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 China Biologic Pr (NASDAQ:CBPO)

Wednesday, November 5, 2014
Comments & Business Outlook

2014 Third Quarter Financial Results:

  • Total sales in the third quarter of 2014 increased 29.5% to $68.9 million from $53.2 million in the same quarter of 2013.
  • Non-GAAP adjusted net income attributable to the Company was $21.2 million, or EPS of $0.81, representing a 36.8% increase from $15.5 million, or $0.56, in the same quarter of 2013.


Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are very pleased to report strong financial results in the third quarter, and to raise our full year financial forecast. Incremental revenue growth and operating margin improvement were largely attributable to increased sales of IVIG and placenta polypeptide products. The successful implementation of our sales strategy allowed us to continue to capitalize on the substantial opportunities in tier-one cities for IVIG products. In anticipation of a favorable market environment and our increased sales capabilities this year, we reserved a large volume of our 2013 IVIG inventories to be sold throughout 2014. Further, added production capacity for placenta polypeptide products allowed us to expand sales volume, while we also managed to reduce selling expenses by utilizing internal resources to promote our placenta polypeptide products."

Mr. Gao continued, "There were several important developments to our operations and product portfolio in recent months. Our two main production facilities are once again fully operational, and as a result, we are able to gradually increase albumin production and inventory levels. Our Guizhou Taibang facility received its GMP certificate earlier than expected, which has resulted in added production capacity at this facility. In early September, we acquired an additional 19.84% equity stake in Guizhou Taibang, which has significantly enhanced our control of its long-term strategy and development. In October, Shandong Taibang received approval from the China Food and Drug Administration for the commercial manufacturing of human prothrombin complex concentrate. On October 31, Shandong Taibang received approval from the Hebei Provincial Health and Family Planning Commission to build two new plasma collection stations in Hebei province. This approval is the first issued by the Hebei provincial government since plasma collection was privatized in China in 2006. Hebei, with a combined population of approximately 71 million, is an underdeveloped province for plasma collection as there are currently three stations only. We intend to acquire the requisite land use rights and obtain the construction permits as soon as it completes the site selection process, and will try to complete construction, staff recruitment and government inspection and certification process within approximately 12 months thereafter. The new collection stations may commence operations only after passing the government inspection and certification process and obtaining the collection licenses, and we expect these two stations to reach their designed annual collection capacities in approximately three years after obtaining the collection licenses."

"Looking to the fourth quarter and into 2015, we remain confident in our sales team's ability to continue to stabilize product pricing. Their performance has already exceeded our estimates set forth at the beginning of this year. Our ability to scale plasma collection and leverage our direct sales model positions us well to meet the rising demand for plasma-based products in China and strengthen our market leadership."

Business Outlook

The Company is adjusting its previously issued estimates for the full year of 2014 as well as underlying assumptions, and now expects the revenue to increase from $230-$240 million to $240-$245 million, an 18%-20% increase over the prior year, and the non-GAAP adjusted net income to increase from $67-$69 million to $76-$78 million, excluding the impact of a potential one-time bad-debt provision of approximately $5 million (of which approximately $3.5 million is attributable to the Company) to be made in connection with an employee housing development project in Shandong. For further details on the employee housing development project in Shandong, please refer to the Company's Quarterly Report on Form 10-Q for the three months ended September 30, 2014.

Other factors contributing to the Company's improved revenue and non-GAAP adjusted net income outlook include Guizhou Taibang's earlier-than-expected resumption of production, a favorable VAT rate reduction effective from July 1, 2014, earnings accretion from the Company's increased ownership stake in Guizhou Taibang, and more favorable product pricing on select products partially attributable to the Company's successful implementation of a direct sales model.

"Even after taking into account the impact of the potential bad-debt provision to our fourth quarter results, we are pleased to raise our full year revenue and net income forecast," concluded Mr. Gao.

The revised outlook assumes no significant adverse product price changes during the remainder of 2014, and reflects the Company's current and preliminary views, which are subject to change.


Monday, November 3, 2014
Hot Bio-Tech News

BEIJING, Nov. 3, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that its majority-owned subsidiary Shandong Taibang Biological Products Co. Ltd. ("Shandong Taibang") received on October 31, 2014 the approval from the Hebei Provincial Health and Family Planning Commission to build two new plasma collection stations in Hebei Province.

The new plasma collection stations will be located in Xinglong County of Chengde City and Daming County of Handan City. These two counties have a combined population of approximately one million. The Company intends to acquire the requisite land use rights and obtain the construction permits as soon as it completes the site selection process, and will try to complete construction, staff recruitment and government inspection and certification process within approximately 12 months thereafter. The aggregate capital expenditures for these two new collection stations are expected to be in the range of RMB40 million to RMB50 million, or approximately $6.5 million to $8.1 million based on the current exchange rate. Each new collection station may commence operations only after it passes a government inspection and certification process and obtains a collection license. The Company expects these two new stations to reach their designed annual collection capacities in approximately three years after obtaining collection licenses, by which time these two new stations are expected to increase the Company's total collection capacity by approximately 10-15%.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are very pleased to announce the approval to build two new collection stations in Hebei Province, where the Company has significant market presence. Hebei, with a combined population of approximately 71 million, is an underdeveloped province for plasma collection as there are currently three stations only. The approval obtained by China Biologic is the first issued by the Hebei provincial government since plasma collection was privatized in China in 2006."

"The region is geographically advantageous for us because it is close to Shandong and offers convenient and economic transportation for raw materials to our Shandong Taibang manufacturing facility. Additionally, Hebei has a relatively low occurrence of infectious disease and therefore offers a good pool of eligible plasma donors. The establishment of these two new collection stations in Hebei will represent a significant step for carrying out China Biologic's strategic business development plan. With the continuing expansion of our plasma collection capacity and advancement of our product pipeline, we believe we are well positioned to meet the increasing market demands for plasma protein therapeutics in China in the coming years," Mr. Gao concluded.


Comments & Business Outlook

BEIJING, Nov. 3, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that its majority-owned subsidiary Shandong Taibang Biological Products Co. Ltd. ("Shandong Taibang") received on October 31, 2014 the approval from the Hebei Provincial Health and Family Planning Commission to build two new plasma collection stations in Hebei Province.

The new plasma collection stations will be located in Xinglong County of Chengde City and Daming County of Handan City. These two counties have a combined population of approximately one million. The Company intends to acquire the requisite land use rights and obtain the construction permits as soon as it completes the site selection process, and will try to complete construction, staff recruitment and government inspection and certification process within approximately 12 months thereafter. The aggregate capital expenditures for these two new collection stations are expected to be in the range of RMB40 million to RMB50 million, or approximately $6.5 million to $8.1 million based on the current exchange rate. Each new collection station may commence operations only after it passes a government inspection and certification process and obtains a collection license. The Company expects these two new stations to reach their designed annual collection capacities in approximately three years after obtaining collection licenses, by which time these two new stations are expected to increase the Company's total collection capacity by approximately 10-15%.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are very pleased to announce the approval to build two new collection stations in Hebei Province, where the Company has significant market presence. Hebei, with a combined population of approximately 71 million, is an underdeveloped province for plasma collection as there are currently three stations only. The approval obtained by China Biologic is the first issued by the Hebei provincial government since plasma collection was privatized in China in 2006."

"The region is geographically advantageous for us because it is close to Shandong and offers convenient and economic transportation for raw materials to our Shandong Taibang manufacturing facility. Additionally, Hebei has a relatively low occurrence of infectious disease and therefore offers a good pool of eligible plasma donors. The establishment of these two new collection stations in Hebei will represent a significant step for carrying out China Biologic's strategic business development plan. With the continuing expansion of our plasma collection capacity and advancement of our product pipeline, we believe we are well positioned to meet the increasing market demands for plasma protein therapeutics in China in the coming years," Mr. Gao concluded.


Friday, October 17, 2014
Hot Bio-Tech News

BEIJING, Oct. 17, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the Company has received approval from the China Food and Drug Administration (the "CFDA") for commercial manufacturing of human prothrombin complex concentrate ("PCC") at its Shandong Taibang facility. The CFDA inspected Shandong Taibang's new coagulation factor production facility for Good Manufacturing Practices ("GMP") compliance in June 2013 and is expected to issue the GMP certificate before early December. The Company expects to commence commercial production of PCC at its Shandong Taibang facility immediately upon the receipt of the GMP certificate.

PCC is used for the prophylaxis and treatment of congenital and acquired clotting factor II, factor VII, factor IX or factor X deficiencies, including those caused by hemophilia and other liver diseases. Other indications for PCC include anticoagulant reversal and vitamin K deficiency. The Company has already received CFDA approval to commercially manufacture PCC at its Guizhou Taibang facility and expects to commence commercial production in early 2015.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are delighted to receive approval from the CFDA to launch PCC production. With production underway at both our Shandong Taibang and Guizhou Taibang facilities, we are confident that we will be able to meet the growing market demand for PCC. We anticipate that the added production will contribute to our 2015 financial performance as we continue to reinforce our industry leadership."


Thursday, September 4, 2014
Acquisition Activity

BEIJING, Sept. 4, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that it has completed the transaction to acquire an additional 19.84% equity interest in Guizhou Taibang Biological Products Co., Ltd ("Guizhou Taibang") and increased its registered equity interests in Guizhou Taibang from 56.39% to 76.23%.

Additional information about this transaction can be found in the Company's previous release and 8-K filing with the SEC on August 25, 2014.


Monday, August 25, 2014
Comments & Business Outlook

BEIJING, Aug. 25, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that its wholly-owned subsidiary Guiyang Dalin Biotechnology Co., Ltd. ("Guiyang Dalin") had agreed to acquire an additional 19.84% equity interest in Guizhou Taibang Biological Products Co., Ltd ("Guizhou Taibang") from Guizhou Eakan Pharmaceutical Co., Ltd., an existing minority shareholder of Guizhou Taibang. The total consideration of the transaction will be RMB535 million ($87.1 million). Upon completion of the transaction, China Biologic will increase its controlling stake in Guizhou Taibang from 56.39% to 76.23%.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "Increasing our ownership position in Guizhou Taibang is a significant development for China Biologic. Since acquiring the majority stake in 2008, we have been focusing on building up Guizhou Taibang's product portfolio and pipeline, expanding production capacity and enhancing efficiency. We are confident with its business prospects and believe this acquisition of additional equity interest will result in earnings accretion as well as the super majority ownership with significantly enhanced control of Guizhou Taibang's long-term strategy and development. China Biologic will use the proceeds from its recent offering as well as internal resources to fund this transaction. We currently expect to complete this transaction in September 2014."


