers and distributors. Hi-Power continues to gain traction and the product diversification clearly benefit the shareholders at times such as this."

Comments & Business Outlook

Tue, 10 May 2011 04:00:00 GMT

Financial Summary


First Quarter 2011 Results
	Q1 2011	Q1 2010	CHANGE
Net Sales	$26.7 million	$19.7 million	+35.7%
Gross Profit	$9.6 million	$6.6 million	+45.5%
Net Income	$5.6 million	$3.9 million	+43.1%
Diluted EPS*	$0.19	$0.16	+18.8%
Adjusted Net Income**	$6.2 million	$4.5million	+38.0%
Adjusted Diluted EPS**	$0.21	$0.18	+16.7%
* EPS calculated for the period is based on 29.0 million shares on March 31, 2011 versus 25.0 million shares reported on March 31, 2010. ** Adjusted Net Income and Diluted EPS are non-GAAP calculations and do not include $0.6 million of non-cash, amortization of intangible assets related to the Company's acquisition in Q1 2011 and Q1 2010, respectively. For more information about the non-GAAP financial measures contained in this press release, please see "About Non-GAAP Financial Measures" below.

Geoteam® Note: 2011 First quarter analyst EPS estimates were $0.17.

"Our first quarter results reflect strong demand for our seafood snacks and 'Hi-Power' beverages," began Mr. Pengfei Liu, Chairman and CEO of China Marine. "We made solid progress by expanding distribution for 'Hi-Power' to 14,000 retail points in total. By penetrating more retail outlets, winning a broad customer base and supporting this expansion with enhanced brand building advertisements and marketing, we expect to maintain strong organic sales growth."

Business Updates:

2011 Guidance

	Projections	% Change
Consolidated Revenues:	$150+ million	+22.3%
Consolidated Adjusted Net Income:	$27.3 million	+16.1%
Adjusted EPS:	$0.93	+14.8%

Comments & Business Outlook

Fri, 18 Mar 2011 04:00:00 GMT

SHISHI, China, March 18, 2011 /PRNewswire-Asia/ -- China Marine Food Group Limited today responded to shareholder concerns over possible radiation contamination of its seafood supplies.

　"Our supplies of raw fish and seafood come from the Taiwan Strait, which is located between Taiwan and Fujian Province, China and thus pose no threat of contamination. In addition, this area maintains a separate ocean current from those of the East Japan Sea. According to the nuclear radiation-monitoring station in Shanghai, large-scale and long-distance radiation spread is unlikely as the primary containment vessel and fuel rods in the nuclear plant in Japan were not damaged. Under the current circumstances, only those residents within 110 miles of the nuclear plant will be affected," stated Mr. Pengfei Liu, CEO and Chairman of China Marine.

"Furthermore, there has been no disruption in the buying pattern of our customers and we do not anticipate one will occur," Mr. Liu concluded.

Comments & Business Outlook

Thu, 03 Mar 2011 05:00:00 GMT

Results for the Year:

Gross profit was $37.5 million, an increase of 95.8% from $19.1 million in 2009
Operating income for the twelve months of 2010 was $25.3 million, with operating margin of 20.7%, a 56.8% year-over-year increase from $16.2 million a year ago
Year-to-date 2010 GAAP net income was $21.1 million, compared to $14.6 million in the prior year's corresponding period, a 45.1% increase. Excluding the non-cash charge of $2.4 million associated to the amortization costs of the "Hi-Power" acquisition,
adjusted net income for the full year was $23.5 million and exceeded management expectations of $21.5 million in adjusted net income.
GAAP earnings per weighted average diluted shares were $0.73 based on 29.0 million fully diluted shares, while adjusted non-GAAP earnings per share were $0.81 for the twelve months period ended December 31, 2010

"2010 was a transformational year for China Marine for several reasons," began Mr. Pengfei Liu, Chairman and CEO of China Marine. "First, we entered a new growth business by acquiring 'Hi-Power' beverages in January of 2010. After incorporating improved labeling and packaging, 'Hi-Power' sales exceeded our expectations during its first year where we only penetrated the Fujian market. For the two years leading up to our 'Hi-Power' acquisition, we targeted a complementary marine-based business and this turned out to be the perfect fit. This high margin business will provide further growth in 2011 and remain an important component of our financial results for years to come."

