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All good points. The bad press over BSPM advertising practices really got in the way of a big price move that was about to occur. Overall many of the China names are slowly beginning to understand what U.S. investors crave:  EPS growth and shareholder friendly moves.

The CFO move for BSPM was essential. Not sure if you knew this, but the previous CFO was also the CFO of CPQQ. How can a CFO 100% fulfill duties to two companies?
BSPM is in the camp of many ChinaHybrids where EPS growth will not start to occur between the 2010 third quarter and 2011 first quarter.

In normal circumstances now would be the time to consider some names, but there is so much psychological risk out here now:

1. Real estate bubble
2. Government wants to slow growth
3. Labor issues
4. Quality issues.
None of these concerns existed in 2009.

Whether legitimate or not, in the end, the space needs to get past the quality issues for stocks like BSPM to flourish. I have formulated a plan that companies need to begin implementing that i am sharing with IR firms and CEO's..  Let's see where that gets us. If quality is resolved, we could be set up for a pretty incredible run. 

Maj

I completely agree with you as to why the stock is down other than the market and china small caps being down. For me, with them being rather new and just beginning to make a major impact, sales growth is the most important as they build product and company recognition. SGA/Revenue can easily come down over time as it is extremely high at about 50% over the last 12 months and I see that as a good sign because it shows the type of effort that they are making along with agressive expansion into many cities and rural areas.  I also believe that the stock will be lagging until after Q3 as SGA/Revenue should start coming down, sales in the new regions pick up more, and the start of several other revenue streams that are not in Q1 or Q2. So as it goes along, their revenue and income should get stronger and stronger. In 2011, I believe we will start to see SGA/Revenue come down below 40%.

In regards to stock issuance, if an acquisition comes along that is a significant long term benefit and it is specifically stated what it will be used for, I am also fine with it as a long term investor. They did state several times that dilution is not planned for this year and will only occur if an opportunity presents itself. So it does not seem as if there is any planned dilution. Obviously the higher the price, the better the timing to do it. I also agree that they should be more direct and make their own comment about certain things such as dilution instead of getting the question and being brief about it. Hopefully, they do give better details on their planned SGA/revenue for the remainder of this year and even 2011 as it would provide more clarity and stability for the stock.

Overall, I think they have an incredible opportunity and an incredible competitive advantage and it looks as if they are taking advantage of it with their Hep B medication. It also seems as if they are slowly becoming more diverse with new drugs, nutrients, raw materials, acquistions(Xian Meipude), and also other drugs coming out in the future. They are taking all of the correct steps for even greater growth and success. On top of it, they added a new CFO that seems as though he may be better at getting the information about the company out and has a very strong resume. I would be surpised if they did not exceed expectations as they were revised upwards in April and Q3 and Q4 will by far be stronger than the 1st  half.  Even if they just hit their expectation of about $19 million net income, forward P/E on the current price of the stock is about 3.5 and I expect income to come in above $20 million, but either way, extremely undervalued. So it should only get better from here for the long term investors of the stock.

BSPM is one of those stocks that has investors confused. It is a classic case where credibility has been lost for the following reasons.

1. Rumors surrounding issues of non-compliance with regulatory bodies. see more on this at this link: geoinvesting.com/compa...

2, Company has not been overly clear with regards to its needs to raise capital.

3. The company has done a poor job detailing its financials in its press releases. It actually had to reissue its fourth quarter release.

4. First quarter 2010 was below what the street had expected. There was a huge spike in the SG&A expense line that the company did not forewarn investors about.

All in all, the pharma sector has not been great one for ChinaHybrids.

On the positive side: BSPM has still maintained its bullish guidance, but it will not get love until it shows it can meet guidance and recaptures investor confidence. I think we may have to wait one more quarter before EPS growth is attained. I am more worried about the company raising money. BSPM is a crazy cheap stock, but not one of my short-term top five yet, in terms of timeliness. Mid to Long-term, could be a homerun if they get their act together. It will be interesting to see where SG&A comes in at for the 2010 second quarter.

In any event i think U.S. listed China firms are due for a bounce soon, especially when we enter the fourth quarter in preparation for EPS growth that is expected to gain steam in 2011 as many firms will have worked through dilution and new reverse mergers become "seasoned". Still there are at least three issues we must contend with:

1. Will the firms continue to dilute or allow EPS growth to take prices higher before raising money? 2009 has passed. It is back to basics.. Grow EPS!!! Not enough Chinese firms get this yet. If they do begin to understand this finance 101 concept then we will get an enourmous exapansion in P/E multiples.

2. Savvy investors are attempting to poke holes in many companies in the China space. Long-term, this is a good thing, but short-term it can leave many investors in limbo.

3. Labor issues in China will begin to illicit debates over margin pressures.

Maj