Joint Venture

Item 1.01 Entry into a Material Definitive Agreement.


On August 21, 2014, Guiyang Dalin Biotechnology Co., Ltd. (“Guiyang Dalin”), a majority shareholder of Guizhou Taibang Biological Products Co., Ltd. (“Guizhou Taibang”) and a wholly-owned subsidiary of China Biologic Products, Inc. (the “Company”), entered into (i) a registered equity purchase agreement, (ii) an equity exchange agreement and (iii) an unregistered equity purchase agreement (collectively, the “Transaction Documents”) with Guizhou Eakan Pharmaceutical Co., Ltd. (“Guizhou Eakan”), a minority shareholder of Guizhou Taibang. Pursuant to the Transaction Documents, Guiyang Dalin agreed to acquire Guizhou Eakan’s entire 19.84% equity interest (including 19% registered equity interest and 0.84% unregistered equity interest) in Guizhou Taibang for a total consideration of RMB535,000,000. The consideration for the 19% registered equity interest is RMB517,102,000, consisting of (i) RMB462,000,000 in equity exchange which will be satisfied through the transfer of Guiyang Dalin’s 100% equity interest in its wholly-owned subsidiary Shanghai Qiansen Investment Managing Co., Ltd. with a paid-in capital of the same amount to Guizhou Eakan and (ii) RMB55,102,000 in cash payment as compensation for Guizhou Eakan’s share of the accrued distributable profits in Guizhou Taibang. The consideration for the 0.84% unregistered equity interest is RMB17,898,000 in cash payment, which was the amount of capital contribution made by Guizhou Eakan for the pending increase of the registered capital of Guizhou Taibang in 2013. Upon the completion of the transactions contemplated by the Transaction Documents, Guiyang Dalin will increase its equity stake in Guizhou Taibang from 56.39% (including 54% registered equity interest and 2.39% unregistered equity interest) to 76.23% (including 73% registered equity interest and 3.23% unregistered equity interest). The unregistered equity interest is due to the ongoing litigation with Guizhou Jie’an Investment Co., Ltd., a minority shareholder of Guizhou Taibang, over the validity of Guizhou Taibang’s shareholder resolutions dated November 13, 2013 (the “Disputed Resolutions”), which has delayed the registration of the increased registered capital of Guizhou Taibang as contemplated in the Disputed Resolutions. The Disputed Resolutions approved, among others, the issuance of additional equity interests to existing shareholders in exchange of additional capital contributions from such existing shareholders. For more information on the Disputed Resolutions and the unregistered equity interests in Guizhou Taibang, please see “Part II—Item 1—Legal Proceedings” in our quarterly report on Form 10-Q for the six months ended June 30, 2014 as filed with the Securities and Exchange Commission on August 5, 2014.


Tuesday, August 5, 2014
Comments & Business Outlook

CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

          For the three months ended     For the six months ended  
    Note     June 30, 2014     June 30, 2013     June 30, 2014     June 30, 2013  
          USD     USD     USD     USD  
Sales     11       60,073,984       53,580,523       116,340,561       107,612,255  
Cost of sales             18,919,981       16,122,262       36,635,147       32,739,020  
Gross profit             41,154,003       37,458,261       79,705,414       74,873,235  
                                         
Operating expenses                                        
  Selling expenses             3,329,175       2,441,727       5,611,661       4,278,120  
  General and administrative expenses             7,112,798       8,866,071       14,329,424       17,553,168  
  Research and development expenses             1,838,795       835,150       2,912,361       1,748,242  
 Income from operations             28,873,235       25,315,313       56,851,968       51,293,705  
                                         
 Other income (expenses)                                        
  Equity in income of an equity method investee             1,523,216       610,997       1,860,579       739,945  
  Interest expense             (862,957 )     (198,739 )     (1,484,164 )     (434,913 )
  Interest income             1,724,324       995,757       3,320,202       1,643,819  
Total other income, net             2,384,583       1,408,015       3,696,617       1,948,851  
                                         
Earnings before income tax expense             31,257,818       26,723,328       60,548,585       53,242,556  
                                         
Income tax expense     8       4,486,157       3,745,649       9,824,375       8,352,551  
                                         
Net income             26,771,661       22,977,679       50,724,210       44,890,005  
                                         
Less: Net income attributable to noncontrolling interest             7,046,706       6,815,753       12,725,584       13,812,219  
                                         
Net income attributable to China Biologic Products, Inc.             19,724,955       16,161,926       37,998,626       31,077,786  
                                         
Net income per share of common stock:     14                                  
  Basic             0.83       0.60       1.55       1.15  
  Diluted             0.79       0.57       1.47       1.11  
Weighted average shares used in computation:     14                                  
  Basic             23,483,090       26,880,459       24,212,766       26,833,262  
  Diluted             24,719,011       28,067,303       25,435,122       27,967,080  
                                         
Net income             26,771,661       22,977,679       50,724,210       44,890,005  
                                         
Other comprehensive income:                                        
Foreign currency translation adjustment, net of nil
income taxes
            527,203       4,428,715       (2,589,440 )     5,825,256  
                                         
Comprehensive income             27,298,864       27,406,394       48,134,770       50,715,261  
                                         
Less: Comprehensive income attributable to
noncontrolling interest
            7,140,585       7,723,790       12,245,986       14,882,947  
                                         
Comprehensive income attributable to China
Biologic Products, Inc.
            20,158,279       19,682,604       35,888,784       35,832,314  

Management Discussion and Analysis

Sales

Our sales increased by $6.5 million, or 12.1%, to $60.1 million for the three months ended June 30, 2014, compared to $53.6 million for the same period in 2013. The increase in sales for the three months ended June 30, 2014 was primarily attributable to the sales volume increases in certain plasma products and placenta polypeptide product.


Monday, July 7, 2014
Deal Flow

ITEM 7.01 REGULATION FD DISCLOSURE.


On July 2, 2014, China Biologic Products, Inc. (the “Company”) completed an offering (the “Offering”) of 1,782,500 shares of its common stock at a price of $38.00 per share, less the underwriting discounts. In the Offering, the Company sold 920,000 shares (including 120,000 shares sold pursuant to the exercise by the underwriters of their option to purchase additional shares from the Company) and a selling stockholder sold 862,500 shares (including 112,500 shares sold pursuant to the exercise by the underwriters of their option to purchase additional shares from such selling stockholder).


Tuesday, July 1, 2014
Deal Flow

China Biologic Products, Inc.

Common Stock

1,550,000 Shares

PRICE $38.00 A SHARE
 

       
    Price to
Public
  Underwriting Discounts and Commissions(1)   Proceeds to Company   Proceeds to
Selling
Stockholder
Per Share     $38.00       $1.52       $36.48       $36.48  
Total     $58,900,000       $2,356,000       $29,184,000       $27,360,000  

Friday, June 27, 2014
Notable Share Transactions

BEIJING, June 27, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading plasma-based biopharmaceutical company in China, today announced the pricing of a follow-on offering of 1,550,000 shares of common stock at a public offering price of $38.00 per share. The Company will be offering 800,000 shares and a selling stockholder will be offering 750,000 shares of common stock. In addition, the underwriters have a 30-day option to purchase up to 120,000 additional shares of common stock from the Company and 112,500 additional shares of common stock from the selling stockholder.


Monday, June 23, 2014
Comments & Business Outlook
BEIJING, June 23, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading plasma-based biopharmaceutical company in China, today announced that on June 18, 2014, the Ministry of Finance of China and the State Administration of Taxation of China jointly published a notice to reduce and unify the value added tax ("VAT") rate on sales of a wide range of products in China, which will take effect on July 1, 2014. Pursuant to the notice, the VAT rate on sales of human blood and blood component based biopharmaceutical products will be reduced from the current rate of 6% to 3%. The Company believes that the reduction in VAT rate will be applicable to and will have a favorable impact on the sales of all plasma based products of its majority-owned subsidiaries Shandong Taibang Biological Products Co., Ltd. and Guizhou Taibang Biological Products Co., Ltd. Although the Company is still assessing the quantitative impact of this favorable VAT reduction on its future results of operation, the Company expects that once implemented this reduction in the VAT rate will have a positive impact on its sales and net income in the second half of 2014 and onwards as its sales revenue is recognized as the invoiced value of products sold minus VAT.

Wednesday, June 18, 2014
Notable Share Transactions

BEIJING, June 17, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading plasma-based biopharmaceutical company in China, today announced that it filed a preliminary prospectus supplement in connection with the commencement of a public offering of shares of its common stock. The Company plans on selling 1,000,000 shares of common stock and certain selling stockholders plan on selling 2,212,500 shares of common stock in the offering. In addition, the Company has granted the underwriters a 30-day option to purchase up to 481,875 additional shares of common stock. The final terms of the offering will depend on market and other conditions at the time of pricing.

The Company intends to use the proceeds that it receives from the offering primarily for general corporate purposes. In addition, if appropriate opportunities arise in the future to acquire or invest in complementary products, technologies or businesses, the Company may use a portion of the net proceeds for such acquisition or investment. The Company will not receive any proceeds from the sale of shares by the selling stockholders.


Tuesday, June 17, 2014
Deal Flow

China Biologic Products, Inc.

China Biologic Products, Inc. is offering 1,000,000 shares of its common stock. The selling stockholders identified in this prospectus supplement are offering an additional 2,212,500 shares of common stock. We will not receive any proceeds from the sale of shares by the selling stockholders.

  Price to
Public
  Underwriting Discounts and Commissions(1)   Proceeds to Company   Proceeds to
Selling
Stockholders
Per Share     $       $       $       $  
Total     $       $       $       $  


Monday, June 9, 2014
Deal Flow

CHINA BIOLOGIC PRODUCTS, INC.