Financial Summary


Fourth Quarter 2010 Results
	Q4 2010	Q4 2009	CHANGE
Net Sales	$52.8 million	$24.9 million	+112.2%
Gross Profit	$12.3 million	$5.8 million	+111.3%
Net Income	$6.2 million	$4.4 million	+42.9%
Diluted EPS*	$0.21	$0.18	+16.7%
Adjusted Net Income**	$6.8 million	$4.4 million	+56.7%
Adjusted Diluted EPS**	$0.24	$0.18	+33.3%


Full Year 2010 Results
	FY 2010	FY 2009	CHANGE
Net Sales	$122.7 million	$69.6 million	+ 76.3%
Gross Profit	$37.5 million	$19.1 million	+ 95.8%
Net Income	$21.1 million	$14.6 million	+ 45.1%
Diluted EPS*	$0.73	$0.60	+ 21.7%
Adjusted Net Income**	$23.5 million	$14.6 million	+ 61.4%
Adjusted Diluted EPS**	$0.81	$0.60	+ 35.0%

2011 Guidance

Revenues: $150.0+ million

Adjusted Net Income: $27.3 million

Liquidity Requirements

Thu, 03 Mar 2011 05:00:00 GMT

We believe that after taking into account of our cash position, available bank facilities and cash generated from operating activities, we have adequate working capital to satisfy our current operating expenditures for the next twelve months. From time to time, we may identify new expansion opportunities for which there will be a need to use cash. We manage our cash based on thorough consideration of our corporate strategy as well as the macro economic situation. Factors we take into account when managing our cash include interest rates, foreign currency fluctuation as well as the flexibility in executing our acquisition strategy.

We are currently building the cold storage facilities adjacent to the fishing port with a capacity of approximately 20,000 tons, to take advantage of its proximity to the port where we obtain fresh marine catch to be processed into seafood products. We intend to finance the total estimated $20.0 million in land use rights and construction costs from available funds and expect to run the new facility in the second half of 2011. We have paid approximately $11.6 million in relation to the construction costs as at December 31, 2010 so as to secure the overall construction costs associated with the cold storage facilities.

After the registered direct offering of common stock and repayment of bank loans during 2010, the relative cost of capital resources decreased correspondingly given the increase in the equity financing and reduced level of debt borrowings.

Apart from the expansion plan discussed above and the commitments set out in the section of “Commitments and Contingencies” herein, we do not have any other material commitments for capital expenditures and other expenditures. We believe that the current operating activities would be able to generate adequate cash flows supporting the daily operations. We do not have any further fund raising plan at the moment

Comments & Business Outlook

Tue, 18 Jan 2011 05:00:00 GMT

SHISHI, China, Jan. 18, 2011 /PRNewswire-Asia-FirstCall/ -- China Marine Food Group Limited today announced $3.2 million of Hi-Power beverage sales for the month ended December 31, 2010.

Sales of China Marine's "Hi-Power" beverages were approximately $26.0 million for the year ended December 31, 2010, exceeding previous company guidance of $23.0 to $25.0 million, driven by strong orders from current distributors as well as sales and marketing efforts on increasing new customer trials and brand awareness in the approximately 13,000 retail locations where "Hi-Power" beverages are sold. In December of 2010, the Company successfully expanded their retail locations by approximately a thousand stores.

Comments & Business Outlook

Wed, 01 Dec 2010 05:00:00 GMT

China Marine Food Group Limited today announced strong sales of its "Hi-Power" beverages during October and November 2010.

Sales of China Marine's "Hi-Power" beverages were $2.5 million and $3.0 million in October and November, respectively, driven by strong re-ordering from current distributors. The Company has focused its sales and marketing efforts on increasing new customer trials and brand awareness in the approximately 12,000 retail locations where "Hi-Power" beverages are sold.

"We are pleased with the results from our focused marketing efforts and effective promotions," began Pengfei Liu, Chairman and CEO of China Marine. "As an emerging beverage company in China, enticing shoppers to make initial purchases is vital to building a loyal consumer base. Such promotions have been successfully deployed with our distributors since we re-launched "Hi-Power" with new packaging and positioning as a healthy beverage in January of 2010. We have received steady re-orders from our "Hi-Power" distributors over the past two months and also witnessed healthy growth in our snack food business in the fourth quarter. We anticipate a strong finish to 2010," Liu concluded.

