AOB

[la-onda]

Two threads in the open area 

on watchlist:
AOB: Jefferies Starts @ Buy; Sets Tgt @ $20; Analyst Notes
Wednesday, November 21, 2007 08:26ET
Issuer: American Oriental Bioengineering Inc (NYSE: AOB)
Analyst Firm:  Jefferies Group Inc.
Ratings Action: INITIATE
Current Rating: Buy
Target Price Action: INITIATE
Target Price: $20.00

Analyst Comments: AOB has proven its ability to assimilate acquisitions, turning inorganic expansion into a sustainable and value accretive strategy. The firm expects AOB's revenues to expand 32% CAGR over the next three years.

[David Randolph]

Analysis made on May 10th, 2007:

AOB brief technical & fundamental analysis:

Nice buying opportunity when it dipped below $7

I find it impressive how this company's value grew 284 fold over the past five years, from $3 M in 2002 to the current $851 M

And this started out as an OTCBB traded stock, AOB used to be AOBO.OB.

[la-onda]

from Zacks:

Buy China-based AOB
Monday December 31, 3:04 pm ET
By Grant Zeng, CFA

Reiterating his bullish case for American Oriental Bioengineering, Inc. (NYSE: AOB - News), Zacks senior healthcare analyst Grant Zeng, CFA explains why investors should accumulate the stocks of the specialty pharmaceutical company:

\'American Oriental Bioengineering Inc. is a China-based specialty pharmaceutical company which develops, manufactures and commercializes both plant-based pharmaceutical (PBP) and plant-based nutraceutical (PBN) products. The company recently reported strong 3Q07 financial results and we expect the company to continue to deliver strong 4th quarter financials due to relatively high growth in both Traditional Chinese Medicine (TCM) market and nutraceutical market in China.

\'AOB targets two rather large markets in China: the TCM pharmaceutical market and nutraceutical market. We view AOB as a China play stock and growth story. In the past few years from 2003 and 2006, the company achieved more than impressive top line CAGR of 74.1%. EPS grew from $0.15 in 2003 to $0.46 in 2006, a CAGR of 46.5%. Both top-line and bottom-line continued to grow in second quarter of 2007.

\'We believe AOB will ride the wave of Chinese economic growth and increased healthcare spending in the next few years. We believe the company will continue manage its growth through both organic growth and acquisition. Although growth in the PBN sector may level off in the next few years, we believe the company will achieve high growth in the PBP sector going forward.

\'Specifically, we model top-line growth (CAGR) of 37.4% from 2007 to 2009, EPS growth will reach 31.2% CAGR. We recommended AOB shares in the summer of 2007 when price was around $8 per share. Since then, the price has appreciated 80%. We believe there is still room for further price appreciation at current level. Hence, we reiterate our Buy rating on AOB shares and maintain our price target of $16. We arrive at this price target using 22x industry average P/E, multiplied by our estimated 2009 EPS of $1.04, discounted at 20% for two years.\'

&

AOB: CRT Capital Starts @ Buy; Sets Tgt @ $20; Analyst Notes
Wednesday, December 05, 2007 08:35ET
Issuer: American Oriental Bioengineering Inc (NYSE: AOB)
Analyst Firm:  CRT Capital Group
Ratings Action: INITIATE
Current Rating: Buy
Target Price Action: INITIATE
Target Price: $20.00
Analyst Comments: The Firm believes the company is positioned to benefit from the Chinese domestic healthcare system with the recent acquisitions of Chanchun Xinan Pharmaceutical and Guangxi Boke Pharmaceutical.

[BigSully1]

ER Thursday

[la-onda]

nice:

American Oriental Bioengineering Reports Fourth Quarter and Full Year 2007 Financial Results
Thursday March 6, 6:14 am ET
- Revenue Increased 39.0% to $57.3 Million in 4Q07 and 45.7% to $160.5 Million in FY07
- 4Q07 Net Income Increased 39.7% to $15.2 Million, or $0.20 per Diluted Share
- FY07 Net Income Increased 48.3% to $43.3 Million, or $0.61 per Diluted Share
- Company Provides Financial Outlook for 1Q08