         
Title of Each Class of Securities to be Registered   Amount To Be Registered(1)(2)   Proposed
Maximum
Offering Price
per Unit or Share
  Proposed
Maximum Aggregate
Offering Price(1)
  Amount of Registration Fee
Primary Offering:
                               
Common Stock, $0.0001 par value per share                                
Preferred Stock, $0.0001 par value per share                                
Warrants                                
Units(5)                                
Total Primary Offering           (3)     $ 120,000,000 (4)    $ 15,456 (4) 
Secondary Offering:
                               
Common Stock, $0.0001 par value per share(4)     475,000 shares     $ 45.40 (6)    $ 21,565,000     $ 2,778 (6) 
Total Registration Fee                           $ 18,234  


Wednesday, May 7, 2014
Comments & Business Outlook

First Quarter 2014 Financial Results

  • Total sales in the first quarter of 2014 increased by 4.1% to $56.3 million from $54.0 million in the same quarter of 2013.
  • Non-GAAP adjusted net income per share was $0.73, compared to $0.59 in the same quarter of 2013.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are pleased to have further increased our revenue in the first quarter, in spite of strong financial performance in the prior year period, as well as a temporary production suspension of Guizhou Taibang's plasma production during this period. During the reporting quarter, our Shandong facility maintained strong sales growth momentum, and our Guizhou facility experienced a 37% sales decrease due to the production suspension, which was in line with our internal forecast. Our plasma collection volume continued to grow as planned. Our operating margin and net margin of the first quarter of 2014 reached 49.7% and 32.5%, respectively, representing a year-on-year improvement. This solid growth was primarily attributable to strong market demand, especially for our human albumin products, stable product pricing, a more profitable product mix, improved plasma utilization efficiency, as well as effective cost control measures."

"During the reporting quarter, human albumin products and IVIG products remained our two largest sales contributors, while other products also experienced positive developments. We experienced modest growth in both price and sales volume of albumin products. For our higher-margin hyper-immune products, in particular, human rabies immunoglobulin products, our overall market share continues to grow and we experienced strong growth in sales volume during the reporting quarter. The overall revenue contribution from rabies immunoglobulin products increased to 12% of total sales from 2% in the same quarter of 2013. We attribute this success to our R&D efforts in the last year, which improved vaccination practices on specialty plasma collection and production yields. As a result, we increased the supply of rabies vaccinated plasma and expanded their production in our Shandong subsidiaries since the second half of 2013. Additionally, sales of human coagulation factor VIII continued to ramp up, which further improved the Company's plasma utilization efficiency. For our non-plasma products, thanks to the recent remodeling of our placenta polypeptide production line, sales volume of placenta polypeptide increased by 21% year-over-year in the first quarter and we expect its production volume to continue to rise in the coming quarters. "

Mr. Gao continued, "As for our operational developments, Guizhou Taibang received GMP certification for its placenta polypeptide production facility in January and GMP certification for its plasma production in March. Our Guizhou Taibang facility has since resumed production with increased production capacity. We also began commercial production of human prothrombin complex concentrate at Guizhou Taibang. With these updates, we expect more products available for sales in the second half of 2014. We are confident that we can enhance our total sales and operating efficiency to meet growing market demand. We expect the growth momentum we saw in the first quarter to accelerate in the following quarters."

"Finally, at the non-operational level, we repurchased 2.5 million shares of common stock from Ms. Siu Ling Chan, an individual shareholder of our Company, at a total consideration of $70 million in February 2014. Through this transaction, we continue to enhance our shareholding structure and increase shareholder value," concluded Mr. Gao.

Outlook

For the full year of 2014, the Company reiterates its full year financial forecast of total sales in the range of $230 million to $240 million and full year non-GAAP adjusted net income in the range of $67 million to $69 million. This guidance assumes only organic growth and excludes acquisitions and necessarily assumes no significant adverse product price changes during 2014.


Wednesday, April 2, 2014
Resolution of Legal Issues

BEIJING, April 2, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the Company has learned that the pending claim in the High Court of Hong Kong (the "Court") against Ms. Siu Ling Chan ("Ms. Chan"), an individual shareholder of the Company, and her spouse, Mr. Tung Lam, had been withdrawn with Court approval. The claim was originally filed by a group of individuals against the title of certain shares of the Company's common stock held by Ms. Chan and Ms. Lin Ling Li ("Ms. Li"), a formal individual shareholder of the Company.

The Company understands that the plaintiffs have reached settlement agreements with all defendants, including Ms. Chan and her spouse, with respect to the claim, and the claim against other defendants, Ms. Li and her spouse, had also previously been withdrawn with Court approval. The withdrawal of the claim against Ms. Chan and her spouse with Court approval thus represents a final conclusion to the title dispute in respect of certain shares of the Company's common stock held by Ms. Chan and Ms. Li. For more information about the settlement agreements, please refer to the current reports on Form 8-Ks filed by the Company with the SEC on August 5, 2013 and February 7, 2014, respectively.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "While CBPO was not a party to the litigation, we are glad that the historical dispute involving certain of our individual shareholders has finally been settled and concluded. We welcome this positive development which has resolved certain historical issues in our shareholder base. We remain confident that 2014 will be a promising year for our company and we will continue to work hard to increase shareholder value."


Wednesday, March 19, 2014
Comments & Business Outlook

BEIJING, March 19, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the Company has received the Good Manufacturing Practice ("GMP") certification from China Food and Drug Administration ("CFDA") in respect of its plasma production facility at its Guizhou subsidiary.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are delighted to receive GMP certification earlier than expected, allowing us to resume full-scale commercial production in late March for all of our approved plasma products, including the newly approved human prothrombin complex concentrate ("PCC"). This concludes our efforts of the past nine months to achieve full compliance with GMP standards at our Guizhou facility. We attribute this achievement to the massive contributions of our Guizhou employees, who completed comprehensive facility upgrading ahead of schedule. We expect higher growth with more products available for sales starting in the third quarter this year, due to lag effects from long production cycles and CFDA approval procedures for each batch of products."

Mr. Gao continued, "With these comprehensive upgrades, we are confident we can enhance the operating efficiency of our Guizhou facility to meet growing market demand moving forward."


Thursday, March 13, 2014
Comments & Business Outlook

Fourth Quarter 2013 Financial Results

  • Total sales in the fourth quarter of 2013 increased by 25.3% to $42.6 million from $34.0 million in the same quarter of 2012.
  • Non-GAAP adjusted net income per share was $0.35, compared to $0.27 in the same quarter of 2012.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are proud of the material increase to our year-over-year sales and net income results in spite of a temporary production suspension for GMP renewal at ourGuizhou facility midway through the year and from a challenging comparison to strong 2012 financial results. Our steady growth was supported by rising market demand, favorable product pricing, stringent cost control measures, and most importantly, the expansion of our product portfolio and transition to a more profitable product mix. In 2013, we experienced a 16% increase in our plasma collection volume, mostly through organic growth at existing centers. In addition we added one new plasma collection center in Cao County and enlarged collection territory at two collection centers of our Guizhou subsidiary. During the year, we also improved our plasma utilization efficiency following the launch of our Factor VIII products. We are particularly pleased to have amassed a market share of 19% in China's Factor VIII market during the first year of its launch."

"In 2013, we accomplished a primary corporate goal of full compliance with Good Manufacturing Practice ("GMP") standards at our various facilities. Through our efforts, our Shandong Taibang facility obtained the renewal of its GMP certification for plasma production in June 2013, while our Guizhou Taibang facility completed its GMP upgrade in January 2014. Moreover, in January 2014, we received GMP certification for the Placenta Polypeptide production facility at Guizhou. We are expecting to receive GMP certification and resume production in the second quarter as planned for our plasma production facility. As such, we expect higher growth with more products available for sales starting in the third quarter this year. We are confident that, with these upgrades, we can enhance our operating efficiency to meet growing market demand moving forward."

Mr. Gao continued, "In an effort to expand our product portfolio and increase profitability, we continue to make progress in several important areas during 2013 that can contribute to our 2014 financial performance. We obtained SFDA approval to manufacture Human Prothrombin Complex Concentrate ("PCC") at our Guizhou Taibang facility and also received SFDA manufacturing approval for a new dosage of FVIII (300IU), further reinforcing our industry leadership. We also initiated phase III clinical trials for Human Fibrinogen."

"We continue our efforts to enhance our shareholding structure and increase shareholder value. During the last three quarters, we closed two share repurchase transactions, where we repurchased an aggregate 3.98 million shares of common stock for a total consideration of $99.6 million. The repurchased shares represent approximately 14.76% of the total common stock outstanding in early August prior to the first share repurchase."

Mr. Gao concluded, "Looking into 2014, we are confident that we can further capitalize on growing demand for our products and achieve greater levels of revenue growth. We anticipate our plasma collection volume will continue to rise in both Shandong andGuizhou. We also see great opportunity to further penetrate sales of IVIG and higher-margin hyper-immune products in certain markets and increase our production and sales of Placenta Polypeptide products. We expect to strengthen our market leadership in human coagulation products, including FVIII, and introduce PCC to the market in 2014. With the strength of our current product portfolio and planned growth initiatives, we believe 2014 will be another promising year for our company."

Outlook

For the full year of 2014, the Company expects total sales to be in the range of $230million to $240 million. This guidance assumes only organic growth and excludes acquisitions and necessarily assumes no significant adverse price changes during 2014. The Company estimates full year non-GAAP adjusted net income to be in the range of $67 million to $69 million.


Monday, March 3, 2014
Notable Share Transactions

BEIJING, March 3, 2014 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the Company has completed its repurchase of 2.5 million shares of common stock for a total consideration of $70 million. This transaction was originally announced in the Company's 8-K SEC filing on January 28, 2014.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "In the past six months, we have closed two share repurchase transactions totaling 3.98 million shares of common stock for a total consideration of $99.6 million. Through these repurchase transactions, we continue to enhance our shareholder structure and increase shareholder value. We are also pleased that the two individual selling shareholders in these repurchase transactions have both reached settlement with the certain plaintiff group the title dispute regarding the Company shares held by such selling shareholders."

As originally announced on January 28, 2014, China Biologic Products, Inc. entered into a Repurchase Agreement with Ms. Siu Ling Chan, an individual shareholder of the Company, and Mr. Tung Lam, the spouse of Ms. Chan, pursuant to which the Company agreed to repurchase 2.5 million shares of its common stock, representing approximately 9.67% of the total common stock outstanding on January 27, 2014. The repurchase price is $28.00 per share totaling $70 million in aggregate.


Deal Flow

Item 1.01 Entry into a Material Definitive Agreement.

