CMED

[BigSully1]

Looking REAL, REAL, good on the ER just out.

http://stockcharts.com/h-sc/ui?s=CMED&p=D&b=5&g=0&id=p59191861522

China Medical Technologies Inc.
No 24 Yong Chang North Road
Beijing Economic-Technological Development Area
Beijing,  100176
China - Map
Phone: 86 10 6787 1166
Fax: 86 10 6788 9588
Web Site: http://www.chinameditech.com

DETAILS  
Index Membership: N/A
Sector: Healthcare
Industry: Medical Instruments & Supplies
Full Time Employees: 334


BUSINESS SUMMARY  
China Medical Technologies, Inc. develops, manufactures, and markets medical devices for the treatment of solid cancers and benign tumors in the People's Republic of China. It offers In-vitro diagnostics systems, which include enhanced chemiluminescence immunoassay (ECLIA) system and fluorescent in situ hybridization (FISH) imaging analysis system and probes. The company's ECLIA system consists of ECLIA analyzer for detecting minute levels of light triggered by combining reagents with body fluid samples to produce diagnostic results; reagent kits, which are formulated to create various reactions with blood or other body fluid samples; and a data analysis system to analyze and organize the information produced form diagnostic results. It offers 62 types of reagent kits for use with the ECLIA analyzer for detecting and monitoring various types of diseases and disorders, including thyroid disorders, diabetes, hepatitis, and disorders related to reproduction and growth, SARS, Down syndrome, liver fibrosis, and various types of tumors. China Medical Technologies also offers FISH imaging analysis system and probes, which uses FISH technology for prenatal and postnatal diagnosis, and early detection and prognosis of various cancers. In addition, the company provides HIFU therapy system to treat liver, breast, and kidney tumors; solid tumors in the pelvic cavity or on bone; and tumors in the four limbs or superficial tissues. It sells its products through direct sales force and distributors. China Medical Technologies was founded in 1999 and is based in Beijing, the People's Republic of China.

---------------------------------------------------------------------------------------------------------------

China Medical Technologies Reports Second Quarter Financial Results
Tuesday November 20, 5:00 pm ET  
FISH Generates Reagent Revenue
Company Raises FY2007 Targets


BEIJING, Nov. 20 /Xinhua-PRNewswire-FirstCall/ -- China Medical Technologies, Inc. (the "Company") (Nasdaq: CMED - News), a leading China-based medical device company that develops, manufactures and markets advanced in- vitro diagnostic products and high intensity focused ultrasound tumor therapy system, today announced its unaudited financial results for the second quarter ended September 30, 2007 (''2Q FY2007''). The Company's 2007 fiscal year ends on March 31, 2008.

   2Q FY2007 Highlights
   -- Net revenues increased by 63.5% year-over-year to RMB214.9 million
      (US$28.7 million).
   -- Non-GAAP adjusted net income, as defined below, increased by 38.8%
      year-over-year to RMB105.1 million (US$14.0 million).
   -- Non-GAAP adjusted diluted earnings per ADS*, as defined below,
      increased by 37.5% year-over-year to RMB3.78 (US$0.50).

   * One American Depositary Share (''ADS'') = 10 ordinary shares

See ''Non-GAAP Measure Disclosures'' below, where the impact of certain items on reported results is discussed.

''We are pleased to report another strong quarter,'' commented Mr. Xiaodong Wu, Chairman and CEO of the Company. ''Our FISH equipment has been placed with over 100 leading hospitals and has generated recurring reagent revenue in September quarter. We expect the FISH reagent revenue to increase rapidly in the following quarters. We are also encouraged by the approval of the Korean FDA on our HIFU system after receipt of the conditional approval from the US FDA for our IDE application. We believe the benefits of HIFU treatment for cancer patients will be gradually recognized by the global medical community over time.''

2Q FY2007 Financial Results

The Company reported net revenues of RMB214.9 million (US$28.7 million) for 2Q FY2007, representing a 63.5% increase from the corresponding period of FY2006.

The Company's revenues are currently generated from three product lines, ECLIA diagnostic systems, FISH diagnostic systems and HIFU tumor therapy systems. ECLIA and FISH system sales include the sales of equipment and reagent kits.

ECLIA system sales for 2Q FY2007 were RMB92.6 million (US$12.4 million), representing an 80.0% increase from the corresponding period of FY2006. The strong year-over-year growth in the ECLIA system sales reflected the increasing utilization of ECLIA analyzers by hospitals and the introduction of new reagents, both of which drove increasing demand for reagent kits.

