China-Biotics, Inc.

China-Biotics, Inc. (CHBT - Snapshot Report) recently rebounded from a long-term trend line on strong Q2 results after dropping from the 52-week high in late October.

Company Description

China-Biotics, Inc. develops and produces probiotics products, containing live microbial food supplements in China. The company was founded in 1999 and has a market cap of $336 million.

Shares of CHBT have been trending higher for most of the year on the strong Chinese economy and a global economic recovery. The company's better than expected Q2 results, reported on Nov 17, also helped fuel optimism.

Second-Quarter Results

Sales increased 49% from last year to $17.1 million. Earnings also came in strong at 31 cents per share, 14 cents ahead of the Zacks Consensus Estimate. China Biotics beat by 82% last quarter too.

CHBT noted that its results were driven by strong sales across all products, particularly for Shining Probiotics Protein Powder and bulk additives, which also saw higher prices. Gross profit increased 50% to $12.2 million on gross margin expansion to 71% from 69.9%.

China Biotics built its cash and equivalents to $79.4 million with working capital coming in at $64.7 million.

Estimates Up

Estimates for China Biotics are up over the last 2 months on the good quarter, with the current year adding 13 cents and climbing to $1.27 per share. The next-year estimate is pegged at $1.71, a 34% growth projection.

Valuation

In spite of the big gains of the last 9 months, CHBT still has value, trading with a forward P/E of 12X, a discount to the overall market.

The Chart

Shares of CHBT recently rebounded from a long-term trend line after pulling back from the 52-week high in late October. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

Read the full analyst report on CHBT