On February 25, 2014, China Biologic Products, Inc. (the “Company”) entered into a credit facility agreement (the “Facility Agreement”) with China Merchants Bank Co., Ltd., New York Branch (the “Lender”). Pursuant to the Facility Agreement, the Lender granted the Company a facility of up to US$40 million (“Facility A”) and a facility of up to US$30 million (“Facility B” and together with Facility A, the “Facilities”), each bearing an interest rate of LIBOR plus 1.30% per annum and a facility fee of 1.20% per annum, payable every three months. The maturity date of the loan borrowed under Facility A is the earlier of (i) 24 months from the borrowing date or (ii) ten business days prior to the expiration or termination of a standby letter of credit issued by China Merchants Bank Co., Ltd., Beijing Branch (“Guarantor”) in favor of the Lender (“Letter of Credit A”). The maturity date of the loan borrowed under Facility B is the earlier of (i) 18 months from the borrowing date or (ii) ten business days prior to the expiration or termination of a standby letter of credit issued by the Guarantor in favor of the Lender (“Letter of Credit B” and together with Letter of Credit A, the “Letters of Credit”). Shandong Taibang Biological Products Co., Ltd., the Company’s majority-owned PRC subsidiary, provided to the Guarantor an aggregate cash deposit collateral of approximately RMB441.1 million as security for the Letters of Credit pursuant to certain guarantee agreements (the “Guarantee Agreements”). The Facility Agreement contains customary covenants, including but not limited to, limitations on liens, mergers and consolidations, change in the nature of business, ownership of subsidiaries and transaction with affiliates, etc. On February 27, 2014, the Company drew down the Facilities and used the proceeds therefrom to repurchase 2,500,000 shares of the Company’s common stock held by Ms. Siu Ling Chan. The repurchase was completed on the same date and the repurchased shares were designated as treasury stock. For more information of the share repurchase, please refer to the current report on Form 8-K/A filed by the Company with the Securities and Exchange Commission on February 7, 2013.

The foregoing summary of the Facility Agreement, the Letters of Credit and the Guarantee Agreements is qualified in its entirety by reference to the full text of the relevant agreements, which are included as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this current report on Form 8-K and incorporated herein by reference.

Item 8.01 Other Events

On March 3, 2014, the Company issued a press release announcing the completion of the Company’s repurchase of 2,500,000 shares of the Company’s common stock held by Ms. Siu Ling Chan for US$70 million. A copy of the press release, which the Company is furnishing to the Securities and Exchange Commission, is attached as Exhibit 99.1 and incorporated by reference herein.


Tuesday, January 28, 2014
Deal Flow

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On January 27, 2014, China Biologic Products, Inc. (the “Company”) entered into a Repurchase Agreement (the “Repurchase Agreement”) with Ms. Siu Ling Chan (“Ms. Chan”), an individual shareholder of the Company, and Mr. Tung Lam (“Mr. Lam”), the spouse of Ms. Chan, pursuant to which the Company agreed to repurchase 2,500,000 shares of its common stock (the “Repurchased Shares”), representing approximately 9.67% of the total common stock outstanding on January 27, 2014. The repurchase price is $28.00 per share, which is below the volume-weighted average price of the Company’s stock during the last 30 trading days and the last 90 trading days, and $70,000,000 (the “Repurchase Price”) in the aggregate. The Repurchased Shares will become treasury stock of the Company upon closing of the repurchase.

The Company’s obligation to repurchase the Repurchased Shares is subject to certain conditions, among which (i) an injunction order issued on May 31, 2013 by the High Court of Hong Kong prohibiting Ms. Chan and Mr. Lam from disposing of, encumbering, diminishing the value of or otherwise dealing with the Repurchased Shares shall have been lifted and (ii) a settlement agreement (the “Settlement Agreement”) has to remain effective and valid. The Settlement Agreement was entered on January 27, 2014 between Ms. Chan and Mr. Lam and certain plaintiffs in the pending lawsuit filed in the High Court of Hong Kong (the “HK Lawsuit”) against Ms. Chan, Mr. Lam to settle the title dispute between such plaintiffs and Ms. Chan and Mr. Lam in respect of the Repurchased Shares. Pursuant to the Repurchase Agreement, a substantial portion of the Repurchase Price will be used as the one time cash settlement payment under the Settlement Agreement. For more information on the HK Lawsuit, please refer to the current reports on Form 8-K filed by the Company with the SEC on March 12, 2012 and August 5, 2013.

The foregoing summary of the Repurchase Agreement is qualified in its entirety by reference to the full text of the agreement, which is included as Exhibit 10.1 to this current report on Form 8-K and incorporated herein by reference.


Wednesday, November 6, 2013
Comments & Business Outlook

Third Quarter 2013 Financial Results

  • Total sales in the third quarter of 2013 were $53.2 million, compared to $53.1 million in the same quarter of 2012.
  • Non-GAAP adjusted net income per share was $0.56, compared to $0.54 in the same quarter of 2012.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are pleased with our solid financial performance and sound operational execution in the third quarter, particularly in comparison with the third quarter in the prior year, which was also a strong quarter. Our Shandong facility experienced a double-digit sales increase in the third quarter and, as anticipated, our Guizhou facility suspended production since June 1, 2013. The financial impact associated with our Guizhou facility remains in-line with our internal forecast and our total sales for the first nine months of this year continue to grow as planned."

"As we stated last quarter, market demand for plasma-based products in China remained strong. This contributed to an increase in albumin import volume and had a slightly negative impact on product pricing. We continue to closely monitor market trends to adjust our pricing and product shipments accordingly. During the reporting quarter, we maintained strong operating margin, thanks to a more profitable product mix, efficient cost control measures due to reduced selling and G&A expenses, as well as improved plasma utilization efficiency following the launch of our Factor VIII products."

"During the third quarter, in Shandong, our new plasma station in Cao County continued to ramp up. After receiving SFDA approval in 2012, we have identified sufficient patients in recent months to initiate phase III clinical trials for Human Fibrinogen, a product used to treat congenital fibrinogen deficiency and acquired fibrinogen deficiency. In July, Shandong Taibang received SFDA manufacturing approval for a new 300 IU vial dosage of Factor VIII. This addition to our product portfolio reflects our ongoing commitment of improving product offering in general and advancing hemophilia therapy treatment in particular. We expect to commence commercial production in the following months. In Guizhou, we received SFDA manufacturing approval for Human Prothrombin Complex Concentrate ("PCC") at the end of July and expect to obtain GMP certification and start commercial production when our Guizhou facility resumes production in 2014."

"Finally, we closed our share repurchase transaction in the third quarter, under which we repurchased approximately 1.48 million shares of our common stock, representing approximately 5.49% of the total common stock outstanding as of August 2, 2013, from one of our individual shareholders. We believe this share repurchase has improved our Company's shareholder structure, enhances shareholder value and may also improve our EPS performance."

Outlook

For the full year of 2013, the Company expects to meet the high end of its total sales forecast range of $195 million to $205 million. Based on the Company's strong margin performance in the third quarter and favorable outlook for the remainder of the year, it is raising its full year non-GAAP adjusted net income estimate to the range of $58 million to $60 million, a 13-16% increase from the estimate provided last quarter.


Wednesday, August 7, 2013
Comments & Business Outlook

Second Quarter 2013 Financial Results

  • Total sales in the second quarter of 2013 increased by 6.2% to $53.6 million from $50.5 million in the same quarter of 2012.
  • Gross profit increased by 9.1% to $37.5 million from $34.3 million in the same quarter of 2012. Gross margin increased to 69.9% in the second quarter of 2013 from 68.0% in the second quarter of 2012.
  • Income from operations increased by 18.8% to $25.3 million from $21.3 million in the same quarter of 2012. Operating margin increased to 47.2% in the second quarter of 2013 from 42.2% in the same quarter of 2012.
  • Net income attributable to the Company increased by 25.9% to $16.2 million from $12.8 million in the same quarter of 2012. Fully diluted net income per share was $0.57 in the second quarter of 2013 as compared to $0.46 in the same quarter of 2012.
  • Non-GAAP adjusted net income attributable to the Company was $17.4 million, representing a 30.8% increase from $13.3 million in the same quarter of 2012. Non-GAAP adjusted net income per share was$0.62, compared to $0.50 in the same quarter of 2012.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We were pleased with our second quarter improvement in the quality of our business highlighted by steady sales growth, improved margins and several operational accomplishments. In the past quarter, market demand for our plasma-based products remained strong, which led to increased human albumin product revenue. In the first half of 2013, despite increased import levels in China of foreign human albumin, domestic pricing across our plasma portfolio remained largely stable as the overall market continues to show steady signs of growth, however we will continue to closely monitor market trends related to albumin import volume, and will adjust our pricing and product shipments accordingly. In the coming quarters, we aim to preserve our margins through transitioning to a more profitable product mix and implementing efficient cost control measures. We were glad to achieve improved plasma utilization efficiency following the launch of Factor VIII products. For the second quarter, sales of Factor VIII contributed approximately 2% of total sales and we expect its sales contribution to gradually increase in the long run."

"During the second quarter, our new plasma station in Cao County, Shandong Province commenced plasma collection operations. Additionally, our Shandong Taibang production facility obtained renewed GMP certification from the China Food and Drug Administration ("CFDA") at the end of June, ahead of schedule. Additionally, inGuizhou, we halted production at this facility on June 1st as planned and remain on track with the facility upgrade plan. We currently expect to resume production at Guizhou Taibang in the first quarter of 2014."

Mr. Gao concluded, "The Company announced that it is has entered into a redemption agreement with Ms. Lin Ling Li, an individual shareholder of the Company and her spouse, pursuant to which the Company agreed to redeem 1,479,704 shares of its common stock, representing approximately 5.49% of the total common stock outstanding on August 2, 2013. The redemption price is $20.00 per share, and the redemption shares will become treasure stock of the Company upon closing of the redemption. We believe this share redemption will improve China Biologic's shareholder structure, enhance shareholder value and benefit other existing shareholders of the company. "

Outlook

For the full year of 2013, the Company reiterates its full year financial forecast of total sales in the range of $195 million to $205 million and full year non-GAAP adjusted net income in the range of $50 million to $53 million. This guidance assumes the production suspension at the Company's Guizhou facility, only organic growth and excludes acquisitions and necessarily assumes no significant adverse product price changes during 2013. Please note that the Company's 2013 financial outlook may be subject to change depending on market conditions and the GMP upgrade status at the Company's Guizhou Taibang facility.


Monday, August 5, 2013
Deal Flow

Item 1.01 Entry into a Material Definitive Agreement.

On August 2, 2013, China Biologic Products, Inc. (the “Company”) entered into a Redemption Agreement (the “Redemption Agreement”) with Ms. Lin Ling Li (“Ms. Li”), an individual shareholder of the Company, and Mr. Ze Qin Lin (“Mr. Lin”), the spouse of Ms. Li, pursuant to which the Company agreed to redeem 1,479,704 shares of its common stock (the “Redeemed Shares”), representing approximately 5.49% of the total common stock outstanding on August 2, 2013. The redemption price is $20.00 per share and $29,594,080 (the “Redemption Price”) in the aggregate. The Redeemed Shares will become treasury stock of the Company upon closing of the redemption.