FISH system sales for 2Q FY2007 were RMB30.8 million (US$4.1 million) after the launch of our FISH systems in June quarter.

HIFU tumor therapy system sales for 2Q FY2007 were RMB91.5 million (US$12.2 million), representing a 14.4% increase from the corresponding period of FY2006. The year-over-year growth in this sector was driven primarily by increases in unit sales and selling price.

Gross margin decreased to 61.5% for 2Q FY2007 as compared to 71.9% for the corresponding period of FY2006. The decrease in gross margin was due to the amortization of FISH intangible assets of RMB18.5 million (US$2.5 million) and FISH equipment sales which generated lower gross margin. Future FISH reagent sales will generate recurring revenue and higher gross margin for the Company. Excluding the impact of FISH amortization, gross margin would be 70.1%.

Research and development expenses were RMB8.1 million (US$1.1 million) for 2Q FY2007, representing a 3.4% year-over-year decrease. The slight decrease was primarily due to the completion of pre-clinical trials in the United States. The Company is in the preparation for the clinical trials in the United States and expects to conduct the trials in early 2008.

Sales and marketing expenses were RMB6.6 million (US$0.9 million) for 2Q FY2007, representing a 48.5% year-over-year increase. The increase was primarily due to more participation in exhibitions and more promotional events relating to the FISH business.

General and administrative expenses were RMB20.9 million (US$2.8 million) for 2Q FY2007, representing a 74.0% year-over-year increase. The increase was primarily due to an increase in relevant employees to accommodate the Company's rapid growth and stock compensation expense arising from a grant of restricted stocks and stock options in June 2007.

Interest income was RMB7.8 million (US$1.0 million) for 2Q FY2007, representing a 2.3% decrease from the corresponding period of FY2006.

Interest expense of convertible notes was RMB9.9 million (US$1.3 million) for 2Q FY2007. The notes bear interest at 3.5% per annum.

Other interest expense of RMB1.2 million (US$0.2 million) for 2Q FY2007 was due to notional interest in connection with the present value discounting of long term other payable of US$10 million for the final payment of the FISH acquisition due in February 2009.

Amortization of convertible notes issuance cost of RMB2.0 million (US$0.3 million) for 2Q FY2007 was due to the US$150 million convertible notes issued in November 2006. The issuance cost is amortized over the five year term of the convertible notes.

Income tax expense was RMB13.9 million (US$1.8 million) for 2Q FY2007 and the effective tax rate for 2Q FY2007 was 15.2%. One of the Company's PRC subsidiaries is entitled to an income tax concession at a rate of 10% which will expire in December 2007.

Under the Enterprise Income Tax Law effective January 1, 2008, China will adopt a uniform tax rate of 25% for all enterprises with certain preferential income tax rates including 15% income tax rate to be applicable to qualified hi-tech enterprises. The related detailed implementation rules and regulations (the ''IRRs'') are expected to be promulgated before the end of 2007. The Company currently believes the IRRs to have no impact on its qualification as a hi-tech enterprise, and believes its current tax rate of 15% will continue to apply. In the event the promulgation of the new IRRs results in a change such that the Company will no longer qualify as a hi-tech enterprise, it will be required to pay income tax in accordance with the IRRs starting on January 1, 2008.

Net income was RMB77.4 million (US$10.3 million) for 2Q FY2007, representing an 8.0% increase from the corresponding period of FY2006.

Adjusted net income excluding stock compensation expense and amortization of acquired intangible assets (non-GAAP) was RMB105.1 million (US$14.0 million) for 2Q FY2007, representing a 38.8% increase from the corresponding period of FY2006. The lower growth rate compared to net revenues was primarily due to convertible note expenses of RMB11.9 million (US$1.6 million).

Stock compensation expense for 2Q FY2007 was RMB5.5 million (US$0.7 million) which was allocated to research and development expenses (RMB0.5 million) and general and administrative expenses (RMB5.0 million).

Amortization of acquired intangible assets for 2Q FY2007 was RMB22.2 million (US$3.0 million) which was recorded as cost of revenues.

As of September 30, 2007, the Company's cash balance was RMB994.2 million (US$132.7 million). Net operating cash flow for 2Q FY2007 was RMB108.9 million (US$14.5 million).

