3SOF

no news, nice chart

Quote from: la-onda on April 29, 2008, 11:01:53 PM
no news, nice chart

Indeed la-onda, nice chart

I wrote the following in my latest update:

QuoteI'm positive (as much as one can be these days - the more I know the more I see that I know nothing) that if CHME.OB closes, say, above $3, we'll see $10 over the next 6 - 12 months.

I wrote this because, if CHME manages to close above $3, that tells me (and the market) that warrant holders (there are still warrants convertible into 3,348,686 shares at $2.43) aren't converting and selling shares for a small profit.

A close above $3 would then tell me two things:

1 - People in the know aren't selling, so probably there are good news ahead.

2 - CHME.OB is free to move up more closely to its intrinsic fundamental value, which is, considering the $0.5 EPS in 2007 and 2008 guidance of 21% growth in net income, say, 15 times EPS gives me $7.5 price per share.

Still not $10, but $7.5 would be awesome, considering that this could be just another "falling to zero" OTCBB stock. 

But CHME.OB still closed at just $2.76, so we'll have to wait to see if indeed it closes above $3 or not, before jumping into conclusions saying warrant holders aren't converting and selling around current prices.

I'll keep holding CHME.OB for the long term.

Market not acting well in response to these results.       

Press Release Source: China Medicine Corporation


China Medicine Announces Solid First Quarter 2008 Results
Monday May 12, 9:35 am ET


GUANGZHOU, China, May 12 /Xinhua-PRNewswire/ -- China Medicine Corporation (OTC Bulletin Board: CHME - News; "China Medicine" or "the Company"), a leading distributor and developer of prescription and over-the-counter pharmaceuticals, traditional Chinese medicines ("TCM"), nutritional and dietary-supplements, medical devices, and medical formulations in the People's Republic of China ("PRC"), today reported solid financial results for the first quarter ended March 31, 2008.

    First Quarter 2008 Highlights
    -- Revenues increased 38.6% from Q1 of 2007, to $7.1 million
    -- Gross profit increased 37.2% from Q1 of 2007, to $2.3 million
    -- Operating income increased 49.5% from Q1 of 2007, to $1.4 million
    -- Net income increased 54.0% from Q1 of 2007, to $1.2 million


"During the first quarter, we saw double digit growth in our pharmaceutical product sales compared to the same quarter last year," said Mr. Senshan Yang, Chairman and CEO of the Company. "We are very pleased with the healthy performance of our sales of prescription and over-the-counter medicines as well as our traditional Chinese medicines. This increase in revenues was attributed to the expansion of our distribution network to rural areas in Guangdong Province and the increase in provincial distribution rights through the online bidding system last quarter."

China Medicine usually experiences seasonality in its business such that sales are usually strongest during the last three months of each calendar year, as most pharmaceutical companies and hospitals place purchase orders to stock up their inventory prior to the Chinese New Year holidays. Therefore, sales in the first calendar quarter of each year are typically the lowest.

First Quarter 2008 Results

China Medicine's total revenues in the first quarter were $7.1 million, an increase of 38.6% over the first quarter of 2007. This was attributed to a 40.3% increase in product sales driven by an increase in sales of pharmaceutical products with exclusive distribution rights in Guangdong Province. Product sales totaled $6.9 million and accounted for 97% of total net revenues. Sales of prescription products and over-the-counter products accounted for 58% of total revenues, and TCM accounted for 38% of total revenues for the quarter. Medical formula sales accounted for the remaining 3% of total revenues, totaling $0.2 million. This represented a decrease of 0.1% from the same quarter of 2007.

Gross profit in the first quarter of 2008 was $2.3 million, an increase of 37% over the first quarter of 2007. Gross margin remained the same at 33% of total revenues for the quarters ended March 31, 2007 and 2008. Gross margin improved from 29.4% in the fourth quarter of 2007 due to a decrease in sales of lower margin over-the-counter products.

Operating expenses in the first quarter of 2008 were $0.9 million, up 21.1% from $0.7 million in the first quarter of 2007. This increase was due to higher selling, general and administrative expenses, in line with the increase in revenues in the first quarter of 2008.

Operating expenses represented 12.8% of total revenues in the first quarter of 2008, down from 14.6% in the first quarter of 2007.

Operating income was $1.4 million in the first quarter of 2008, up 50% from $0.94 million in first quarter of 2007. Operating margin was 20.0%, as compared to 19% during the same period a year ago.

Net income for the first quarter of 2008 was $1.2 million, or $0.08 per diluted share, up 54.0% from $0.8 million, or $0.06 per diluted share in the first quarter of 2007. Earnings per share reflect an increase of 2.5 million diluted average shares compared to the first quarter of 2007, primarily due to the exercise of warrants and options.