The Company’s obligation to redeem the Redeemed Shares is subject to certain conditions, among which a settlement agreement (the “Settlement Agreement”) has to remain effective and valid. The Settlement Agreement was entered on July 26, 2013 between Ms. Li and Mr. Lin and certain plaintiffs in the pending lawsuit filed in the High Court of Hong Kong (the “HK Lawsuit”) against Ms. Li, Mr. Lin and certain other defendants to settle the title dispute between such plaintiffs and Ms. Li and Mr. Lin in respect of the Redeemed Shares. Pursuant to the Redemption Agreement, $11,837,632 out of the Redemption Price will be paid to the plaintiffs’ representative at the closing of the redemption as the one time cash settlement payment under the Settlement Agreement. For more information on the HK Lawsuit, please refer to the current report on Form 8-K filed by the Company with the SEC on March 12, 2012.


Monday, June 10, 2013
Comments & Business Outlook

BEIJING, June 10, 2013 /PRNewswire-FirstCall/ -- China Biologic Products, Inc. (Nasdaq: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the Company has waived the application of its Preferred Shares Rights Agreement dated as of November 20, 2012 (the "Rights Agreement") to the RAAS SPA (as defined below).

On May 21, 2013, Shanghai RAAS Blood Products Co., Ltd. ("RAAS"), a public company listed on the Shenzhen Stock Exchange and a direct competitor of the Company in China, entered into a stock purchase agreement with Ms. Siu Ling Chan ("Ms. Chan"), one of the stockholders of the Company, and her spouse, Mr. Tung Lam (the "RAAS SPA", and the share acquisition transaction contemplated thereby, the "Proposed RAAS Transaction"). Based on the terms of the RAAS SPA, the board of directors of the Company previously determined on May 29, 2013 that RAAS had become an Acquiring Person as defined under the Rights Agreement.

On June 7, 2013, RAAS issued a public announcement in Chinese, stating that the shareholders of RAAS who attended its special shareholders meeting held on the same day have unanimously voted against the Proposed RAAS Transaction and RAAS has determined to terminate the Proposed RAAS Transaction. Later on the same day, Ms. Chan filed a Schedule 13D/A (the "Chan 13D/A") and RAAS filed a Schedule 13G (the "RAAS 13/G") with the U.S. Securities Exchange Commission. Both the Chan 13D/A and the RAAS 13/G state that the RAAS SPA was mutually terminated by the parties thereto on June 7, 2013, effective retroactively as of May 21, 2013, the date on which the RAAS SPA was executed (the "RAAS SPA Termination"). In light of the RAAS SPA Termination, the board of directors of the Company made a determination today to waive the application of the Rights Agreement to the RAAS SPA.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are pleased to learn the termination of the RAAS SPA. Thanks to our board of directors with the majority members being independent directors, prompt and decisive actions were taken in the best interest of our company and shareholders as a whole to prevent a direct competitor from disrupting our strategic development through an unfriendly acquisition of a significant minority stake in our company. We are highly confident in our business strategies as well as the growth opportunities ahead and will continue to focus on solidifying our market position and executing our business plan, while also ensuring corporate governance transparency and increasing shareholder value along the way."


Monday, June 3, 2013
Legal Insights

BEIJING, June 3, 2013 /PRNewswire-FirstCall/ -- China Biologic Products, Inc. (Nasdaq: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the Company received a notice (the "Notice") this morning from a Hong Kong solicitors firm representing the plaintiffs (the "Plaintiffs") in the pending litigation of title dispute (the "Litigation") involving certain shares of the common stock of China Biologic Products, Inc. (the "Company") held by Ms. Siu Ling Chan ("Ms. Chan"), one of the individual shareholders of the Company.

According to the Notice, the Plaintiffs obtained an injunction order (the "Injunction Order") from the High Court of Hong Kong (the "Court") on last Friday, May 31, 2013. The Injunction Order prohibits Ms. Chan from disposing of, charging, encumbering, pledging, transferring, diminishing the value of or otherwise dealing with the 5,362,624 shares of the Company's common stock or any part thereof held in the name of Ms. Chan. According to the Hong Kong solicitors firm representing the Plaintiffs, the Injunction Order will remain in force until further decision by the Court and the Court has set June 7, 2013 as the return date for further hearing. The Hong Kong solicitors firm also indicated that on last Friday, the date of the Injunction Order, a copy of the Injunction Order has been served on the lawyer representing the defendants to the Litigation and Shanghai RAAS Blood Products Co., Ltd. ("Shanghai RAAS"), a public company listed on Shenzhen Stock Exchange. Shanghai RAAS has recently publicly announced its decision to purchase approximately half of the shares of the Company's common stock held by Ms. Chan (the "Shanghai RAAS Transaction").

Although the Company is not a party to the Litigation and has no comment on either the Litigation or the Injunction Order at this stage, given the Injunction Order's direct implications on the Shanghai RAAS Transaction, the Company hereby voluntarily discloses this factual development of the Litigation in the spirit of corporate governance transparency. For the Company's position on the Shanghai RAAS Transaction, please see the series of public announcements made by the Company last week.


Friday, May 24, 2013
Comments & Business Outlook

BEIJING, May 24, 2013 /PRNewswire-FirstCall/ -- China Biologic Products, Inc. (Nasdaq: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the Company has recently learned from a public announcement issued by Shanghai RAAS Blood Products Co., Ltd. ("Shanghai RAAS"), a public company listed on Shenzhen Stock Exchange, that on May 21, 2013, Ms. Siu Ling Chan("Ms. Chan"), one of the shareholders of the Company, and her spouse, Mr. Tung Lam, entered into a stock purchase agreement with Shanghai RAAS. According to the stock purchase agreement, Ms. Chan agreed to sell to Shanghai RAAS an aggregate of 2,657,660 shares of the Company's common stock, representing 9.9% of the Company's outstanding shares (the "Proposed Shanghai RAAS Transaction"). Pursuant to Shanghai RAAS corporate regulations and Chinese law, the transaction is subject to obtaining approval from Shanghai RAAS's shareholders and all necessary governmental authorities or agencies, as well as satisfying certain other closing conditions. Shanghai RAAS also stated in its announcement it has an intention to develop strategic business cooperation with the Company.

China Biologic would like to clarify that the Company had no knowledge of the Proposed Shanghai RAAS Transaction prior to the public announcement issued by Shanghai RAAS, nor has the Company had any communication or discussion with Shanghai RAAS regarding this transaction. The Company considers Shanghai RAAS as one of its direct competitors in China and therefore does not view the Proposed Shanghai RAAS Transaction as a viable transaction. Given the competition between Shanghai RAAS and the Company and the differences between the two companies in terms of business strategies and technological capabilities, the Company currently has no intention to discuss or explore any business cooperation with Shanghai RAAS.

As disclosed in Shanghai RAAS' public announcement, it is apparent that Shanghai RAAS is aware of the fact that Ms. Chan's shareholding status with the Company is under dispute in a pending case in Hong Kong. As previously disclosed by the Company on March 12, 2013 on a Form 8-K filed with the United States Securities and Exchange Commission, the Company was notified, by a Hong Kong solicitors firm representing a group of individuals, of a litigation (the "Hong Kong Litigation") filed in the High Court of Hong Kong against Ms. Chan and her spouse, Mr. Tung Lam as well as certain other defendants. Based on information provided by the Hong Kong solicitors firm, the Company understands that up to 5,178,962 shares of the Company's common stock held by Ms. Chan may be brought into question during the Hong Kong Litigation. Based on the Company's shareholder records, Ms. Chan is currently a registered shareholder of 5,362,624 shares of the Company's common stock.

China Biologic will closely monitor this case and further developments associated with the Proposed Shanghai RAAS Transaction and reserves the right to take any necessary and appropriate actions, including but not limited to implementing the shareholders rights plan to block the Proposed Shanghai RAAS Transaction.


Friday, May 17, 2013
Deal Flow

Item 1.01 Entry Into A Material Definitive Agreement.

On May 14, 2013, China Biologic Products, Inc. (the "Company") and WP X Biologics LLC ("WPX") entered into a registration rights agreement (the "Registration Rights Agreement"), pursuant to which the Company is obligated to file a registration statement with the Securities and Exchange Commission within a pre-defined period, to register an aggregate of 3,112,920 shares of the Company’s common stock (the "Shares") transferred and sold to WPX by Ms. Lin Ling Li, one of the Company’s significant stockholders, pursuant to a share purchase agreement dated April 29, 2013 (the "Purchase Agreement"). The closing of the Purchase Agreement, which occurred on May 14, 2013, was subject to the satisfaction of certain closing conditions, including the Company’s execution of the Registration Rights Agreement. The Registration Rights Agreement also gives WPX certain customary piggyback registration rights.


Thursday, May 9, 2013
Comments & Business Outlook

First Quarter 2013 Financial Highlights

  • Total sales in the first quarter of 2013 increased by 14.4% to $54.0 million from $47.2 million in the same quarter of 2012.
  • Gross profit increased by 18.7% to $37.4 million from $31.5 million in the same quarter of 2012. Gross margin increased to 69.2% in the first quarter of 2013 from 66.7% in the first quarter of 2012.
  • Income from operations increased by 38.0% to $26.0 million from $18.8 million in the same quarter of 2012. Operating margin increased to 48.1% in the first quarter of 2013 from 39.9% in the same quarter of 2012.
  • Net income attributable to the Company increased by 15.1% to $14.9 million from $13.0 million in the same quarter of 2012. Fully diluted net income per share was $0.53 in the first quarter of 2013 as compared to $0.44in the same quarter of 2012.
  • Non-GAAP adjusted net income attributable to the Company was $16.4 million, representing a 29.0% increase from $12.7 million in the same quarter of 2012. Non-GAAP adjusted net income per share was $0.59, compared to $0.48 in the same quarter of 2012.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We were pleased to experience consistently strong demand for our products as well as a favorable pricing environment during the first quarter, which allowed us to enjoy steady top-line growth. Our operating margin continued to climb due to adjustments in our product mix in recent years to include more higher-margin products, the implementation of our direct sales strategy to hospitals and inoculation centers resulting in more favorable pricing power and from the implementation of efficient cost control measures."