As of September 30, 2007, the Company's accounts receivable was RMB227.3 million (US$30.3 million), representing an increase of 5.6% from the balance at June 30, 2007. The accounts receivable turnover days improved to 119 days from previous 129 days.

For the convenience of readers, certain RMB amounts have been translated into U.S. dollars at the rate of RMB7.4928 to US$1.00, the noon buying rate in New York City for cable transfers of RMB per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York, as of Friday, September 28, 2007.

Outlook for FY2007

The Company has revised the current targets for FY2007 based on better than expected ECLIA reagent business. The revised targeted net revenues for FY2007 range from RMB860 million (US$114.8 million) to RMB885 million (US$118.1 million) from the previous range of RMB830 million to RMB870 million. The revised targeted net revenues represent a year-over-year increase of 57.2% - 61.8%.

The revised targeted adjusted net income excluding stock compensation expense and amortization of acquired intangible assets (non-GAAP) for FY2007 ranges from RMB410 million (US$54.7 million) to RMB420 million (US$56.1 million) from the previous range of RMB390 million to RMB410 million. The revised targeted adjusted net income represents a year-over-year increase of 32.3% - 35.5%.

The revised targeted adjusted diluted earnings per ADS excluding stock compensation expense and amortization of acquired intangible assets (non-GAAP) for FY2007 ranges from RMB14.80 (US$1.98) to RMB15.10 (US$2.02) from the previous range of RMB14.15 to RMB14.80 assuming a diluted number of ADS of 31,000,000 and excluding interest for convertible notes and amortization of convertible notes issuance cost.

These targets are based on the Company's current views on the operating and market conditions which are subject to change.

Non-GAAP Measure Disclosures

To supplement its consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (''GAAP''), the Company uses non-GAAP measures of adjusted net income and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude the impact of stock compensation expense and amortization of acquired intangible assets. Non-GAAP financial measures are used by the Company in their financial and operating decision-making because management believes they reflect the Company's ongoing business in a manner that allows meaningful period-to-period comparison. The Company's management believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company's management also believes the non-GAAP financial measures are useful for itself and investors because it makes more meaningful comparisons of the Company's current results of operations to those of prior periods.

The Company's management believes excluding the non-cash stock compensation expense from its non-GAAP financial measures is useful for itself and investors as such expense will not result in future cash payment and is otherwise unrelated to the Company's core operating results.

The Company's management believes excluding the non-cash amortization expense of acquired intangible assets resulting from acquisitions from its non-GAAP financial measures is useful for itself and investors because such measures enable a more meaningful comparison of the Company's performance between reporting periods. In addition, such amortization will not result in cash settlement in the future.

The presentation of this additional financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure, please see the financial statements included with this press release.

Conference Call

The Company's management team will host a conference call at 8:00 p.m., Eastern Time on November 20, 2007 (or 9:00 a.m. Beijing/Hong Kong time on November 21, 2007) to discuss the results following this earnings announcement.


   The dial-in details for the live conference call are as follows:

   -- U.S. Toll Free Number 1-800-320-2978
   -- International dial-in number 1-617-614-4923
   -- Passcode CMEDCALL.

A live webcast of the conference call will be available on http://ir.chinameditech.com .

A replay of this webcast will be available for one month on this website.

A telephone replay of the call will be available after the conclusion of the conference call through 10:00 p.m., Eastern Time on November 21, 2007.


   The dial-in details for the replay are as follows:

   -- U.S. Toll Free Number 1-888-286-8010
   -- International dial in numbers 1-617-801-6888
   -- Passcode 25502537

About China Medical Technologies, Inc.

China Medical Technologies is a leading China-based medical device company that develops, manufactures and markets advanced in-vitro diagnostics products using Enhanced Chemiluminescence (ECLIA) technology and Fluorescent in situ Hybridization (FISH) technology, to detect and monitor various diseases and disorders, and system using High Intensity Focused Ultrasound (HIFU) for the treatment of solid cancers and benign tumors. For other information, please visit http://www.chinameditech.com .

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute ''forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as ''will,'' ''expects,'' ''anticipates,'' ''future,'' ''intends,'' ''plans,'' ''believes,'' ''estimates'' and similar statements. Among other things, the quotations from management in this press release, the Company's strategic operational plans, as well as outlook for FY2007, contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.




