CMED: Cheap Stock, with Lots of Upside

China Medical (CMED) is a cheap stock with lots of upside. The company is keeping up its end of the bargain by routinely exceeding analyst views. CMED has posted an average surprise of 19.1% over the past four quarters. During the last month, this year's earnings estimates have increased six cents to $1.58 per share. Analysts expect a further 47% jump to $2.31 next year.

China Medical Technologies, Inc. develops, manufactures, and markets medical devices for the treatment of solid cancers and benign tumors in the People's Republic of China. It offers in-vitro diagnostics systems, which include enhanced chemiluminescence immunoassay [ECLIA] system and fluorescent in situ hybridization [FISH] imaging analysis system and probes.

The company's ECLIA system consists of an ECLIA analyzer for detecting minute levels of light, triggered by combining reagents with body fluid samples to produce diagnostic results; reagent kits, which are formulated to create various reactions with blood or other body fluid samples; and a data analysis system to analyze and organize the information produced from diagnostic results.

In late February, CMED reported strong fiscal second-quarter earnings. The company reported net revenues of RMB265.1 million (US$36.3 million) for 3Q FY2007, representing a 64.2% increase from the corresponding period of FY2006. Earnings came in at 48 cents per share, 6.7% ahead of estimates.

"We are pleased to report another strong quarter," commented Mr. Xiaodong Wu, Chairman and CEO of the company. "Our FISH equipment sold to leading Chinese hospitals has generated recurring reagent revenue rapidly, and we expect the FISH business to be another strong growth driver of the company, in addition to our ECLIA business. We completed the BBE acquisition in January 2008 and expect the new acquisition to be accretive starting from 4Q FY2007."

The company last week announced the completion of development of the Prostate Cancer FISH Detection Kit, a prostate cancer-specific molecular diagnostic test based on the FISH technology. The company expects to launch the kit in July 2008.

CMED has posted an average surprise of 19.1% over the past four quarters. During the last month, this year's earnings estimates have increased six cents to $1.58 per share. Analysts expect a further 47% jump to $2.31 next year. The stock is cheap at 19.5x next year's estimates, well below its long-term growth rate of 25%.

Comments

[User 112599]

This smacks like a commercial to me....

[german]

what do you think about cmed?
can you give us a better explanation?
let's hear it. mr. 112599.

[Arber]

CMED is a powerhouse. Financials are good, management is good, the potential for CMED is off the charts. They have been curing solid tumor cancers with High Intensity Focused Ultra Sound for over a decade. CURING not postponing. No Chemo necessary, little follow up. They have recently been cleared to sell in Korea and Europe and awaiting clearance from FDA.
BUT...............that is not their only breakthrough product. Maybe not even their most important one. Do some homework here Brother. Don't miss CMED. I bought at 27, sold at 40 bought back in with a vengence at 37. Sky is the limit.


On Apr 06 11:13 AM Heinz wrote:

> what do you think about cmed?
> can you give us a better explanation?
> let's hear it. mr. 112599.

[Jaun]

CMED is toxic. Just check out the stock price and see.

[TEO WHATSWEE]

are you sure you can attained the profit you anticipate to recevied?

[Iceman3108]

Now it`s the time to Buy CMED. It moves sideways through all the quarter, then it makes it`s downside trend like now and it pull`s back again. It is a roller coaster stock but in the end, you will have your reward.