Analyst Reports

Wed, 24 Nov 2010 05:00:00 GMT

Global Hunter on CMFO (Update October 20, 2010)

Summary:

China Marine Food Group (CMFO) announced that it generated $2MM in sales of Hi-Power beverage for the month of September and raised its FY10 guidance for the drink to $23MM-$25MM from the prior $20MM, which we view as achievable. We attended the company’s Investor Day on 9/30 and came away with a positive impression of its operations and marketing campaigns. Following our visit and the company's announcement today, we are adjusting our estimates to reflect higher sales of Hi-Power beverage, higher marine catch trade expected in Q4, as well as increased marketing expenses. We continue to expect the company to deliver strong growth in the next two years given the consumer demand and distribution network expansion. Shares are trading at 7.6x and 6.0x our FY10 and FY11 EPS, respectively. We reiterate our Buy rating and $10 price target.

Highlights

Hi-Power beverage FY10 guidance raised. CMFO announced Wednesday morning that it expected the sales of its algae-based health drink, "Hi-Power", to be in the range of $23MM-$25MM for FY10, up from the prior guidance of $20MM. In the meantime, the company reported sales of $2.0MM from Hi-Power beverage during the month of September, which brought total Hi-Power sales to $6.7MM in Q3 and $17.3MM for the first nine months. As Q4 is typically a strong season for CMFO when consumers start their holiday shopping, we view the raised guidance as achievable. Hi-Power retail locations now total 12,000 retail points in Fujian. As a result of an aggressive campaign to promote its beverage products, we believe CMFO has incurred increased sales and marketing expense in Q3 versus the previous quarter.

Our recent visit to the company. We attended CMFO's Investor Day held in Xiamen and Shishi on 9/30. We visited several large retail stores such as Wal-mart and Tesco and several convenience stores in Xiamen, where Hi-Power products are displayed together with well known brands such as Redbull and Wanglaoji. We also visited a Hi-Power bottling factory and the company’s seafood snack facility. We were impressed with the company's production operation and its comprehensive marketing campaign.

Updating our FY10 outlook. Following our visit to CMFO, we are further convinced that there is sustainable growth in the company's seafood snack and Hi-power drink business. For FY10, we expect seafood snack to grow at a 30% rate and Hi-Power beverage to continue its strong momentum into Q4. We believe the company has used extra cash on hand to purchase a large amount of marine catch in Q3 and we expect a significant increase in marine catch revenue in Q4. We note that marine catch has a 10% gross margin, versus 32-35% for seafood snack and 40% for Hi-power drink products.

Adjusting estimates. We now anticipate higher revenues for FY10 due to a better outlook for Hi-Power beverage and significantly higher revenue expected for marine catch. We are increasing our FY10 revenue to $118MM from the prior estimate of $104MM. However, considering the company's aggressive marketing campaign for Hi-power drink, we are also substantially increasing our estimates for sales and marketing expenses. We now expect a total of $5MM in sales & market expenses in '10, versus $2.9MM we estimated previously. As a result, we are lowering our FY10 non-GAAP EPS to $0.83 from $0.90 previously. For FY11, we are raising our revenue projection from the prior $140MM to $150MM, reflecting assumptions of 25% growth for seafood snacks, 60% growth for Hi-Power drink, and roughly $25MM contribution from marine catch. Our FY11 non-GAAP EPS estimate is lowered to $1.06, from $1.08 previously, since we are also increasing sales & marketing expenses for '11 as we expect the company to expand its Hi-Power distribution to other provinces.

Reiterate Buy. We are encouraged by the execution and growth momentum of CMFO's business. We continue to expect strong growth this year and the coming year, driven by domestic demand and distribution channel expansion. Shares are trading at 7.6x our updated FY10 non-GAAP EPS and 6.0x our FY11 EPS, which we believe are undervalued. We reiterate our Buy rating and $10 price target, which is 9.4x our FY11 non-GAAP EPS estimate of $1.06.

Analyst Reports

Thu, 18 Nov 2010 05:00:00 GMT

Rodman & Renshaw on CMFO

We are assuming coverage of China Marine Food (AMEX: CMFO, $156.1MM mkt cap) with a Market Outperform / Speculative Risk Rating and 12-month Price Target of $9.