                      China Medical Technologies, Inc.
              Unaudited Condensed Consolidated Balance Sheets

                                                     As of
                                                June 30,
                                   March 31,     2007       September 30,
                                     2007      Restated(1)      2007
                                      RMB        RMB        RMB       US$
                                                (in thousands)
   Assets
   Current assets
   Cash and cash equivalents      1,173,640 1,145,271     994,214   132,689
   Trade accounts receivable        201,778   215,335     227,317    30,338
   Prepayments and other
    receivables                      41,484    45,568      28,175     3,761
   Inventories                       27,991    31,902      34,423     4,594
   Total current assets           1,444,893 1,438,076   1,284,129   171,382

   Property, plant and equipment,
    net                             135,792   147,075     151,333    20,197
   Intangible assets, net         1,565,362 1,523,530   1,480,877   197,640
   Lease prepayments, net             7,619     7,573       7,525     1,004
   Prepayment and other
    receivable                           --        --     164,842    22,000
   Deferred income taxes                542       294          46         6
   Convertible notes issuance
    costs                            38,020    35,447      32,898     4,391
       Total assets               3,192,228 3,151,995   3,121,650   416,620

   Liabilities
   Current liabilities
   Trade accounts payable            47,847    55,499      47,036     6,277
   Accrued liabilities and other
    payables                        594,489   519,555     510,938    68,191
   Income tax payable                38,467    39,252      43,731     5,836
   Dividend payable                      --    83,306          --        --
       Total current liabilities    680,803   697,612     601,705    80,304

   Convertible notes              1,158,480 1,141,800   1,123,920   150,000
   Other payable - long term         67,206    67,794      67,902     9,062
       Total liabilities          1,906,489 1,907,206   1,793,527   239,366

   Shareholders' equity
   Ordinary shares
   US$0.1 par value: 500,000,000
    authorized; 273,600,001
    issued and outstanding as
    of March 31, 2007 and June
    30, 2007 and 274,000,001
    issued and outstanding as
    of September 30, 2007           225,125   225,125     225,425    30,086
   Additional paid-in capital       504,795   506,174     515,909    68,854
   Accumulated other
    comprehensive loss              (21,335)  (25,181)    (29,267)   (3,906)
   Retained earnings                577,154   538,671     616,056    82,220
   Total shareholders' equity     1,285,739 1,244,789   1,328,123   177,254
   Total liabilities and
    shareholders' equity          3,192,228 3,151,995   3,121,650   416,620

   Note:
    (1) Adjustments have been made to restate certain numbers including the
        increase in intangible assets and relevant amortization, the
        recognition of a deferred credit and the decrease in goodwill and
        deferred income taxes liabilities based on the final purchase price
        allocation in connection with FISH acquisition upon completion of
        independent valuation.


                      China Medical Technologies, Inc.
           Unaudited Condensed Consolidated Statements of Income

                                          For the Three Months Ended
                                                June 30,
                                    September     2007       September 30,
                                    30, 2006    Restated(2)       2007
                                       RMB        RMB        RMB        US$
                                        (in thousands except for per ADS
                                                  information)
   Revenues, net (1)                 131,411    151,490    214,896     28,680
   Cost of revenues                  (36,973)   (64,364)   (82,687)   (11,036)
   Gross profit                       94,438     87,126    132,209     17,644
   Operating expenses:
   Research and development           (8,377)    (9,779)    (8,096)    (1,081)
   Sales and marketing                (4,457)    (5,755)    (6,618)      (883)
   General and administrative        (12,026)   (13,946)   (20,929)    (2,793)
   Total operating expenses          (24,860)   (29,480)   (35,643)    (4,757)
   Operating income                   69,578     57,646     96,566     12,887
   Other income                        1,100        100         --         --
   Interest income                     7,970      8,694      7,785      1,039
   Interest expense -
    convertible notes                     --    (10,078)    (9,920)    (1,324)
   Interest expense - other               --     (1,569)    (1,180)      (157)
   Amortization of convertible
   notes issuance cost                    --     (2,043)    (2,011)      (268)

   Income before tax                  78,648     52,750     91,240     12,177
   Income tax expense                 (7,001)    (7,927)   (13,855)    (1,849)
   Net income                         71,647     44,823     77,385     10,328

   Earnings per ADS
     - basic                            2.62       1.71       2.95       0.39
     - diluted (3)                      2.62       1.70       2.88       0.38

   Weighted average number of ADS
     - basic                      27,360,000 26,196,308 26,210,004 26,210,004
     - diluted (3)                27,381,116 26,317,214 30,989,602 30,989,602

   Notes:
    (1) Revenues, net
         - ECLIA                      51,434     79,051     92,585     12,357
         - FISH                           --     14,442     30,801      4,111
         - HIFU                       79,977     57,997     91,510     12,212
                                     131,411    151,490    214,896     28,680

    (2) Adjustments have been made to restate certain numbers including the
        increase in intangible assets and relevant amortization, the
        recognition of a deferred credit and the decrease in goodwill and
        deferred income taxes liabilities based on the final purchase price
        allocation in connection with FISH acquisition upon completion of
        independent valuation.

