Stock Pick #2 – Jiangbo Pharmaceuticals
Recommended by: Robert Hsu, editor of Asia Edge
Founded in 2003, Jiangbo Pharmaceuticals (NASDAQ: JGBO) is a leader in drug development and manufacturing in China. The acquisition of competitor Hongrui in January 2009 increased Jiangbo’s product portfolio from six to 28, and the company has recently received the final approval for production of its new Felodipine Sustained Release Tablets. The launch of this medication is expected to add +10% to +12% in forward sales. In addition, Jiangbo has three new products in the pipeline awaiting final SFDA approval, giving JGBO a bright future.
As for the company’s financials, Jiangbo has a very healthy balance sheet. As of March 31, the company has almost $108 million cash, $186 million total assets and only $62.6 million total debt. That’s stunning for a biotech firm. Compared to its current market cap of $116 million, the company is trading below its book value. The company grew revenue from $55 million in 2007 to $89.5 million in 2009. Considering the company’s favorable numbers and great product development cycle, Jiangbo Pharmaceuticals is a great buy at current pricing.