Investment Thesis

We view the risk/reward as hugely attractive at the current level and see little long-term downside risk. Both Mingxiang seafood snacks and Hi-Power are, by now, proven brands capable of developing a consumer following in some of the most competitive regions such as Fujian and Zhejiang. We believe that the expansion of CMFO’s footprint into other provinces for both products is a matter of time and bandwidth rather than capability. We also favor the company’s focused approach of signing up distributors on a region-by-region basis as opposed to a less focused sprawl into multiple localities. This approach enables management to focus on strengthening local distributor bonds, incorporating feedback one region at a time, and also more efficiently leverages marketing expenditures.

With the announcement of BDO China as its independent auditor, China Marine Food has largely put to rest investors’ concerns over its financial integrity. Furthermore, CMFO has vaccinated itself from additional scrutiny by demonstrating the ability to quickly and effectively respond to such allegations. On the business front, CMFO is simultaneously executing upon topline and margin opportunities across its seafood processing and Hi-Power (海宝) beverage line, leading to our estimate of 27.1% and 20.7% EPS growth, respectively, in 2010 and 2011. CMFO has very conservatively guided towards 43.7% revenue growth to $100MM in 2010, driven by a 23-$25MM contribution from the Hi-Power beverage line, with the remainder attributed to sales increase in dried and frozen processed seafood, and significantly higher marine catch trading revenues. Our estimate and the Street consensus reflect significant upside from the company’s guidance.

Much investor attention had centered on CMFO’s entry into the beverage market with the acquisition of Xianghe and its product Hi-Power. Monitoring reorders, channel inventory, and distributor feedback on end-consumer reception has been key in achieving success for this brand, in our view. 4Q10 should be an important checkpoint for Hi-Power, from which the effectiveness of its recent mass marketing program can be gauged. The introduction of follow-up formulations (such as a low-calorie version) and obtainment of the “Green Food” certification (which garners the product a 5%-10% premium in ASP) present further growth and margin opportunities for the Hi-Power brand.

Market Outperform Rating and 12-Month Price Target of $9. CMFO shares are trading at 6.0x its 12-month rolling forward consensus P/E and 5.9x our 2011 EPS estimate of $0.92. This compares with the historically traded range of 5.4x – 7.9x its 12-month rolling forward P/E, averaging 6.6x. In addition, before the company’s accounting integrity was called into question in June 2010, CMFO shares, on average, traded at 7.4x its 12-month rolling forward P/E.

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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.

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Comments & Business Outlook

Tue, 09 Nov 2010 05:00:00 GMT

Third Quarter 2010 Results
	Q3 2010	Q3 2009	CHANGE
Net Sales	$22.7 million	$13.4 million	+ 69.2%
Gross Profit	$8.3 million	$4.3 million	+ 94.2%
Net Income	$4.2 million	$3.2 million	+ 28.9%
Diluted EPS*	$0.14	$0.14	+ 1.1%
Adjusted Net Income**	$4.8 million	$ 3.2 million	+ 47.2%
Adjusted Diluted EPS**	$0.16	$0.14	+ 15.5%
* EPS calculated for the period is based on 29.4 million shares on September 30, 2010 versus 23.0 million shares reported on September 30, 2009. ** Adjusted Net Income and Diluted EPS in Q32010 are non-GAAP calculations and do not include $0.6 million of non-cash, amortization of intangible assets related to the Company's acquisition. For more information about the non-GAAP financial measures contained in this press release, please see "About Non-GAAP Financial Measures" below.

"We are pleased to announce record third quarter results, which benefitted from 31.0% organic growth in seafood snack food products line. We added an additional 100 retail points to our network and experienced year over year growth in the majority of the sales territories for our core product line," began Mr. Pengfei Liu, Chairman and CEO of China Marine. "Sales of our beverage line, 'Hi-Power', exceeded our expectations as we experienced continued demand across our home province of Fujian and gained a solid understanding of the caliber of beverage distributors needed to obtain the same level of success in other markets. We also began a robust marketing campaign to foster distributor loyalty, boost brand awareness and drive new sales. Accordingly, we increased the number of 'Hi-Power' sales and marketing staffs from 23 at the beginning of the year to 205 as of September 30, 2010. We expect continued sales growth in the fourth quarter and have increased our revenue guidance for "Hi-Power" to $23.0-$25.0 million for the year."

Liquidity Requirements

Tue, 09 Nov 2010 05:00:00 GMT

We believe that the current operating activities would be able to generate adequate cash flows supporting the daily operations. We do not currently have any plans for additional fund raising.