"During the quarter, the China Food and Drug Administration ("CFDA") conducted site inspection on Shandong Taibang production facility and we expect to obtain the renewed GMP certification in the third quarter of 2013. We also obtained the required operating permits from local authorities to commence plasma collection at the new station in Cao County, Shandong Province in April and remain on track with commencing plasma collection operations by the end of the second quarter. Additionally, we expect to commence our Guizhou Taibang facility upgrade in the beginning of June which will result in a six-to-nine month production suspension. We have already factored in this suspension to our 2013 financial forecast and have been building inventory in recent quarters to ensure we have adequate customer supply."

Mr. Gao concluded, "We are off to a solid start in 2013 and remain confident we can meet market demand during ourGuizhou production facility transition. Our outlook for the remainder of the year is strong and we reiterate comfort with our full year financial guidance forecast."

Outlook

For the full year of 2013, the Company reiterates comfort with its full year financial forecast of total sales in the range of$195 million to $205 million and full year non-GAAP adjusted net income in the range of $50 million to $53 million. This guidance assumes the anticipated production suspension at the Company's Guizhou facility, only organic growth and excludes acquisitions and necessarily assumes no significant adverse product price changes during 2013


Wednesday, March 13, 2013
Comments & Business Outlook

Fourth Quarter 2012 Results

  • Total sales in the fourth quarter of 2012 decreased by 4.6% to $34.0 million from $35.7 million in the same quarter of 2011.
  • Gross profit decreased by 5.2% to $23.9 million from $25.2 million in the same quarter of 2011. Gross margin decreased to 70.4% in the fourth quarter of 2012 from 70.8% in the fourth quarter of 2011.
  • Income from operations increased by 41.5% to $13.9 million from $9.8 million in the same quarter of 2011. Operating margin increased to 41.0% in the fourth quarter of 2012 from 27.6% in the same quarter of 2011.
  • Net income attributable to the Company increased by 25.3% to $5.8 million from $4.6 million in the same quarter of 2011. Fully diluted net income per share was $0.21 in the fourth quarter of 2012 as compared to$0.18 in the same quarter of 2011.
  • Non-GAAP adjusted net income attributable to the Company was $7.3 million, representing a 15.6% decrease from $8.6 million in the same quarter of 2011.
  • Non-GAAP adjusted net income per share was $0.27, compared to $0.33 in the same quarter of 2011.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We're pleased to see consistently strong demand for our products throughout 2012, which allowed us to enjoy steady top-line annual growth. Our effort over recent years in expanding our sales force and focusing on direct sales to hospitals and inoculation centers has bolstered aspects of our pricing power and reduced our reliance on distributors. We also implemented additional cost control measures since the second half of 2012, resulting in lower selling expenses as a percentage of total sales. Additionally, thanks to enhanced corporate management initiatives, accounts receivable decreased 33.1% year-over-year. Inventories increased 6.1%, in line with production expansion.

"In response to the previously announced delay in construction of our new production facility in Guizhou due to slower-than-expected government approval of land use rights, we implemented an alternative strategy to commence upgrading our current production facility at Guizhou Taibang in June or July 2013 to meet the more stringent Good Manufacturing Practice ("GMP") standards that take effect by year end. We expect the comprehensive upgrading to our Guizhou Taibang facility to take six to nine months, during which time we will suspend production at this facility. We expect the upgrade of the production facility will be complete in the first half of 2014. To mitigate the negative impact on sales and ensure supply continuity, we have been increasing inventory levels in the past few quarters, adjusting product shipment plans for 2013, and have been and will continue to increase production volume during the first half of 2013."

Mr. Gao continued, "We are also pleased to announce that in January 2013, Shandong Taibang obtained approval from local authorities to establish a new plasma collection station in Cao County, Shandong Province. We expect to obtain operating permits and commence plasma collection operations by the end of June 2013. Cao County is home to a population of 1.6 million and we expect our new plasma station there to ramp up in the next three years, potentially enlarging our collection base in Shandong by 10 to 15 percent."

Outlook

For the full year of 2013, the Company expects total sales to be in the range of $195 million to $205 million. This guidance assumes, the production suspension at the Company's Guizhou facility, only organic growth and excludes acquisitions and necessarily assumes no significant adverse price changes during 2013. The Company estimates full year non-GAAP adjusted net income to be in the range of $50 million to $53 million.


Wednesday, January 2, 2013
Comments & Business Outlook

BEIJING, January 2, 2013 /PRNewswire-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that the construction of a new production facility at its Guizhou Taibang subsidiary could be delayed due to slower-than-expected government approval of land use rights. The Company is working closely with local authorities to secure approval as soon as possible and will inform investors once it makes material progress in these regards along with an updated schedule for when it expects to complete the new Guizhou facility.

The Company had expected to commence preparation work for this project in late 2012 and complete the project by mid 2014. The Company expects to halt production at its existing production facility in Guizhou by the end of 2013 as a more stringent Good Manufacturing Practice ("GMP") standard enacted by China's State Food and Drug Administration (the "SFDA") goes into effect.

China Biologic is evaluating the possible impacts of a production suspension in Guizhou by the end of 2013 and the delay of the construction of the new facility, including, among others, the possible reduction in sales revenue and possible additional investment in GMP upgrading. To mitigate possible negative impacts and ensure supply continuity, the Company is also evaluating the feasibility of reallocating certain production resources, options to build up inventory, and the feasibility of adjusting shipping plans for 2013.


Tuesday, November 20, 2012
Notable Share Transactions

BEIJING, November 20, 2012 /PRNewswire-FirstCall/ -- China Biologic Products, Inc. (Nasdaq: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that its board of directors has adopted a stockholder rights plan. Pursuant to the plan, the Company will issue a dividend of one right for each share of its common stock held of record by stockholders as of the close of business on November 30, 2012.

The stockholder rights plan, which has a term of two years, is designed to guard against partial tender offers and other coercive tactics to gain control or undue influence of China Biologic without offering a fair and adequate price and terms to China Biologic's stockholders. The plan does not prevent China Biologic's board of directors from considering or accepting an offer to acquire China Biologic if the board believes that such action is fair, advisable and in the best interest of China Biologic's stockholders as a whole.

Each right will initially entitle stockholders to purchase one one-thousandth share of China Biologic's preferred stock for $60.00. However, the rights are not immediately exercisable and will become exercisable only upon the occurrence of certain events. More specifically, if a person or group acquires 10% or more of China Biologic's common stock (including through derivatives) while the stockholder rights plan remains in place, then the rights will become exercisable by all rights holders (except the acquiring person or group) for shares of China Biologic's common stock having a then-current market value of twice the exercise price of a right. However, if a stockholder's beneficial ownership of China Biologic's common stock as of the time of this announcement of the stockholder rights plan and associated dividend declaration is at or above the 10% threshold, that stockholder's existing ownership percentage would be grandfathered, but the rights would become exercisable if at any time after this announcement the stockholder increases its ownership percentage by 2% or more without the prior approval of the Company's board of directors. In addition, if after a person or group acquires 10% or more of China Biologic's outstanding common stock, China Biologic merges into another company, an acquiring entity merges into China Biologic or China Biologic sells or transfers more than 50% of its assets, cash flow or earning power, then each right will entitle its holder to purchase, for the exercise price, a number of shares of common stock of the person engaging in the transaction having a then-current market value of twice the exercise price. The acquiring person will not be entitled to exercise these rights. China Biologic's board may redeem the rights for $0.001 per right at any time before an event that causes the rights to become exercisable.

Until the rights become exercisable, they will not be evidenced by separate certificates and will trade automatically with shares of China Biologic's common stock.

Additional details about the stockholder rights plan will be contained in a Form 8-K to be filed by China Biologic with the U.S. Securities and Exchange Commission.


Friday, November 9, 2012
Comments & Business Outlook

Third Quarter 2012 Financial Highlights

  • Total sales in the third quarter of 2012 increased by 28.6% to $53.1 million from $41.3 million in the same quarter of 2011.
  • Gross profit increased by 31.5% to $36.2 million from $27.5 million in the same quarter of 2011. Gross margin increased to 68.1% in the third quarter of 2012 from 66.7% in the third quarter of 2011.
  • Income from operations was $20.4 million as compared to a loss of $9.4 million in the third quarter of 2011. The operating margin was 38.4% in the third quarter of 2012.
  • Net income attributable to the Company increased to $13.6 million from a loss of $9.4 million in the same quarter of 2011.
  • Non-GAAP adjusted net income attributable to the Company was $14.7 million or $0.54 per diluted share in the third quarter of 2012, representing a 33.2% increase from $11.0 million or $0.42 per diluted share in the same quarter of last year.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We're pleased to see continued strong demand for our plasma products in the third quarter, which allowed us to enjoy robust top-line growth. Our efforts to optimize our sales strategy by focusing more on direct sales to hospitals and inoculation centers and to improve profitability have been effective, evidenced by our operating margin increasing to a sizable 38.4% in the third quarter. Thanks to enhanced corporate management initiatives, accounts receivable and inventory levels also noticeably improved with a 10.7% year-over-year decrease in accounts receivable and a 4.3% decrease in inventories.

"Due to better-than-expected market success combined with efficient selling expense controls, as of the end of the third quarter of 2012, we have surpassed our full-year non-GAAP adjusted net income target. Looking to the fourth quarter, despite some uncertainty following the recent government announcement on price ceilings for some of our products, we believe China Biologic nevertheless will continue benefitting from strong market demand and expand our market penetration. For the full year of 2012, we are confident that total sales will reach or surpass the high end of our previous guidance of $176 million, representing mid-to-high-teens annual growth. We expect non-GAAP adjusted net income to be in the range of $46 million to $48 million, compared to previous guidance of $38 million to $40 million."

Mr. Gao continued, "We are also proud to announce that we received Good Manufacturing Practice certification for our Human Coagulation Factor FVIII ("FVIII") production facility from the Chinese State Food and Drug Administration in October and have since started commercial production of FVIII. This development rounds out our plasma product portfolio and further strengthens our competitive position as a leading plasma-based biopharmaceutical company inChina. Going forward, we intend to continue to develop and manufacture leading life-enhancing, quality-assured products."

Outlook

For the full year of 2012, the Company now expects sales to reach or surpass the high end of previous guidance of$176 million, representing mid-to-high-teens annual growth. The Company estimates full year non-GAAP adjusted net income to be in the range of $46 million to $48 million, compared to the previous guidance range of $38 million to $40 million.