NEW YORK, March 6 /PRNewswire-FirstCall/ -- American Oriental Bioengineering, Inc. (NYSE: AOB - News), a leading manufacturer and distributor of pharmaceutical and nutraceutical products, today announced financial results for the fourth quarter and fiscal year ended December 31, 2007.
Revenue in the fourth quarter of 2007 increased 39.0% to $57.3 million from $41.3 million in the fourth quarter of 2006, reflecting continued demand for the Company's core prescription and OTC pharmaceutical products, as well as $4.2 million and $3.2 million from the CCXA and Boke acquisitions, respectively. Revenue from pharmaceutical products increased 51.9% to $47.8 million from $31.5 million in the prior year's fourth quarter, driven by increased demand for Shuanghuanglian Injection Powder, Jinji Series of products, Cease Enuresis Soft Gel and Patch. Prescription pharmaceutical products generated $22.2 million in revenue during the fourth quarter, up 48.9% year over year, and OTC pharmaceutical products generated $25.6 million in revenue during the fourth quarter, up 54.6% year over year. Nutraceutical products generated $9.6 million of revenue in the fourth quarter of 2007 compared to $9.8 million in the fourth quarter of 2006. Nutraceutical products generated 17% of revenue in the fourth quarter of 2007 compared to 24% in the same period of last year, as the Company placed more focus on pharmaceutical product sales.

Gross profit in the fourth quarter of 2007 increased 43.5% to $39.0 million from $27.2 million in the fourth quarter of 2006. Gross margin increased 220 basis points to 68.1% from 65.9% in the prior year's period. The increase in gross profit was a result of higher sales, continued operating cost management, and sourcing and operating efficiencies.

Operating income in the fourth quarter increased 38.1% to $18.8 million, an operating margin of 32.8%, from $13.6 million, an operating margin of 33.1%, in the fourth quarter of 2006, reflecting previously anticipated expenses associated with Boke and CCXA acquisitions. Operating expenses in the fourth quarter increased 48.9% to $20.2 million compared to $13.6 million in the prior year period. This increase was primarily due to increased marketing materials, payroll and shipping expenses commensurate with sales growth. Additionally, the Company increased advertising costs as it continued to invest in its brand.

Net income for the fourth quarter of 2007 increased 39.7% to $15.2 million, or $0.20 per diluted share, compared to $10.9 million, or $0.17 per diluted share, in the prior year's period.

Fiscal 2007 Financial Results

Revenue for the fiscal year 2007 increased 45.7% to $160.5 million from $110.2 million in 2006. Prescription pharmaceutical products generated revenue of $59.0 million, up 30.0% from $45.4 million in the year 2006, and OTC pharmaceutical products generated revenue of $68.8 million, up 102.5% from $34.0 million in 2006. The recently acquired CCXA and Boke businesses contributed revenue of $5.4 million and $3.2 million during the fiscal year 2007, respectively. Revenue from nutraceutical products increased 6.0% to $32.7 million from $30.8 million the year before. Net income for 2007 increased 48.3% to $43.3 million, or $0.61 per diluted share, compared to $29.2 million, or $0.46 per diluted share, in the prior year.

Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, commented, "We are pleased with our fourth quarter and full year 2007 results, and we are particularly encouraged by the synergies we are starting to realize from our recent acquisitions, Boke and CCXA. These transactions round out our product portfolio nicely, and we believe this strengthens our positioning to achieve our goal of building a leading pharmaceutical business in China. We will continue to seek acquisitions that allow us to drive growth through product diversification, brand strength and distribution reach."

Financial Expectations

For the first quarter of fiscal 2008, which is traditionally the seasonally slowest quarter of the year, the Company anticipates revenue of at least $38.0 million and anticipates diluted earnings per share of approximately $0.12. This is based on a diluted share count of approximately 78 million shares outstanding.

Mr. Liu concluded, "We continue to focus on generating organic growth of at least 30 percent in 2008, while also optimizing our recently acquired businesses. With the expertise we have accumulated from past acquisitions, and a cohesive strategic team, we believe that we are well-positioned to be the leading consolidator in this fragmented industry. We are excited by the opportunities in the marketplace and we will continue to work responsibly and aggressively on behalf of our shareholders."

[BigSully1]

very nice la-onda. The current Q guidance is slightly below consensus though. I'll continue holding anyway.