Comments & Business Outlook

Wed, 20 Oct 2010 04:00:00 GMT

Including the $2.0 million September sales, year-to-date sales of Hi-Power beverages were $17.3 million as of September 30, 2010.

Based on projections for the fourth quarter of 2010, China Marine has increased its revenue guidance on Hi-Power beverage sales to $23.0 to $25.0 million for the 2010 year. Hi-Power retail locations now total 12,000 retail points throughout Fujian province, an increase of 20% since the Company last reported retail end-point count.

"Sales of Hi-Power were strong the summer since consumers typically drink more liquids in these hot months," began Pengfei Liu, Chairman and CEO of China Marine. "As we move into winter, distribution and customer base expansion is our goal for Hi-Power and our Mingxiang®-branded foods. Cost-effective promotions, when managed in coordination with distributors, have proven to be an effective method to build our brand, expand our customer network, maintain distributor loyalty and drive sales. We were pleased to see the results of this promotion increase our end-user network and achieve consumer recognition from our collective sponsorship of marketing campaigns during the third quarter. We are confident in our revised revenue guidance for the year."

Comments & Business Outlook

Mon, 09 Aug 2010 04:00:00 GMT

Second Quarter 2010 Highlights:

Revenue was $27.6 million, up 86.8% from Q2 2009.
The Company expanded its retail footprint for seafood snack food products by 400 sales points to 2,900 and sales grew 36.1% year over year.
Retail locations for "Hi-Power", the Company's marine algae-based beverage, crested over 10,000 retail points by the close of the second quarter 2010 while quarterly revenues grew 183.6% sequentially to $7.8 million.
Gross margins expanded by 379 basis points to 37.0% with operating margins of 29.0% for the quarter.
GAAP net income was $6.8 million, up 83.1% from Q2 2009
Adjusted net income was $7.4 million.
Earnings per diluted share were $0.26 based on 26.4 million shares; Adjusted EPS was $0.28.

"We are very pleased with our second quarter results, which was driven by 36.1% organic growth in seafood snack food products line. We added an additional 400 retail points to our network and experienced year over year growth in every sales territory for our core product line," began Mr. Pengfei Liu, Chairman and CEO of China Marine. "Sales of our new beverage line, "Hi-Power", exceeded our expectations, as we experienced strong demand across our home province of Fujian. We expect continued sales growth for our beverage segment in the second half of the year. Accordingly, we increased the number of "Hi-Power" sales and marketing staff from 23 at the beginning of the year to 188 currently as of June 30, 2010. In our recruiting effort, we have also retained top marketing talent from well-known international beverage brands to enable us a competitive edge in this fast-growing sector. "

"Based on the Company's second quarter and year-to-date performance, China Marine is confident it will exceed its revenue guidance of $20.0 million in "Hi-Power" sales for 2010 and will update investors with an increased guidance number after it consolidates its forecasts for the second half of the year."

Comments & Business Outlook

Mon, 12 Jul 2010 04:00:00 GMT

China Marine Food issue a release confirming our alert on July 6, 2010.

On July 2 and July 8, China Marine filed two separate SEC Form 4 documents detailing Chairman Liu's share purchases of a total of 245,500 shares between at average of $3.91 and $4.34. SEC Form 4 documents must be filed with the SEC when any 10% or greater shareholder purchases or sells shares. The number of shares and price of shares are detailed on each Form 4 in addition to the name and address of the shareholder. As a result of the Chairman's purchase of shares, Mr. Liu's ownership in the Company increased from 41.4% to 42.3%.

"I am very confident in the long-term growth of our Company and firmly believe that our Company's shares are always an excellent investment," Pengfei Liu, Chairman and CEO of China Marine stated. "I am confident that equity markets in the US will improve over time while our business will also grow at a very fast rate this year and next. We have forecasted revenues from our seafood snack food business will increase more than 30% in 2010. The organic growth of our snack food segment will be accompanied by meaningful revenues and earnings contributions from our algae-based beverage, 'Hi-Power'. In the first couple of weeks of July, we have been informed that the pace of our distributors re-orders has continued into the third quarter. Our CFO and I have made a commitment to update our investors on a regular basis and look forward to detailing our upcoming orders for our beverage segment and the expansion of our distributor network in the near future."

