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China Pharma Holdings (CPHI) forecast that its Q3 revenues would grow between 40% and 45% over the year-previous figures. That would be a better performance than Q2, during which revenues climbed 32%. In the first quarter, however, China Pharma reported a 60% jump in its top line.

The single analyst who follows China Pharma is predicting a 33% gain in Q3. An increase to 40% growth would take the company’s revenues $500,000 higher to approximately $11.5 million.

Ms. Zhilin Li, President and CEO of China Pharma, attributed the increase to expansion of the sales force rather than new drug products.

As we have reported in discussions of China Pharma’s recent financial reports, the company is growing and profitable. The chief reason for concern about its fortunes is its large increases quarter-over-quarter in Accounts Receivable. Some growth in AR is inevitable as a company reports higher revenues, but the increases reported by China Pharma exceeded those levels. At the end of the second quarter, the company announced Accounts Receivable of $27.3 million, an increase of $2.5 million from Q1, and a large number for a company with approximately $11 million in quarterly revenue. As we commented, the increases in AR are felt most immediately in their negative effect upon cash flow. During Q3, China Pharma completed a $10 million private placement.

Currently, China Pharma has 17 off-patent drugs in production. It is developing an additional nine products, two of which are currently awaiting SFDA approval.

Disclosure: none.

Source: China Pharma Raises Revenue Guidance on Sales Force Expansion