[la-onda]

American Oriental Bioengineering Guides Below Estimates
Thursday , March 06, 2008 07:24ET

Mar 06, 2008 (EarningsWhispers Guidance Summaries via Comtex) -- American Oriental Bioengineering (NYSE: AOB) said it expects first quarter earnings of approximately $0.12 per share on revenue of at least $38.0 million. The current consensus earnings estimate is $0.14 per share on revenue of $41.7 million for the quarter ending March 31, 2008.

[Kublakhan]

March 6, 2008 5:30 PM EST

Piper Jaffray reiterates a 'Buy' rating on American Oriental Bioengineering (NYSE: AOB). Price target raised from $16 to $17.

Analyst, Gur A. Roshwalb, says, "We remain encouraged that AOB is on track with both its organic growth and acquisition strategies. We believe that AOB's roll-up strategy will be successful in the high growth, highly fragmented TCM China market."

American Oriental Bioengineering, Inc. (AOBO) is a pharmaceutical and traditional Chinese medicine (TCM) company, which develops, manufactures and commercializes both plant-based pharmaceutical (PBP) and plant-based nutraceutical (PBN) products.

[BigSully1]

American Oriental Bioengineering and China Aoxing Pharmaceutical Enter Into Strategic Alliance
Tuesday April 15, 4:01 pm ET 
- Joint Effort to Capitalize on China's Narcotic and Pain-Management Market Opportunity -


NEW YORK, April 15 /PRNewswire-FirstCall/ -- American Oriental Bioengineering, Inc. (NYSE: AOB - News), a leading marketer, distributor and manufacturer of pharmaceutical and healthcare products in China, and China Aoxing Pharmaceutical Company, Inc. (OTC Bulletin Board: CAXG - News; "China Aoxing"), a China-based pharmaceutical company specializing in research, development, manufacturing and distribution of narcotic and pain-management products, today announced that they have formed a strategic alliance to jointly commercialize and develop narcotic and pain-management products in China. As part of this alliance, American Oriental Bioengineering will make an equity investment of $18.0 million in China Aoxing.

The size of the narcotic and pain-management market in China is estimated to be roughly US$300 million today, highly underdeveloped versus Western countries, and growing at an estimated compound annual growth rate of 23 percent.(1) China Aoxing is one of only a few manufacturers designated by the China State Food & Drug Administration (SFDA) to operate in the highly regulated narcotics industry.

Under the terms of the agreement, American Oriental Bioengineering makes an equity investment of $18.0 million in exchange for 30 million shares of newly-issued China Aoxing common stock, priced at US$0.60 per share, and owns approximately 38% of China Aoxing. Additionally, with today's announcement, China Aoxing closed its previously announced acquisition of Shijiazhuang Lerentang Pharmaceutical Company Ltd. ("LRT"), a China-based pharmaceutical company focused on pain-management products.

China Aoxing and American Oriental Bioengineering intend to collaborate on sales of China Aoxing's current product portfolio, particularly Naloxone, as well as commercialization of China Aoxing's narcotic drug development pipeline, which includes Oxycodone and Tilidine. The agreement also includes working together in the areas of marketing, branding, international product licensing and research and development.

Mr. Tony Liu, Chairman and CEO of American Oriental Bioengineering, commented, "We found China Aoxing to be a leading pharmaceutical company specializing in new narcotic and pain-management products in China, with very strong research and development capabilities as well as a broad pipeline of products. These two characteristics are complementary to our long-term objectives. Today's announcement allows us to be increasingly flexible in China's dynamic and ever-changing healthcare marketplace, and we are particularly excited about growth opportunities for narcotic and pain-management products in China. Not only is it a vast and relatively untapped market, but it also has extremely high barriers to entry."

Mr. Zhenjiang Yue, Chairman and CEO of China Aoxing, said, "We are delighted to partner with American Oriental Bioengineering, a leading pharmaceutical company in China's healthcare market. Their interest in our core competencies, namely research and development and GMP-certified manufacturing of narcotics, validates our efforts to capitalize on the nascent pain-management opportunity in China. We also look forward to utilizing their sales and marketing expertise and their distribution network for our extended product offering from our newly acquired LRT, a well-known, pain-management focused company with 127 SFDA-approved products in China."

[BigSully1]

From yahoo message board. Adding to my position again.