Research

Tue, 06 Jul 2010 04:00:00 GMT

Overall, this is a positive development (stock buyback) in the Chinahybrid space, and we need to see more of this for investors to gain confidence in Chinese stocks.

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security (Instr. 3)	2. Trans- action Date (Month /Day /Year)	3. Trans- action Code (Instr. 8)		4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Bene- ficially Owned Following Reported Trans- action(s) (Instr. 3 and 4)	6. Owner- ship Form: Direct (D) or Indirect (I) (Instr. 4)
1.Title of Security (Instr. 3)	2. Trans- action Date (Month /Day /Year)	Code	V	Amount	(A) or (D)	Price		6. Owner- ship Form: Direct (D) or Indirect (I) (Instr. 4)
COMMON STOCK, PAR VALUE $0.001	06/30/2010	P		140,500	A	$3.91	11,947,037	D
COMMON STOCK, PAR VALUE $0.001	07/01/2010	P		50,000	A	$4.15	11,997,037	D

see all ownership (form 4) filings from July 2, 2010.

GeoBargain Notes

Mon, 14 Jun 2010 04:00:00 GMT

Added to the GeoBargain list on May 15,2009 @ $2.70

Peak performance: Reached a high of $8.63 on January 6, 2010.
Current Price: $4.80

CMFO shares are weak today. We are speculating that this may have something to do with investor uncertainty regarding an article questioning the accuracy of CMFO reported sales numbers in the United States vs. those reported in China. We feel it is prudent to remove CMFO from the GeoBargain list until we gather more information on this matter. Also, 2010 analyst estimates indicate that EPS will grow less than 30%. This is a difficult decision, but we can always revisit the story again once the dust settles.

We are working with individuals who will discuss this matter in more detail as it relates to the entire ChinaHybrid space.

Comments & Business Outlook

Fri, 23 Apr 2010 04:00:00 GMT

"Our acquisition of Xianghe complements our product line and gives us entry into new markets. Xianghe's "Hi-Power" algae-based drink is popular among health conscious consumers, a growing market segment in China," said Mr. Liu. "China Marine management will take over and manage Xianghe, and we intend to develop additional sales of "Hi-Power" algae-based drink through our Mingxiang(R) existing and expanding distribution network," Liu concluded.

After acquiring Xianghe, the Company increased its fiscal year 2010 guidance to $100.0 million in revenues and $21.5 million in net income. These guidance numbers are subject to change and before any non-cash amortization charges associated with intangible assets generated from the Xianghe acquisition.

Source: PR Newswire (March 22, 2010)

GeoBargain Notes

Wed, 02 Dec 2009 05:00:00 GMT

China Marine Food Group is in negotiations to purchase the algae-based beverage company Xianghe Food Science and Technology.

"Similar to China Marine, Xianghe has developed a network of distributors in the Fujian, Zhejiang, Guangdong and Hunan provinces which sell its branded product to stores, restaurant food supply dealers and the hospitality industry.

Preliminary 2010 estimates of revenues from Xianghe are over $20 million with net profit margins anticipated at 20%. Through integrating the product into China Marine's distribution network and expanding distribution to untapped provinces in China, management expects revenues can accelerate significantly during 2010 and beyond."

We are not sure how much this positive development will add to earnings per share figures. Much of it depends on whether or not the Company will use existing cash balances or raise equity. We have calculated that in a worst case scenario, if China Marine raised all the proceeds via an offering at $6, the transaction would be slightly accretive.

The use of existing cash balances would be the best case scenario, one in which we have calculated that the transaction will add $0.17 to EPS. In this scenario we feel that investors may push shares to a range of $7.95 to $8.80, an increase of $1.70 to $2.55 from yesterday's levels. Investors also need to consider the eventual synergies from this transaction due to opportunities to push respective products trough new distribution channels.

The purchase price to complete this deal is $27.8 million which the Company anticipates will be recovered in 4 years. This implies that Xianghe could experience exceptional growth in net income in subsequent years. (With no growth in net income the pay back would be about seven years).

China Marine commented that contributions of the potential acquisition are not included in its current 2010 guidance of $80 million in revenues and $18 million in net income, giving us room for upside.

Source: PR Newswire (December 2, 2009)

Potential Valuation Scenarios

Mon, 17 Aug 2009 04:00:00 GMT

Valuation Scenarios

Added to Geo Bargain List on May 15, 2009. ($2.70).

