ONE Bio: Trustworthy Chinese Nutraceutical Company
Seeking Alpha Analyst Since 2009
According to research firm Global Industry Analysts, the nutraceutical market, which includes supplements and functional foods and beverages, is expected to surpass $243 billion worldwide by 2015. One company profiting from the significant growth of this industry in the Asia-Pacific region is ONE Bio, Corp. (OTCBB: ONBI), a U.S.-based nutraceutical producer operating primarily in China and Japan.
ONBI has a broad product portfolio that reaches into nearly every subset of the booming nutraceutical market. Its product offerings include in-demand chemical and herbal extracts such as resveratrol and solanesol, health and energy drinks, organic food products, and organic supplements.
The Company’s U.S. management team is highly experienced and has a track record of delivering strong corporate performance. ONBI recently reported record results for fiscal 2010, with 137% sales growth and 82% net income growth year-over-year. This growth was primarily due to an increase in demand for its products as well as two acquisitions the Company completed in the third quarter of 2009, which substantially expanded its product portfolio.
Looking forward, ONBI has several key strategies that will drive growth in both the near and long-term:
While the majority of the Company’s business is currently generated in China, recently announced distribution deals with Sanyo and Toyo, two major Japanese trading companies, should drive further growth for the Company’s organic products division (“OP”) in ONBI’s second largest market: Japan.
Another growth driver for the Company is its recent move beyond simply wholesaling raw materials in its chemical and herbal extract (“CHE”) segment. The successful launch of Ganoderma Tea, ONBI’s first over-the-counter health beverage, demonstrates the Company’s ability to leverage its raw material resources to generate high-margin end-user sales.
Additional catalysts for strong growth will come in the form of key acquisitions. Two potential targets have already been identified: one that will enhance the Company’s OP business segment and one that will accelerate ONBI’s strategy of pursuing high-margin end-user sales in its CHE segment.
With the Company’s strong revenue and earnings growth and its stock trading at a fraction of book value and a fraction of sales (0.7x and 0.5x, respectively) ONBI represents a deep value play with impressive growth characteristics. For more information on why we view ONBI as a great buy at these prices, please read our newly issued research report on the Company available here at RedChip.com.
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