Friday, August 10, 2012
Comments & Business Outlook

Second Quarter 2012 Financial Highlights

  • Total sales in the second quarter of 2012 increased by 21.1% to $50.5 million from $41.7 million in the same quarter of 2011.
  • Gross profit increased by 17.8% to $34.3 million from $29.2 million in the same quarter of 2011. Gross margin was 68.0% in the second quarter of 2012 compared with 70.0% in the second quarter of 2011.
  • Income from operations increased by 23.7% to $21.3 million from $17.2 million. The operating margin was 42.2% in the second quarter of 2012 compared with 41.4% in the second quarter of 2011.
  • Net income attributable to the Company was $12.8 million, a decrease of 22.7% from $16.6 million in the same quarter of 2011. Non-GAAP adjusted net income attributable to the Company was $13.3 million or $0.50 per diluted share in the second quarter of 2012, representing a 52.2% increase from $8.7 million or $0.33 per diluted share in the same quarter of last year.

Mr. David (Xiaoying) Gao, Chairman and chief executive officer ("CEO") of China Biologic, commented, "The latest quarter and first half of the year represented periods of positive change and growth at the Company. In the second quarter, both sales and income from operations grew over 20%. Non-GAAP adjusted net income attributable to the Company increased 52.2% to $13.3 million. As of the end of the first half of 2012, we have achieved over 50% of our full-year revenue target. Our direct sales model allows us to achieve better margins on most of our products and we also experienced increased market demand due to industry supply shortage for most plasma products during the period."

"We are also pleased to announce that we received the manufacturing approval certificate from the SFDA for Human Coagulation Factor VIII in June 2012 and expect to commence commercial production later in 2012. This is a milestone for China Biologic, as the Company rounds out its product portfolio and reinforces its market leadership."

Mr. Gao continued, "While focused on developing new plasma sources to grow our market penetration, internally China Biologic continues to strengthen its corporate governance structures as well. During the first half of 2012, the Board of Directors implemented key senior personnel changes, including my appointment as Chairman and CEO, and Mr. Ming Yang's appointment as CFO. We believe we now have a strong executive team in place with valuable experience in Chinahealthcare industry to implement the Company's business strategies, ensure transparency and increase long-term shareholder value. At the board level, we are also proud to have added industry veteran Mr. Albert Yeung as an independent director."

Outlook

For the full year of 2012, the Company reiterates sales guidance of between $168 million and $176 million, representing a year-over-year growth of between approximately 10.0% and 15.0%. The Company estimates full year non-GAAP adjusted net income to be in the range of $38 million to $40 million.


Monday, June 25, 2012
Hot Bio-Tech News

BEIJING, June 25, 2012 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced that its indirectly owned subsidiary, Shandong Taibang Biological Products Co., Ltd. ("Taibang") has received a manufacturing approval certificate from the China State Food and Drug Administration ("SFDA") for Human Coagulation Factor VIII ("FVIII"). With this certificate, the only approval remaining for Taibang's commercial production of FVIII is the SFDA's good manufacturing practice ("GMP") certification of the FVIII production line itself.

Taibang began research for FVIII in 2007 and successfully developed the technology in 2008. The Company conducted clinical trials from 2009 to 2010. In June 2010, the Company submitted required materials to Center for Drug Evaluation for approval to start manufacturing and passed on-site products verification in January 2011. The Company received official manufacturing approval certificate on June 21, 2012. FVIII will be primarily used in the treatment of hemophilia A.

Mr. David Gao, Chairman & CEO, said, "Receiving SFDA manufacturing approval represents the culmination of more than five years of work and the first technological approval of a coagulation factor product developed by Taibang. With the addition of Factor VIII, we should soon be able to offer three major categories of blood products: albumin products, immunoglobulin products and coagulation factor products. This will further strengthen our competitive position as a leading plasma-based biopharmaceutical company in China."

"We are very proud to bring FVIII to hemophilia A patients in China," continued Mr. Gao. "We believe that Human Coagulation Factor VIII addresses a critically unmet need of a large patient population and helps ease under-supply of coagulation products. Although it is not possible to specify a definitive timeframe in which we will receive GMP approval, we expect our FVIII production to be inspected by SFDA and then GMP certified by the end of 2012. Going forward, we intend to continue to develop and manufacture life-enhancing, effective, quality-assured products."


Thursday, June 21, 2012
Investor Alert

ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

On June 20, 2012, the board of directors (the “Board”) of China Biologic Products, Inc. (the “Company”) nominated Mr. Guangli Pang to succeed Mr. Tung Lam as the Chief Executive Officer of Shandong Taibang Biological Products Co. Ltd. (“Shandong Taibang”), our majority owned operating subsidiary. Mr. Pang has been the Deputy Chief Executive Officer of Shandong Taibang since its inception and has extensive experience in the pharmaceutical industry in China. The Board has also removed Mr. Lam from any other positions he currently holds at the Company and its subsidiaries. These management changes are expected to be finalized upon the completion of necessary administrative procedures under PRC laws and the constitutional documents of each relevant subsidiary.


Monday, June 4, 2012
Investor Presentations
On June 4, 2012, 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 7, 2012

Wednesday, May 9, 2012
Comments & Business Outlook

Financial highlights for the first quarter 2012

  • Total sales increased 37.0% to $47.2 million in the first quarter 2012 from $34.5 in the first quarter 2011.
  • Gross profit increased 25.2% to $31.5 million in the first quarter 2012 from $25.2 million in the first quarter 2011.
  • Income from operations increased 29.6% to $18.8 million in the first quarter 2012 from $14.5 million in the first quarter 2011.
  • GAAP net income attributable to China Biologic increased 105.4% to $13.0 million in the first quarter 2012 from $6.3 million in the first quarter 2011.
  • GAAP net income attributable to China Biologic per diluted share was $0.44 in the first quarter 2012 compared with $0.23 per diluted share in the first quarter 2011.
  • Non-GAAP adjusted net income attributable to China Biologic increased 59.6% to $12.7 million in the first quarter 2012 from $8.0 million in the first quarter 2011.
  • Non-GAAP net income attributable to China Biologic per diluted share was $0.48 in the first quarter 2012 compared with $0.31 per diluted share in the first quarter 2011.

CEO Comments

Mr. Colin (Chao Ming) Zhao, Chief Executive Officer & President of China Biologic, said, "Our results for the first quarter 2012 were quite good, with sales up 37.0%, net income attributable to China Biologic up 105.4%, and diluted earnings per share up 91.3%, compared with the first quarter 2011. Our adjusted non-GAAP net income attributable to China Biologic also was up 59.6%, first quarter 2012 from first quarter 2011.

"This performance is especially gratifying, given that our sources of raw plasma supply were reduced by the closing of four of our plasma collection stations in August last year as directed by the Guizhou provincial government. Those stations had accounted for about 34% of our total raw plasma volume collected in 2010. We believe our first quarter 2012 performance shows that our interim strategy is working well.

"The demand for most of our plasma products continues to hold relatively strong, driven in the long-term by China's growing and aging population, increasing urbanization, economic growth, and the government's promotion of health care and its strategies and policies that encourage the expansion in plasma collection and the use of plasma products.

"Most importantly, Mr. Zhu Chen, China's Minister of Health, has encouraged the country to double plasma supply from 2012 to 2016, as part of China's newest five-year plan. According to Mr. Chen, the current supply of plasma can barely meet half of the potential demand for plasma protein products. We continue to hope and believe that the Minister's statements will induce local governments to support and cooperate in broadening the regions for developing and building new plasma collection stations, which are vital to the nation's health.

"Our interim strategy to bridge the period of shorter raw plasma supply includes developing alternative solutions and opportunities to mitigate the plasma reduction from the closed collection stations, reallocation of resources from the closed stations to maximize their use within our company, and aggressively seeking new regions for new plasma stations. The process of locating and developing new stations includes numerous time-consuming activities and uncertainties, including analyzing and selecting the appropriate locations for successful plasma stations, gaining the extensive and detailed sequential approvals at various levels of government, station construction, equipment installation, inspections and licensing, and donor promotion and education programs.

"We also have adjusted our production plan and sales and marketing strategy to leverage our continuing plasma resources to maximize profit, given the changing market dynamics. We have focused on supplying our life-saving products through direct sales to those facilities with patients who have the most critical medical needs and to our best long-term customers. We are also focusing on our most profitable products. Our transition to direct sales continues to progress well. Clearly, those actions have started to deliver good performance in the first quarter of 2012.

"Our new product pipeline also continues to look good. We await approval from China's State Food and Drug Administration to begin selling our new Human Prothrombin Complex Concentrate and our new Human Coagulation Factor VIII. In addition, in the first quarter this year, we were authorized to begin phase III clinical trials for a new product, human fibrinogen, that is designed to be used to treat congenital or acquired fibrinogen deficiency associated with serious liver damage, cirrhosis, disseminated intravascular coagulation, or coagulation disorder resulting from the lack of fibrinogen related to postpartum hemorrhage, major surgery, trauma, or acute bleeding.

"Several words of caution are in order. If China's human health conditions change to require our products to help defend against major outbreaks of diseases, our inventory of plasma could be reduced, since we have less ability to collect higher levels of plasma due to having fewer plasma collection stations. As a result, we may not have the flexibility we currently have to choose the use of our plasma inventory to create and sell our most profitable products. Should major outbreaks of diseases occur, we would not likely be able to deliver improving financial performance. Because diseases are not easy to predict, we cannot estimate or assign a probability to that category of risk.

"With the additional assistance and support from our board of directors, we remain committed to accelerating our long-term earnings growth in the future by expanding our research and development and new product pipeline, increasing our direct sales to institutional customers rather than through distributors, expanding our geographic reach, locating and creating new raw plasma sources, and pursuing possible prudent acquisitions and mergers and potential international collaborations.

"With this good start to the year 2012, we are continuing to take the actions we believe will achieve our strategic goals that include creating long-term additional value for shareholders through outstanding products that are vital to human health."


Saturday, April 28, 2012
CFO Trail
Mr. Y. Tristan Kuo resigned from his position as the Company’s Chief Financial Officer and from any other positions he currently holds at the Company’s subsidiaries, effective May 31, 2012. Mr. Kuo is pursuing a new career opportunity and will serve the Company as an independent consultant for the next twelve months. The Company’s Board of Directors (the “Board”) appointed Mr. Ming Yang, the Company’s Vice President-Finance & Compliance and Treasurer, as the interim Chief Financial Officer, effective May 31, 2012.

Tuesday, April 3, 2012
Corporate Governance

BEIJING, April 2, 2012 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), one of the leading plasma-based biopharmaceutical companies in the People's Republic of China, today announced that its Board of Directors has adopted a series of measures to improve the Company's corporate governance, especially to enhance the independence and transparency of the Board.

