Sinovac’s Q1 Doubles Year-Earlier Results

Sinovac Biotech Ltd. (AMEX: SVA) reported a very strong first quarter, maintaining the successes that, across the board, China-based biopharmas have been able to announce for early 2008.

In Sinovac’s case, Q1 revenues were more than twice those of the year-earlier quarter. The company said it generated $8.9 million in sales, an increase of 123%. Gross profit was up 135% at $7.8 million, representing a gross margin of 88%. And net income was up 106% at $1.6 million, or 4 cents per share, fully diluted.

The company said that its revenue increases were driven by Healive, Sinovac’s Hepatitis A vaccine and its lead product. Because Healive is a high margin drug, the rise in Healive sales was also responsible in the increase in company-wide gross margin from 83% a year ago to 88% this year. The company spent heavily to promote Healive, which kept Sinovac’s net income from rising as much as its revenues. In Q1, Sinovac sold 1.5 million doses of Healive, up from 700,000 doses in Q1 of 2007.

So far this year, Sinovac has also completed the following achievements:
• Raised $9.75 million in a private placement;
• Received a production license for Panflu, the company’s whole viron pandemic flu vaccine, which will be added to the national stockpiling program in China;
• Completed Phase I trials of its split-viron pandemic flu vaccine, with plans to start a Phase II trial in Q2.

Sinovac ended the quarter with cash levels of $20.6 million, up from $17.1 million at the end of 2007.

Following the news, Sinovac opened the session higher, but then sold off. It is trading at $4.06, a decline of 28 cents or 6%. At this level, Sinovac has a market capitalization of $164 million and a PE ratio of 21.6.

Disclosure: none.

Comments

[weng ho teng:]

I like the China bio-pharmas. No doubt there is serious opportunity there.

That being said, I must point out the best China investment of 2008 .

MYST.OB will show growing strength thru 2008 and beyond.

That is my favorite stock now.

2008 May 18 10:39 AM

[ChinaMart:]

LTUS reports early next week, and should have excellent results as well. I'm still amazed that the Jim rogers types aren't talking about China pharmas- they're all about ag., travel, energy, and online. But the China pharma sector is growing 20% (or more) yoy, and there are less pharmas competing for that bigger pie due to rapid consolisation. This puts them in an excellent position to continue to report the kind of growth we've seen so far in 2008 for the rest of the year IMO, and makes them among the most attractive of China investments right now.

2008 May 18 03:59 PM