China stock profile: Tiens Biotech (TBV)

| About: Tiens Biotech (TBV)

Tiens Biotech Group (ticker: TBV) is a China-based company engaged in the research, development,
manufacturing and marketing of healthcare products. It reported Q4 and FY 2004 results on April 7th. Here's a quick profile of the company, a summary of its Q4 results, and some comments:

Company Profile:

Tiens USA conducts its main business operations through its 80% owned
subsidiary Tianjin Tianshi ("Biological"),
which is based in Tianjin, China. Biological
primarily engages in the research, development, manufacturing, and marketing
of nutrition supplement products, including wellness products and dietary
supplement products, and personal care products. Tiens USA derives its
revenues principally from product sales to affiliated companies in China and
outside of China. Tianshi markets and sells Biological's products in China through its 23
branches, representative offices and chain stores, and nine domestic
affiliated companies. Outside of China, Biological sells its products through an
extensive direct sales force, or multi-level marketing sales force, of
overseas affiliates and independent distributors who use the products
themselves and/or resell them to other distributors or consumers.  These
affiliates are located in approximately 90 countries, including the United

Q4 Results:
(all percentage changes and comparisons are year on
year, unless stated otherwise)

  • Revenue increased 94.0% to $12.8 million.
  • Cost of goods sold increased 373.1% to $6.6 million.
  • SG&A increased 154.5% to $2.3 million.
  • Operating income decreased 8.3% to $4.0 million.
  • Net income increased 23.1% to $3.0 million.
  • EPS of $0.04 versus $0.03.

Balance Sheet (as of December 31, 2004):

  • Cash and equivalents: $39.2 million.
  • LT debt: $10.8 million.

Jinyuan Li, Chairman, President and CEO of Tiens Biotech Group (NYSE:USA) on FY 2004:

....We are very pleased with our growth in revenue, net income and
gross profits for 2004.  We are confident in Tiens USA ability to generate
future domestic and international revenue growth as we continue to capitalize
on the growing popularity among consumers for our unique wellness and dietary
supplement products worldwide.

Management Bio:
Jinyuan Li, Chairman, President and CEO of Tiens Biotech Group (from the latest 10-K):

....Mr. Li has served as the Chairman of the Board and a Director since September 2003.  Mr. Li is also the President and founder of the Company.  Mr. Li has 14 years of experience in the petroleum and plastics industries.  He holds a number of leadership positions in government and social associations, including as commissioner of the Tianjin Political Consultative Conference; Standing Director of China Entrepreneur's National Council; Executive Commissioner of All-China Federation of Industry and Commerce; Vice President of Chinese Bioengineering Association; and Vice president of Chinese Healthcare Association. Mr. Li was elected as one of the Top Ten Most Outstanding Talents in the Great China Area; one of the Ten Most Popular Personages, by China Economic Forum Among the High-Ranking; Excellent Entrepreneur, by the Organization Committee of the Second Chinese Entrepreneur Forum in 2003, and as the Most Creative Chinese Businessman of Asia in 2004. Mr. Li holds a MBA degree from Nankai University.

Notable Directors:
Gilbert D. Raker

Mr. Raker serves as a director of the Company, and has served as the President, Chief Executive Officer and Chairman of the Board of SEMX Corporation (NASDAQ: SEMX) since 1988. SEMX Corporation manufactures materials and components used in the microelectronic circuitry, primarily for the automotive, consumer electronics, defense, medical and aerospace industries. Prior to 1988, Mr. Raker worked at two private equity investment firms and was employed as the Chief Financial Officer of two New York Stock Exchange listed companies and several private companies.  Mr. Raker received his Bachelor of Science degree in Chemistry from Eastern University and his Master of Business Administration degree in Production Management from Syracuse University.

Howard R. Balloch

Mr. Balloch serves as a director of the Company, and has been the President and Chief Executive Officer of the Canada China Business Council since 2001. In addition, Mr. Balloch served as the  "Canadian ambassador to the People's Republic of China from February of 1996 until July of 2001. Mr. Balloch currently serves on the board of directors of the following companies: Magic Lantern Group (AMEX:  GML), Zi Corporation (NASDAQ:  ZICA), Oztime Media, a wholly-owned subsidiary of Zi Corporation, Ivanhoe Energy (NASDAQ: IVAN), Maple Leaf Education Holding and Capital Club, Beijing. Mr. Balloch is the founder and President of The Balloch Group, an investment advisory and merchant banking firm located in Beijing, China. He currently serves as an Adjunct Professor of International Business at the University  of British  Columbia.  Mr. Balloch received his Bachelor of Arts and Master of Arts degrees from McGill University.

Quick Comments:

  • Revenue growing fast - but COGS and SG&A expenses growing faster.
  • TBV has no sell-side analyst coverage.
  • No guidance provided for Q1 2005 or FY 2005.
  • Current market cap (just over 72.0 million shares outstanding) with the stock at about $5.90 is about $425 million.
  • Float: 4.3 million.
  • At about $5.90, the company is trading at a trailing PE of around 15.5x.
  • As of December 31, 2004, Directors and Officers owned 67.8 million shares, or 95.1% of shares outstanding.
  • Website:

TBV's Stock Market Performance:


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Tagged: , Drug Related Products, China, Earnings
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