Simcere Pharmaceutical Group (SCR)

undervalued

china GROWTH

This Chinese branded pharmaceutical maker seems dramatically underpriced (see pitch by Mr Independent). The stock has performed poorly recently but I think chinese small caps and healthcare stocks will get hot soon. Following BullishBabo

HT mrindependent
I support generic drug companies.

Simcere Pharmaceutical is a rapidly growing generic pharmaceuticals company located in China. The company has tripled its revenues in the last 5 years and seems poised for future growth. Price has dropped recently due to combination of a China stock market pullback and a recent earnings miss. As a result, this extremely attractive company is available for just 1.44 times book value and 15 times estimated 2009 earnings. The balance sheet is sold with approximately $0.70 per share in net cash.

Chinese income growing fast. Population getting older. Water and air polution will increase demand for drugs.

low valuation; great beneficiary of health reform in China; government strong support; cost-effectiveness in rolling out innovative medicine; leading performer in Chinese pharm sector

high eps growth, high cash, low debt

Generics will dominate the drug industry in this Social Communist country.

Solid balance sheet. Look to buy below $9

to much volatility

On the rise...

China is paying the price for their rapid industrial growth in high rates of Cancer and Lung Disease related to the air pollution. China is trying to shift to a green energy model, but in the meantime they have a lot of sick people needing cheap medicines, which this company manufactures. Stock is currently near 52 week low, with loads of upward growth potential in their market. Good long term buy in my opinion.

generic Rx company in China. Obama with his healthcare reform. America's love to solve problems by taking a pill. Very cheap. I can't pass it up.

China! Of course, does chinese growth rings bell to you?

Revenue Growth/Loss (Last 3 Years) ? 25.00%
Profit Margin ? 10.00%
Price to Earnings Growth <1
Debt to Capital (MRQ) ? 30.00%
P/E Ratio (TTM) ? 12
Price to Book (MRQ) <1
4-5 Stars on 11/2/08

This stock is a great choice. By evaluating this company and looking at their growth pattern and their marketing strategies this is a sure fire stock to pick. This company has great leadership with the ability to think outside the box. With the possibility of some future acquisitions this has all the ingredients for wonderful success, short term and long term both. Keep up and watch out. With this outlook ahead, we should also look to the left and right (aka their competion) for huge leaps as well. If you have a little on the side I say diversify within the sector and buy from all the competetors too for they also are looking very solid. That is my pick and I am sticking to it.

This is a play I may change in a few months, as I'm not sure on their long term potential. However, with the earnings coming out August 5, and everything I can read screams that they will meet, or exceed, their estimated earnings, this appears to be a great short term play.

With its current financial strength (assets/liabilities > 6:1), high Net profit margin, and good sales of the core products, the chances of a significant decline is small, particularly given the fact that its near a 52-week low DESPITE earnings having grown more than 80% over the past year. Go figure, earnings grow 80%, sign three new contracts for generic drug distribution, record cash comes in, stock price declines 40%. With more research (to be done this weekend), I may extend my time frame to several years. I'll update as necessary.

Bullish signal stocksabroad