Data Inputs:

Fiscal Year Ends in December
2008 Tax-Adjusted Earning Per Share: $0.37

Date	5/15/09	8/14/09
Price	$2.70	$5.38
12 Months Trailing EPS ^a	$0.39	$0.41
Implied 2009 EPS Based on Company Guidance ^a,b	$0.50	$0.50
2009 EPS Growth Rate Based on Company Guidance	29%	29%
Trailing P/E Ratio	6.92	13.12
PEG Ratio (P/E divided by growth rate)	0.24	0.45

^a CMFO is not paying a full U.S. tax rate. Therefore, all EPS numbers have been adjusted by the GeoTeam® to reflect a tax rate of 36%.

^b The company issued net income guidance of $14.3 million, but did not provide EPS guidance. The GeoTeam® used the 2008 year ending outstanding share count of 23,010,842 to calculate an implied EPS figure. Commentary in the company's March 31 10Q, page 58 infers that dilution from capital raises may not be an issue:

"We believe that the current operating activities would be able to generate adequate cash flows supporting the daily operations. We do not have any fund raising plan at the moment."

It should be noted that the company does have 2 million outstanding warrants with an exercise price of $4.20. This could come into play if the stock gains momentum.

Short-Term Valuation Scenarios

Date	5/15/09	8/14/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$9.75	$10.25
Price Based on P/E of 20 on Four Quarters Trailing EPS	$7.80	$8.20
Price Based on P/E of 15 on 2009 Company EPS Guidance	$7.50	$7.50

Long-Term (12 Months Forward) Valuation Scenarios

Date	5/15/09	8/14/09
Price Based on P/E of 25 on 2009 Implied Company EPS Guidance	$12.50	$12.50
Price Based on P/E of 20 on 2009 Implied Company EPS Guidance	$10.00	$10.00

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.

Financials

Mon, 17 Aug 2009 04:00:00 GMT

2nd QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED JUNE

	2bd Quarter 2009	2nd Quarter 2008	Period Change
GAAP Revenue	$14.8 million	$13.1 million	12.9%
GAAP EPS	$0.16	$0.14	14.3%
Tax Rate	12.6%	12.9%	00.0%
Fully Tax-Adjusted EPS a	$0.123	$.108	13.9%
Fully Diluted Shares	23,026,301	25,196,105	-8.6%

Source: See Release, August 11, 2009

1st QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED March

	1st Quarter 2009	1st Quarter 2008	Period Change
GAAP Revenue	$16.5 million	$10.8 million	52.8%
GAAP EPS	$0.14	$0.11	27.3%
Tax Rate	12.00%	13.00%	-7.7%
Fully Tax-Adjusted EPS ^a	$0.106	$0.084	26.2%
Fully Diluted Shares	23,026,301	25,142,105	-9.2%

Source: See Release

FULL YEAR 2008 vs. 2007 FINANCIAL SNAPSHOT ENDED DECEMBER

	Full Year 2008	Full Year 2007	Period Change
GAAP Revenue	$48.8 million	$36.4 million	34.1%
GAAP EPS	$0.48	$0.34	41.2%
Tax Rate	13.00%	12.00%	8.3%
Fully Tax-Adjusted EPS^a	$0.37	$0.26	42.3%
Fully Diluted Shares	23,010,842	25,142,105	-9.3%

Source: See Release

^a For valuation purposes the GeoTeam® prefers to adjust EPS to reflect a standard United States rate.

GeoBargain Notes

Mon, 17 Aug 2009 04:00:00 GMT

China Marine Food reported its 2009 second quarter financial results last week.

Highlights

Revenues increased by 12.9% to $14.8 million
Earnings per share increased by 14% % to $0.13 million

The GeoTeam® was hoping for a slightly better EPS performance. However, the company maintained its previously issued financial guidance of revenues in excess of $60.0 million and net income in excess of $14.3 million. Guidance implies a 2009 EPS growth rate of 30%, which still qualifies the stock as a GeoBargain.

Related Links
Updated Financial Table
Updated Valuation Scenarios

Research

Fri, 22 May 2009 04:00:00 GMT

GeoNuggets® - Quick Check Lists Highlighting Undiscovered Opportunities

China Marine Foods Group Ltd. (OTCBB:CMFO)

Company Description: China Marine Foods is a seafood producer engaged in the processing, distribution and sale of processed seafood products under the "Mingxiang" brand, as well as the sale of marine catch.