Financial Condition

As of March 31, 2008, China Medicine had approximately $31.5 million in working capital, an increase of 10.5% from $28.5 million as of December 31, 2007. Also as of March 31, 2008, China Medicine had $5.2 million in cash and cash equivalents, a decrease of 11.2% from $5.7 million as of December 31, 2007. For the quarter ended March 31, 2008, cash used in operating activities was $1.1 million, compared with cash used in operating activities of $0.9 million for the quarter ended March 31, 2007. This increase in cash used in operations was primarily due to an increase in bank-guaranteed trade receivables of $1.7 million which resulted from our growth in sales. Stockholders' equity as of March 31, 2008 was $33.8 million, an increase of 3.7% over the $32.6 million recorded as of December 31, 2007.

2008 Outlook

"We believe our business is well positioned to take advantage of the industry growth as well as the increasing insurance coverage and government support in China," Mr. Yang commented. "Expenditures on pharmaceutical products in China are forecasted to grow 23.5% annually between 2007 and 2011 and reach $126.8 billion in 2011."

"As we enter into the second quarter, we remain focused on our near-term objectives of increasing our exclusive distribution rights and continuing our efforts to bulk up our proprietary product portfolio. We are also planning on identifying a pharmaceutical manufacturing acquisition target to become a more vertically integrated pharmaceutical company. We are confident that we have the right strategies for our Company. With a seasoned management team, we believe that we can continue to successfully execute our business plan going forward," concluded Mr. Yang.

Although China Medicine did not win any new exclusive distribution rights during the first quarter of 2008 due to the Chinese New Year holiday, the Company expects to make bids for, and succeed in obtaining, new exclusive distribution rights throughout Guangdong Province for a number of products before year end.

The Company is also on track to complete the documentation for laboratory trial results for Yutian Capsule for the treatment of chronic obstructive pulmonary disease, and plans to submit them for approval by the State Food and Drug Administration in June 2008. In addition, the Company expects to complete its final laboratory experiments for aflatoxin-detoxifizyme (ADTZ) products in May and to proceed with experiments in animal feed June. Upon successful completion of these experiments and approval of production permit, the Company intends to launch trial sales in late 2008.

Based on China Medicine's solid first quarter performance, the Company expects to meet its prediction of 25-35% growth in revenue with gross margins in the range of 30-35% for the full year 2008. Additionally, the Company also expects to achieve 20-22% growth in net income for the full year 2008.

Conference Call

China Medicine will hold its first quarter conference call for all interested persons at 10:00 a.m. Eastern Time on May 12, 2008 to discuss its results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 800-688-0796. International callers should dial 617-614-4070. When prompted by the operator, mention conference passcode 91479292. If you are unable to participate in the call at its scheduled time, a replay will be available for seven days starting on Monday, May 12 at 12:00 p.m. Eastern Time. To access the replay, dial 888-286-8010 (international callers dial 617-801-6888), and enter the passcode 57612969.

About China Medicine Corporation

China Medicine Corporation is a leading pharmaceutical company which discovers and develops medical formulations and distributes over 2,200 pharmaceutical products in China including prescription and over-the-counter drugs, traditional Chinese medicine products, herbs and dietary supplements. The Company distributes the products to wholesale distributors in 28 provinces and to more than 300 hospitals, 500 medicine companies, and 1,788 drug stores throughout China. The Company actively develops a number of proprietary products for many uses including oncology, high blood pressure and the removal of toxins from food and animal feeds. For more information visit the Company's website at http://www.chinamedicinecorp.com .

Cautionary Statement

This press release contains forward-looking statements concerning the Company's business and products. The Company's actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, obtaining regulatory approval for new products, the expected contribution of higher margin products, government support for rural health care, competition from existing and new competitors, changes in technology, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Medicine Corporation undertakes no duty to revise or update any forward- looking statement to reflect events or circumstances after the date of this release.

I really don`t understand todays price action 
....
Financial Condition

As of March 31, 2008, China Medicine had approximately $31.5 million in working capital, an increase of 10.5% from $28.5 million as of December 31, 2007. Also as of March 31, 2008, China Medicine had $5.2 million in cash and cash equivalents, a decrease of 11.2% from $5.7 million as of December 31, 2007. For the quarter ended March 31, 2008, cash used in operating activities was $1.1 million, compared with cash used in operating activities of $0.9 million for the quarter ended March 31, 2007. This increase in cash used in operations was primarily due to an increase in bank-guaranteed trade receivables of $1.7 million which resulted from our growth in sales. Stockholders' equity as of March 31, 2008 was $33.8 million, an increase of 3.7% over the $32.6 million recorded as of December 31, 2007.