The Board elected Mr. David (Xiaoying) Gao as Chairman of the Board of Directors with effect on March 30, 2012. Mr. Gao succeeds Ms. Siu Ling Chan who served for more than five years as China Biologic's Chairwoman. Ms. Chan will remain as a Director on the Board.

In addition, the Board, in accordance with Article III of the Company's Amended and Restated Bylaws, increased the size of the Board from seven to nine directors. The Board intends to appoint two additional independent directors to fill the vacancies created by such increase. The Governance and Nominating Committee of the Board is authorized to make recommendations to the Board regarding independent director candidates.


Saturday, March 24, 2012
Investor Alert

On March 19, 2012, China Biologic Products, Inc. (the “Company”) received a written consent (the “Written Consent”) signed by two shareholders who beneficially own 5,392,624 shares of common stock of the Company. The Written Consent purports to remove Dr. Tong Jun Lin from the board of directors of the Company and appoint Mr. Joseph Chow to fill the vacancy created by such removal. The Company believes that the number of shares owned by the shareholders who delivered the Written Consent does not constitute a sufficient number of shares to effectuate the purported action by the Written Consent. According to Amendment No. 4 to Schedule 13D filed by Lin Ling Li, a shareholder of the Company, dated March 19, 2012, Ms. Li delivered a written request to certain other stockholders of the Company soliciting their signature to the Written Consent in an attempt that stockholders owning at least a majority of the outstanding capital stock of the Company would sign the Written Consent. As of the date hereof, the Company has not received a Written Consent signed by shareholders owning enough shares to effectuate the action purported thereby.

After the Company received the Written Consent signed by the two shareholders, the board of directors of the Company held a special board meeting on March 19, 2012, at which Dr. Tong Jun Lin resigned as a director of the Company, a member of the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee, and as Chairman of the Governance and Nominating Committee, effective immediately. Dr. Lin stated that his 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.


Notable Share Transactions
On March 15, 2012, Chao Ming Zhao, Chief Executive Officer and President of China Biologic Products, Inc. (the "Company"), adopted a Rule 10b5-1 trading plan (the "Plan"), pursuant to which, through a broker, Mr. Zhao will sell up to 200,000 shares of common stock of the Company over a 12-month period. Mr. Zhao entered into the Plan as part of his personal long-term investment strategy for asset diversification and liquidity and he will have no control over the timing of the sales of shares of common stock under the Plan. Any sale made under the Plan will be publicly disclosed as required by applicable securities laws.

Friday, March 23, 2012
Comments & Business Outlook

BEIJING, March 23, 2012 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), one of the leading plasma-based biopharmaceutical companies in the People's Republic of China, today announced that its indirectly owned subsidiary, Shandong Taibang Biological Products Co., Ltd. ("Taibang"), recently received approval from the China State Food and Drug Administration ("SFDA") to begin clinical trials for its human fibrinogen to be used to treat congenital fibrinogen deficiency and acquired fibrinogen deficiency.Under Chinese regulations, the Company can begin with the phase III clinical trials, which includes the efficacy study, since phases I and II are not required for this product.

Mr. Chao Ming (Colin) Zhao, China Biologic's President & Chief Executive Officer, said, "We are very pleased to receive the SFDA's approval to enter clinical trials for our human fibrinogen product. Our human fibrinogen is made using our internally developed new manufacturing process, which improves product quality, compared with currently available products in the Chinese market. The new process also increases plasma utilization and production efficiency. We plan to secure a patent for our manufacturing invention. We believe this new product also will advance our plasma protein development pipeline. The phase III clinical trials are expected to last about two years, after which we will begin commercial production and sales, assuming the clinical trials prove that the product provides the safe and effective treatments we expect."

The Company began pre-clinical research in 2008 for its human fibrinogen, including its production process development and pharmaceutical research. In 2009, it completed pre-clinical inactivated virus research and validation work related to the product's development. In 2010, the Company conducted the pilot study for human fibrinogen and in mid-2010 submitted its application to the SFDA for approval to start human clinical trials for its human fibrinogen.


Tuesday, March 13, 2012
Comments & Business Outlook

Full Year 2011 Results

  • Total sales increased $13.4 million or 9.6% to $153.1 million for the year ended December 31, 2011, from $139.7 million in 2010, including the benefit of a 5.0% gain from foreign exchange translation. Total sales in terms of RMB increased 4.6% in 2011 from 2010.
  • Gross profit increased $4.3 million or 4.2% to $107.1 million in 2011 from $102.7 million in 2010. The gross profit margin decreased by 3.6% to 69.9% in 2011 from 73.5% in 2010.
  • Income from operations decreased by $36.4 million or 53.0% to $32.2 million in 2011 from $68.6 million in 2010. The year 2011 included a non-cash charge for impairment of goodwill of $18.2 million and non-cash loss on abandonment of long-lived assets of $6.6 million.
  • GAAP net income attributable to China Biologic was $18.2 million in 2011 or $0.37 per diluted share, compared with $31.5 million or $1.30 per diluted share in 2010.
  • Non-GAAP adjusted net income was $36.5 million or $1.37 per diluted share in 2011 compared with $39.0 million or $1.61 per diluted share in 2010.

Mr. Chao Ming Zhao, Chief Executive Officer of China Biologic, said, "As we stated in July, the supply for raw plasma in our Guizhou facility was unfortunately impacted by the closures of our four plasma collection stations at the direction of the Guizhou provincial government's then newly imposed plan. Those stations had accounted for about 34% of our total raw plasma volume collected in 2010.

"Since then, we have developed alternative solutions and opportunities to mitigate the negative impacts of the closures of these plasma collection stations, reallocated resources from the closed stations to maximize their utilization within our company, and continued to aggressively explore new regions for new plasma stations. The process of locating and developing new stations includes numerous time-consuming activities and uncertainties, including analyzing and selecting the appropriate locations for successful plasma stations, gaining the extensive and detailed sequential approvals at various levels of government, station construction, equipment installation, inspections and licensing, and donor promotion and education programs.

"We have adjusted our production plan and sales and marketing strategy to leverage our continuing plasma resources to maximize profit, given the changing market dynamics. We have focused on supplying our life-saving products through our direct sales to those facilities with patients who have the most critical medical needs and to our best long-term customers. We are also focusing on our most profitable products.

"In his recent statement, Mr. Zhu Chen, China's Minister of Health, encouraged the country to double plasma supply from 2012 to 2016, as part of China's newest five year plan. According to Mr. Chen, the current supply of plasma can barely meet half of the potential demand for plasma protein products. We hope the Minister's statements will induce local government's support and cooperation in broadening regions for development and building of new plasma collection stations.

"The demand for most of our plasma products continues to hold relatively strong, with China's growing and aging population, increasing urbanization, and economic growth, the government's promotion of health care and its strategies and policies that encourage the expansion in plasma collection and use of plasma products.

"We remain committed to accelerating our long-term earnings growth in the future by focusing on broadening our research and development pipeline, strengthening our direct institutional sales, expanding our geographic reach, locating and creating new raw plasma sources, pursuing possible prudent acquisitions and mergers and potential international collaborations.

"We will continue to take the actions needed to achieve our strategic goals to create additional value for shareholders through outstanding products that are vital to human health."

Guidance and business outlook for 2012

China Biologic expects 2012 revenue to be in the range of $168 million and $176 million. This guidance assumes only organic growth and excludes acquisitions and construction of new facilities. The guidance necessarily assumes no significant adverse price changes as a result of provincial tendering or additional price control imposed by National Development and Reform Commission (NDRC) during 2012.

The Company expects 2012 adjusted net income to be in the range of $38 million to $40 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 2012 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 2012 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 2012 despite anticipated growth in sales in 2012.


Monday, November 7, 2011
Comments & Business Outlook

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


Wednesday, October 12, 2011
Corporate Governance
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.

Tuesday, August 9, 2011
Comments & Business Outlook

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:

     

  1. 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.


Tuesday, July 26, 2011
Research

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."


Sunday, July 24, 2011
Analyst Reports

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 

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. 

 

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.


Friday, July 15, 2011
Investor Alert

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.


Tuesday, July 12, 2011
Analyst Reports

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.


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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.

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.
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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.
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Monday, July 11, 2011
Investor Alert

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.


Sunday, June 12, 2011
Investor Presentations
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

Tuesday, May 10, 2011
Analyst Reports

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.


Monday, May 9, 2011
Comments & Business Outlook

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."


Friday, April 1, 2011
Comments & Business Outlook

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

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.


Thursday, March 17, 2011
Comments & Business Outlook

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

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.


Monday, March 7, 2011
Investor Presentations
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.

Tuesday, January 11, 2011
Acquisitions

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

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.


Monday, January 10, 2011
Acquisition Activity

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).


Sunday, December 5, 2010
Investor Alert

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.


Thursday, November 18, 2010
Analyst Reports

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.


Tuesday, November 16, 2010
Comments & Business Outlook

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
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.

Monday, August 16, 2010
Comments & Business Outlook

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.

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.


Tuesday, March 23, 2010
Comments & Business Outlook

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-GAAPa 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)


Tuesday, January 26, 2010
GeoBargain Notes

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.


Monday, November 16, 2009
GeoBargain Notes

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

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.


Tuesday, August 18, 2009
Potential Valuation Scenarios

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

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
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


Wednesday, May 20, 2009
Potential Valuation Scenarios
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


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.

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
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

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

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 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."


Thursday, May 14, 2009
Potential Valuation Scenarios
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


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.

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
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.

Monday, May 4, 2009
Research

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

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."

Reasons for optimism

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

No Recent 52-week high
The stock has recently attained a new 52-week high.
Yes 30% EPS growth rate
Earnings per share (EPS) grew 62.6% in 2008.
Yes 10% revenue growth
2008 Revenues grew 44%.
Yes 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)
Yes 15% ROE
Tax adjusted 2008 Return on Equity (ROE) was at 30%.
Yes The company is seeking to ultimately achieve minimum pre-tax operating margins of 8%.
2008 adjusted (Non-GAAP) pre-tax margins were 45%.
Yes Under 50 million shares
The company currently has 21,434,942 shares outstanding.
Yes High insider ownership
All officers and directors as a group own 63.7% of company stock.
Yes Limited institutional ownership
Yes 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.


Wednesday, January 7, 2009
Comments & Business Outlook

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)


Thursday, September 11, 2008
GeoSpecial Notes
China Bio Product Inc. has released it's September 2009 Investor Presentation