Data Ended 5/20/09 (See footnotes a & b)

Price = $3.15
Trailing EPS = $0.51
Fully-Taxed Trailing EPS = $0.39
Implied Guidance= $0.62
Implied Fully-Taxed EPS Guidance= $0.50
P/E Based on Fully-Taxed Trailing EPS = 8.08

Reasons for Optimism

The company meets 9 out of 10 GeoBargain® Requirements

	Requirement	Comments
	Recent 52-week High	Must Reach $3.50
	30% EPS Growth Rate^a,b	1st. Qtr. 2009 EPS increased 27%. Full year 2009 guidance implies EPS growth rate of 29%.
	10% Revenue Growth	1st. Qtr. 2009 Revenue increased 25%. Full year 2009 guidance implies a revenue growth rate of 23%.
	Strong Balance Sheet
	Positive Operating Cash Flow	$7 Million as of 1st. Qtr. 2009
	Debt to Equity Ratio less than 20%	0%
	Current Ratio is at least 2:1	7:1
	Return on Equity is at least 15% for Trailing Four Quarters	19.14%
	Minimum Pre-tax Operating Margins of 8%	22% as of 1st Qtr. 2009
	Preferably Under 50 Million Shares Outstanding	23 Million as of 1st Qtr. 2009
	High Insider Ownership (generally greater than 15%)	51% as of Dec. 2008
	Limited Institutional Ownership
	P/E Divided by EPS Growth Rate (PEG Ratio) is Less Than 1.^a,b	0.28

As it operates in the food sector, China Marine Foods may have some recession resistant characteristics. This situation is beneficially magnified because the Company's revenues from its processed food lines have been mostly from domestic sales, helping to insulate them from the global economic slowdown. China Marine Food's most recent 10-K illustrates that for the past 3 years the domestic market has accounted for between 98 to 99 percent of revenues.

Dried Processed Seafood Products, Years Ended December 31*

2008 (%) 2007 (%) 2006 (%)

PRC 99.2 99.3 98.8

Export Sales 0.8 0.7 1.2

*Source: 10-K, 2008
The recently initiated guidance implies a 2009 EPS growth rate of 29%. It is important to note that, while the EPS growth rate is just below the GeoTeam® minimum requirement of 30%, the company commented, during its first quarter conference call, that it has been conservative in its assumptions.
China Marine Foods has a wide distribution network, enabling it to maintain its competitive advantage in the industry. The company's 18 distributors allow it to sustain a market infiltration to over 1400 retail points throughout China and other countries. Major supermarkets and retailers such as Wal-Mart and Carrefour are among the end points for China Marine's products.

Additionally, China Marine Foods qualifies its distributors by making sure they follow a prescribed protocol, selecting them based on strong financial backgrounds, networks, reputations and marketing strategies.
The Company has taken the necessary steps to meet industry quality standards.

China Marine is HAACP (Hazardous Analysis and Critical Control Point) Certified, meaning that it must follow a strict protocol to ensure the best quality of its food. This fact is impressive since HAACP certification is a designation required in the United States and Europe, but not in China.
China Marine products are Green Food Certified.

Potential Valuation Scenarios if the company can achieve its EPS growth goals

Short-Term Potential value based on fully taxed adjusted trailing EPS ^a

P/E 25 * $0.39 = $9.75
P/E 20 * $0.39 = $7.80

Short-term Potential value based on 2009 fully taxed adjusted Implied EPS Guidance ^a,b

P/E 15 * $0.50 = $7.5

^a CMFO is not paying a full U.S. tax rate. Therefore, all EPS numbers have been adjusted by the GeoTeam® to reflect a U.S. tax rate of 36%.

^b The company issued net income guidance of $14.3 million, but did not provide EPS guidance. The GeoTeam® used the2008 year ending outstanding share count of 23,010,842 to calculate an implied EPS figure. Commentary in the company's March 31 10Q, page 58 infers that dilution from capital raises may not be an issue:

"We believe that the current operating activities would be able to generate adequate cash flows supporting the daily operations. We do not have any fund raising plan at the moment."

It should be noted that the company does have 2 million outstanding warrants with an exercise price of $4.20. This could come into play if the stock gains momentum.

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.

	2008 (%)	2007 (%)	2006 (%)
PRC	99.2	99.3	98.8
Export Sales	0.8	0.7	1.2