2008 Outlook

"We believe our business is well positioned to take advantage of the industry growth as well as the increasing insurance coverage and government support in China," Mr. Yang commented. "Expenditures on pharmaceutical products in China are forecasted to grow 23.5% annually between 2007 and 2011 and reach $126.8 billion in 2011."

"As we enter into the second quarter, we remain focused on our near-term objectives of increasing our exclusive distribution rights and continuing our efforts to bulk up our proprietary product portfolio. We are also planning on identifying a pharmaceutical manufacturing acquisition target to become a more vertically integrated pharmaceutical company. We are confident that we have the right strategies for our Company. With a seasoned management team, we believe that we can continue to successfully execute our business plan going forward," concluded Mr. Yang.

Although China Medicine did not win any new exclusive distribution rights during the first quarter of 2008 due to the Chinese New Year holiday, the Company expects to make bids for, and succeed in obtaining, new exclusive distribution rights throughout Guangdong Province for a number of products before year end. The Company is also on track to complete the documentation for laboratory trial results for Yutian Capsule for the treatment of chronic obstructive pulmonary disease, and plans to submit them for approval by the State Food and Drug Administration in June 2008. In addition, the Company expects to complete its final laboratory experiments for aflatoxin-detoxifizyme (ADTZ) products in May and to proceed with experiments in animal feed June. Upon successful completion of these experiments and approval of production permit, the Company intends to launch trial sales in late 2008.

Based on China Medicine's solid first quarter performance, the Company expects to meet its prediction of 25-35% growth in revenue with gross margins in the range of 30-35% for the full year 2008. Additionally, the Company also expects to achieve 20-22% growth in net income for the full year 2008.

more information in the CHME April Presentation:
http://www.chinamedicinecorp.com/Investors/Presentations.htm

probably this is a good entry point and the chart will act as a few weeks before?

Volume is the problem. Today it traded half the 60 days average.  Needs around a lot more to make substantial upward moves.  Too many outstanding warrants trying to get out with profit.
IMO

Quote from: la-onda on May 12, 2008, 08:41:00 PM
I really don`t understand todays price action 
....
probably this is a good entry point and the chart will act as a few weeks before?

Hi la-onda,

This could be a «sell the news» short term effect, mixed with the proximity of the $3 resistance level...

Quote from: jorgegr on May 12, 2008, 09:50:52 PM
Volume is the problem. Today it traded half the 60 days average.  Needs around a lot more to make substantial upward moves.  Too many outstanding warrants trying to get out with profit.
IMO

Hi jorgegr,
Yes... volume is always an issue on this kind of stocks  That kind of selling pressure also doesn't helps for now...

Update:

From a technical perspective, Monday's sell-off didn't affect the current short term up swing and we can look into it as part of a normal consolidation process, as CHME just tested the current ascending support located near $2.50. I would say that until CHME remains above this ascending support, we still have a nice short term setup to break through the $3.00 resistance.

Trading Plan:
HOLD CHME.OB

Regards,

MACD looks interesting, stochastics and ADX also positive, Rams what's your point?

Quote from: la-onda on June 03, 2008, 09:09:58 PM
MACD looks interesting, stochastics and ADX also positive, Rams what's your point?

Hi la-onda,
I can't say I enjoy CHME's current chart layout.
About indicators, in stocks like this (with low volume and irregular charts) I don't trust or follow any technical indicators, as they can be easily disturbed by market noise (due to the low volume and liquidity).

We'll keep holding it and wait for developments, but if it makes a new relative low, we'll probably have to drop this one in order to adapt the portfolio to the new strategy requirements.

Trading Plan:
HOLD CHME.OB

Quote from: Ramsburg on June 04, 2008, 09:18:44 AM

We'll keep holding it and wait for developments, but if it makes a new relative low, we'll probably have to drop this one in order to adapt the portfolio to the new strategy requirements.

Hey Ramsburg, where is David? are you guys changing the strategy again from Long-term fundamentals  to Technicals.

China Medicine Maintains Exclusive Rights to Distribute 2,300 Pharmaceutical Products
Monday , June 23, 2008 14:59ET

GUANGZHOU, China, June 23 /Xinhua-PRNewswire/ -- China Medicine Corporation (OTC Bulletin Board: CHME; "China Medicine" or "the Company"), a leading distributor and developer of ethical and over-the-counter drugs, traditional Chinese medicines (TCMs), nutritional and dietary supplements, medical devices, and medical formulations in the People's Republic of China (PRC), today announced it has successfully obtained the exclusive rights to sell 2,300 products included in the Company's current catalogue.