    (3) In computing diluted earnings per ADS for the three months ended
        September 30, 2007, interest expense and amortization in connection
        with convertible notes were added back to net income before dividing
        by the diluted number of ADS because potential shares from the
        conversion of convertible notes were included.  For the three months
        ended June 30, 2007, the total number of potential shares to be
        converted pursuant to the conversion of convertible notes was not
        included in the computation of diluted earnings per ADS because to do
        so would have been anti-dilutive.



                      China Medical Technologies, Inc.
     Reconciliations of Non-GAAP Adjusted Net Income to GAAP Net Income

                                          For the Three Months Ended
                                                June 30,
                                 September 30,   2007        September 30,
                                     2006      Restated(1)        2007
                                     RMB         RMB         RMB        US$
                                       (in thousands except for per ADS
                                                 information)

   GAAP net income                  71,647      44,823     77,385      10,328
   Adjustments:
   Stock compensation expense          319       1,379      5,538         739
   Amortization of acquired
    intangible assets                3,729      22,475     22,182       2,960
   Non-GAAP adjusted net income     75,695      68,677    105,105      14,027
   GAAP earnings per ADS
    - basic                           2.62        1.71       2.95        0.39
    - diluted(2)                      2.62        1.70       2.88        0.38

   Non-GAAP adjusted earnings per
    ADS
    - basic                            2.75        2.62       4.01       0.54
    - diluted(2)                       2.75        2.61       3.78       0.50

   Weighted average number of ADS
    - basic                      27,360,000  26,196,308 26,210,004 26,210,004
    - diluted(2)                 27,381,116  26,317,214 30,989,602 30,989,602

   Notes:
   (1) Adjustments have been made to restate certain numbers including the
       increase in intangible assets and relevant amortization, the
       recognition of a deferred credit and the decrease in goodwill and
       deferred income taxes liabilities based on the final purchase price
       allocation in connection with FISH acquisition upon completion of
       independent valuation.

   (2) In computing diluted GAAP and non-GAAP earnings per ADS for the three
       months ended September 30, 2007, interest expense and amortization in
       connection with convertible notes were added back to net income before
       dividing by the diluted number of ADS because potential shares from
       the conversion of convertible notes were included.  For the three
       months ended June 30, 2007, the total number of potential shares to be
       converted pursuant to the conversion of convertible notes was not
       included in the computation of diluted earnings per ADS because to do
       so would have been anti-dilutive.



   For more information, please contact:

    China Medical Technologies, Inc.
    Winnie Fan
    Tel:   +86-10-6530-8833
    Email: [email protected]

[WallStreetnBio]

Why would anybody buy this stock?

ok so CMED earned $0.50 this quarter which on a yearly basis would be $2.00. With a 20 PE you get a $40.00 stock. So its fairly priced.

If you look at CDS next quarter they will earn $0.23 which is $0.92 on a yearly basis. With a 20 PE ratio thats $18.40 stock price and the stock is only $9.00 right now. They have been growing income 100% year over year. Can someone explain this to me? Is this stock just under the radar or what?

[BigSully1]

Moving up on volume.

[BigSully1]

Nice follow-thru today.

[BigSully1]

update

[BigSully1]

ER 2/28

[BigSully1]

Anticipating another great ER on Thursday.

[BigSully1]

10:27AM China Medical Tech beats by $0.14, reports revs in-line; reaffirms FY08 EPS guidance, revs guidance (CMED) 55.60 +0.14 : Reports Q3 (Dec) earnings of $0.60 per share, excluding non-recurring items, $0.14 better than the First Call consensus of $0.46; revenues rose 75.4% year/year to $36.3 mln vs the $36.6 mln consensus. Co reaffirms guidance for FY08, sees EPS of $2.03-2.07 vs. $1.52 consensus; sees FY08 revs of $117.9-121.3 mln vs. $125.61 mln consensus.
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little response thus far to the mixed report. CC tonight.