Comments on deal from Oppenheimer     16-Apr-08 02:45 pm 

"Not just another Acquisition"

Summary: AOB announced an $18MM equity investment in China Aoxing,
a narcotic drug and pain management–focused Chinese specialty pharma
company. While the equity investment didn't follow AOB's historical acquisition
trend, potentially raising a few eyebrows among investors, the transaction
highlighted management's vision to transform AOB from a pure
TCM/nutraceutical play into a full-blown comprehensive pharmaceutical
bellwether in China. With underpenetrated Chinese narcotic drug offering
ample room for growth, we view the CAXG (NR) transaction as a long-term
positive for AOB. We don't expect AOB's minority stake status in CAXG to
materially impact AOB's '08 financials and believe solid execution of AOB's
in-line products will continue to drive >30% y/y organic revenue growth.
AOB/CAXG
alliance immediately establishes AOB's presence in China's highly
regulated, underpenetrated & growing narcotic drug market.
AOB's laser-sharp execution will guide CAXG to grow its in-line
product sales. CAXG's Shuanghuanglian capsule and LRT's OTC-focused
TCM product portfolio fall right into AOB's marketing expertise. 

[BigSully1]

American Oriental Still Intent on Expansion: Buys Stake in China Aoxing. American Oriental Bioengineering Inc. (NYSE: AOB) took a 38% position in China Aoxing Pharmaceutical Company Inc. (OTCBB: CAXG.OB) as part of a deal under which the two companies will jointly develop and market narcotics and pain relievers in China. American Oriental will pay $18 million for 30 million shares of China Aoxing, a price of 60 cents per share. China Aoxing last traded at $1.22 per share, and it moved up 22 cents to $1.54 following the announcement.

China Aoxing concentrates on highly regulated narcotic pain drugs. Only a few China biopharmas have permission to develop narcotic drugs. In March, China Aoxing agreed to acquire Shijiazhuang Lerentang Pharmaceutical Company, another company with pain drugs in its portfolio, for 8 million shares of stock and $10.8 million in cash, even though China Aoxing listed only $1 million in cash available. The investment by American Oriental allowed China Aoxing to close its purchase of Shijiazhuang Lerentang.

American Oriental had $166 million in cash at the end of 2007, and it has been very intent upon increasing its business by buying companies, though usually it has acquired 100% of privately held biopharmas. In 2007, it made at least four such transactions. The company reported its 2007 profits were $43.3 million on revenues of $160.5 million.

The companies noted that the narcotic and pain market in China is currently worth only $300 million annually, implying patients are vastly underserved.

China Aoxing and American Oriental Bioengineering will collaborate on increasing the sales of China Aoxing's current pain drugs, particularly Naloxone, and they will also work to further development of China Aoxing's narcotic drug pipeline, which includes Oxycodone and Tilidine.

[BigSully1]

My intuition tells me that AOB is about to release some pent up energy. Wish I could back that intuition up with some tech expertise, but I am still lacking in that area. 

[buddjas1]

You're right; make or break time for AOB.

[BigSully1]

Thanks for laying out the technical picture Buddjas. I see it  more clearly now.

[la-onda]

BigSully1,
just fyi:
http://www.stockta.com/cgi-bin/analysis.pl?symb=AOB&num1=5&cobrand=windchart&mode=stock

from fous TTT:
AOB has been in a Steady downtrend since it highs its recent highs around $14/share in late 07′ as the market has been unsteady most of 2008. Although it appears that after this negative momentum China looks to be making a rebound as a whole and along with it the undervalued growth stocks such as AOB.  After hitting lows near 7 or a 50% drop from its highs in late 07′ AOB made a strong rebound while forming a bullish ascending triangle that broke out Thursday on increased volume suggesting continued bullish momentum from here.

Fundamentally AOB looks cheap among its peers in the biotechnology industry currently trading at a low P/E of just 14x earnings compared to the industry average 22x. Looking forward analysts are expecting continued strong growth for AOB of 1.02eps in 2009. Given these estimates we could give AOB an estimated fair value within its industry of 22.47/share found by multiplying forward earnings of 1.02 x the biotech average trading multiple of 22.03. Given that AOB's fair value within its industry is 151% above its current share price of 8.95 this is a very appealing investment. I took Thursdays breakout as an opportunity to go long AOB.


cheers
Oliver