Tiens Biotech Climbs on Improved 2008

Tiens Biotech Group (USA), Inc. (TBV) reported that 2008 revenues rose 41% to $77.2 million. Net income was up 54% to $27.7 million or 39 cents per share, up from 25 cents per share in 2007.

Tiens said its revenues were helped when Tianshi Engineering, a related company that sells Tiens’ products in China, announced in October that it would raise prices. The announcement caused customers to buy Tiens’ nutritional supplements and personal care products before the price increase.

Tianshi Engineering wants to institute a direct selling model to market Tiens’ products in China. China requires a direct selling company to produce part of the product itself. Thus, Tiens sells semi-finished products to Tianshi Engineering, which Tianshi finishes in Tiens’ facilities.

Jinyuan Li, Chairman and CEO of Tiens, owns 95% of Tiens’ outstanding shares. He and his daughter own 100% of Tianshi Engineering.

Tiens markets its 37 nutrition supplements in 46 countries. Currently, Tianshi Engineering markets Tiens’ products in China through chain stores, domestic affiliated companies, and its 98 branches. Ex-China, Tiens sells its products to affiliated companies who use either a direct sales force or multi-level marketing sales force.

Following the announcement, Tiens gained 20 cents to trade at $1.85. The company has traded between $.75 and $5.05 over the past 52 weeks. Tiens now has a market capitalization of $139 million. Its total cash position (including assets held for sale) is $44.9 million.

Disclosure: none.