SVA

[logocovet]

Everyone seems to thinkl that SVA is a great long term investment.

So I don't understa

[stout7735]

I must disagree with "everybody"...SVA failure  to begin construction on a promised 20 million dose per year facility   will seriously hamper expected future profits...SVA is a bit player in world vaccine production...

[Stocky2000]

Raising Sinovac's 2007 Financial Estimates Based on Strong 1st Half Results
Rating: Strong Buy 12 Month Price Target: $7.50

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Investor Contributed Research, edited by LM Lupo, FinancialTrader.com



First half results beat our estimates

Last week Sinovac reported 2007 first half revenues of $13.5 mm an increase of 189% over last year and first half earnings per share (EPS) of 9 cents vs. last year's loss of 3 cents. These results greatly exceeded our estimate of $8.9mm for revenues and EPS of 2 cents, estimates that we believe were the most optimistic on the Street.

Contributing to the strong first half revenue results was a recent decision by the Chinese government to begin purchasing Sinovac's Hepatitis A vaccine (Healive™) for the public market. Prior to this development, Sinovac's sales of Healive were only to the private market in China. Additionally, the Chinese government announced in March that it was increasing its funding to RMB 2.8 billion ($368 million) for purchasing vaccines for preventing 15 types of infectious diseases, including Hepatitis A.

Operationally, Sinovac did an outstanding job at managing this increase in demand. Cost of goods sold (COGS) fell to a level of 14.3% of sales (vs. last year's 20.1% and our estimate of 26.5%). Even with the much higher sales volume, total operating expenses were within 2% of our first half estimate of $5.36 mm (see our May research report). As a result of the improved gross margins and tight expense control, Sinovac delivered strong earnings performance of 9 cents per share.

We are raising our second half estimates

After reviewing Sinovac's first half performance and listening to their most recent investor conference call, we have decided to raise our 2007 second half revenue forecast to $19.9mm (from $17.5mm) and second half EPS forecast to 15 cents (from 13 cents). Our latest estimate would result in full year revenues of $33.4mm (up 118% from last year) and EPS of 24 cents vs. last year's loss of 2 cents. See Exhibit 1 for our financial projections.

Last week Sinovac Management raised their 2007 full year revenue guidance from an increase of 30% to 50% (issued in April) to an increase of 80% to 100%. We recognize that our full year estimate for an increase of 118% is above Management's current guidance. However, we are confident in our estimate and believe it may again prove low based on the following  three reasons:

    *

      First, historically there is a strong seasonal pattern to Sinovac's revenues with the second half of the year generating about two-thirds of the year's total revenues. This is because November and December are especially strong months for vaccine purchases and the first quarter is typically slow due to business disruption caused by the Chinese New Year Holidays. We expect this pattern to hold again this year but think it may not be quite as strong as in previous years due to the initiation of Chinese government purchases of Healive which began in the first half of the year. Thus, we have conservatively estimated that revenues for the second half of the year will account for about 60% of this year's total revenues.



    *

      Second, management has an excellent track record of consistently exceeding their revenue guidance. In fact, during last week's conference call when questioned that the new full year guidance seemed low, Management admitted that their projection for an increase of 80% to 100% in full year revenues was in fact "conservative". We suspect that this may have something to do with the Asian culture where credibility is greatly valued.



    *

      Third, Anflu™, Sinovac's newest product (a seasonal influenza vaccine) should be a much larger contributor to second half revenues than they were in the first half of the year.

In conclusion,  we suspect that our second half earnings projections will require additional boosting after the third quarter numbers release.

In regards to our second half earnings per share projection of 15 cents, we have decided to increase our estimate of cost of goods sold to 16.3% of sales from first half's level of 14.3% of sales to reflect growing sales of Anflu. Anflu production and sales volumes are much lower than Healive. As such, we expect that at this early stage Anflu would not be as profitable a product as Healive.

[shaker340]

I took a position in this stock yesterday, I hope it holds with this market.

[thai626]

Looks like SVA has found its Gspot.    

I wonder where the ceiling will be on this price jump.  News should be coming I'm guessing.   

[Terliso]

SVA is moving north again.

[Stocky2000]

Dutton Associates Announces Investment Opinion: Sinovac Biotech Strong Speculative Buy Rating In Initiating Coverage By Dutton Associates
Monday September 17, 12:00 pm ET

EL DORADO HILLS, Calif.--(BUSINESS WIRE)--Dutton Associates initiates coverage of Sinovac Biotech (AMEX:SVA - News) with a Strong Speculative Buy rating and a price target of $5.80. The 28-page report by Dutton senior analyst Stanley Ng is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals.

ADVERTISEMENT
Sinovac is a China-based biotech company that focuses on the research, development, manufacturing, and distribution of vaccines that protect against human infectious disease. Its currently approved products include Healive, (hepatitis A), Bilive, (inactivated vaccine against hepatitis A & B), and Anflu (vaccine against influenza virus). All are in the private market. Sinovac is currently developing vaccines against the H5N1 strain of pandemic virus, the Japanese Encephalitis virus and the SARS virus. Sinovac offers investors a good opportunity to invest in the huge and growing vaccine market, the prospects of which are driven by a large population of 1.3 billion with low vaccination coverage, increasing health consciousness, and the Chinese central government's commitment to sharply increase spending on the national immunization program. To cope with the rapid increase in demand for hepatitis A and influenza vaccines, the Company has aggressively increased its production capacity of Healive from 6 million doses to 10 million doses per annum and that of Anflu from 2 million doses to 4 million doses per annum, which can be transferred into 20 million doses of pandemic influenza vaccines per annum. Collaborations with multinational pharmaceutical companies will substantially increase its distribution opportunities within China and in the overseas markets. We expect Sinovac's revenue to increase 105% to $31.4 million and rise 38% to $43.3 million in 2008, with net income of $7.4 million and $12.1 million in 2007 and 2008, versus a net loss of $0.7 million in 2006.

About Dutton Associates

Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs, and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. The Firm does not accept any equity compensation. We received $35,000 from the Company for 4 quarterly Research Reports with coverage commencing on 9/17/2007. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.

[thai626]

It's time to rock and roll guys!!  VVVRRRROOOOOMMMM VROOOOM!!

Looks like this will hit 4.50 very soon.

[Terliso]

SVA ralllied more than 7%

[Terliso]

Up again 7%, volume still strong above average...

[Terliso]

This chinese stock ended 31% this week ..... It won't surprising if it hits the all-time resistance a month from now... 

[phabrux]

David,

your old friend SVA  is on fire today!

5,16$ just now, so about 12% from 4.58$ yesterday.

Have a nice day!

[Terliso]

SVA took 11% gain with big volume..

[bjc]

What a fantastic run so far.  Applaud.

Way to spot a fantastic looking chart and take action.  Hope this keeps rocking and rolling for you...

[Terliso]

What an awesome chart on SVA...   I bet SVA will close in 7ish area in the near term..