The Company won the exclusive rights through an on-line bidding system called the "Guangdong Sunshine Medicine Public Internet Bidding System." The system was established in 2007 by the Guangdong government to help consolidate the provincial medicine acquisition market and to promote a transparent bidding process. Among the 2,300 products that the Company has maintained exclusive rights to sell, four were developed by China Medicine. They include Ozagrel, a powder-injection that is used for treatment of acute myocardial infarction; Bumetanide, an injection used for treatment of diuretic and chronic kidney failure; Levocarnitine, an injection used for the treatment of coronary heart disease; and Ji Xue Gan Pian, a tablet which is used for the treatment of cuts from surgery and skin disease.

"We are excited that we have bid against more than 1,700 medicine distributors nationwide and have maintained the rights to sell over 2,300 products that were already included in our product catalogue," said Mr. Senshan Yang, Chairman and CEO of China Medicine. "We will be selling our products to hospitals throughout Guangdong Province through an online drug sales system."

China Medicine believes that securing and maintaining the rights to sell the drugs previously included in its portfolio will help to increase revenues going forward since the Company has already gone through the introductory phase, which is typically a period of slower sales when new products are advertised and marketed. With the introductory phase complete, the Company can now focus more on promoting existing drugs thereby increasing sales volume. China Medicine maintains a strong reputation in the pharmaceutical industry and an extensive distribution network.

"China Medicine will continue to actively participate in the online bidding system in order to add more products to our portfolio," commented Mr. Yang. "We will also increase our research and development efforts in order to increase our portfolio of self-developed drugs."

rebounding chart:

double bottom with March low???

Can CHME go lower?

Yes CHME can 

Rams, Aussie whats your trading plan for CHME?

China In-Focus: China Medicine Retains Australian Patent
Friday , July 18, 2008 18:06ET

Jul 18, 2008 (financialwire.net via COMTEX) -- July 18, 2008 (FinancialWire) China Medicine Corp. (OTCBB: CHME) (Current Market Cap. US$28.96 Mil.) has obtained a patent from Australia Patent Office for recombinant Aflatoxin Detoxifizyme. The patent is valid through January 13, 2025.

According to China Medicine, rADTZ is a product that has the potential to detoxify aflatoxin, a potential cancer causing agent, in food and feed. It is a compound that is a derivation of aflatoxin-detoxifizyme, an extracellular enzyme. Developed by Guangzhou Co-Win Bioengineering Co., Ltd., a subsidiary of China Medicine, rADTZ can be used as an additive to remove aflatoxins from animal feed as well as other food products. The company intends to develop rADTZ for this and other applications.

The company is currently testing rADTZ on animal feed and is scheduled to begin working with the Chinese Department of Agriculture on a large scale experiment in order to meet national standards and apply for production permits. Once the company receives production permits, it expects to begin trial sales of rADTZ by the end of 2008.

Update:

CHME reported Q2 results and they are pretty good:

Revenue $11.6M
Gross Profit $4.2M
GP Margin 35.7%
Net Income $2.5M or $0.16 per share

The full release is here http://money.cnn.com/news/newsfeeds/articles/prnewswire/200808130800PR_NEWS_USPR_____CNW019.htm

Now, this is a legacy position as far as I am concerned, the stock has very low liquidity and our plan will be to look to sell into any technical strength that may appear. Perhaps this release may catalyse some momentum and volume to appear.

We will watch the reaction to earnings today and use that as a guide for an exit strategy.

Trade Plan:

HOLD CHME

Update:

The market reacted very well to CHME earnings, volume and momentum were strong and we got a close pretty near to the highs of the day.

Looking at the chart we can see CHME ran into the descending resistance created by the Oct 2007 run. We have 2 key barriers at play here; $2.50 zone (where it is now) and the $3 zone (failed breakouts of Dec 2007 and May 2008. This time we do have significant volume increase and hopefully fundamental story combining to break this extended downturn.

Yesterdays solid candle and volume and the break of some key longer trem averages means we can now construct a trade plan. If this is going to continue onwards I would like to see the 200sma (Green line) hold the price in the upper third of this breakout candle, so that will be my area to watch. I won't put a stop there it won't make sense to do that just yet. Also on the chart I have marked the half way point of yesterdays candle as a reference.

So, for now I am looking for 1) immediate continuation towards $3 or consolidation in the upper area of the bakout candle before resuming upwards again. $3 will probably be a tempting exit point.

Trade Plan:

HOLD CHME