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COMPANY CLOSE-UP
Winner Medical Group
www.winnermedical.com
Shenzhen
Employees: 5000
Exports: Japan, U.S., Europe
Nasdaq GM: WWIN
Closing Price, June 9, 2010: $5.80
Year End 2009 (ended Sept. 2009):
* Sales: $98.4 million, 15.1% y-o-y increase.
* Net income: $9.1 million, $80.2% increase.
Jianquan Li, president and CEO of Winner Medical Group, was in New York several weeks ago to ring the Nasdaq Opening Bell and I had the honor of meeting with him, along with Board Secretary & IR Manager, Peng Zhai, and Scott Powell of HC International. It was a truly rainy day, not soon to be forgotten. The company develops and manufacturers a series of gauze products for medical use such as surgical and wound dressings, eyepads, face masks, sponges, and recently launched a line of products made from pure cotton (and trademarked “PurCotton”) for consumers. It was fortuitous he had samples of tissue with him as we were all soaking wet. I am not one to exaggerate, but the tissues were incredibly soft to the touch, almost luxurious and I wish I could find them in my local grocery.
The company launched in 1991, listed on the OTC in 2005, launched the “PurCotton” brand in 2007, moved to Amex in 2009 and to Nasdaq in March of this year.
Three things you won’t garner from the company’s investor relations page on its web site, 1) Li founded the company using generous terms from vendors with whom he had prior business relationships, 2) Li speaks exceptional English and seems to understand the U.S. market in a way many China CEOs who have taken their companies public do not, 3) the cotton is grown in Texas.
When asked why Texas, Li said they company wants to use only the purest fiber and that the bags used to pack cotton in China are made of synthetic fiber which gets mixed into the cotton (Opportunity knocks for another entrepreneur in China to start manufacturing high-end bags for packing cotton!).
Li’s latest initiative is to launch a line of chain stores to sell PurCotton consumer products, such as baby products, feminine personal products and daily home care products. His target, of course, is the growing middle-class which is looking for high-end goods. Currently the company has 16 stores.
Analysts Coverage: John Ma, of Roth Capital.
Ma issued a report on WWIN in May, recommending a “buy”, citing that WWIN’s domestic market will continue to grow as recent medical reforms require provinces to centralize their procurement for medical disposable products for hospitals. This bodes well for companies which can meet high quantity orders. In addition, Ma believes there will be increasing sales in the U.S. (although he did not state why).
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IN CASE YOU MISSED…..
* In case you missed… the debate between Stephen Roach, Chairman of Morgan Stanley Asia and Martin Wolf, commentator for the Financial Times on whether “a revaluation of renminbi revaluation make the world economy healthier” hosted by the National Committee on U.S. China Relations, visit the NCUSCR web site to watch the video, www.ncuscr.org.
* In case you missed… Ronnie C. Chan, Chairman, Hang Lung Group Limited and
Hang Lung Properties Limited, speak at the Sir Gordon Wu Distinguished Speaker Forum hosted by The Jerome A. Chazen Columbia University’s of International Business at Columbia Business School, watch the video at: www.youtube.com/watch?v=kRF3fM4sg3c. On the much talked about China real estate “bubble” or “not,” Chan said that the Chinese government sees home ownership pivotal to stability and does not believe it would let the residential market fail in a similar fashion to the U.S. market. He emphasized his point by saying, with a modicum of humor, that no Chinese woman is going to marry a man who did not own his own apartment. In response to a question from the audience he indicated beach front property is a good buy– conjuring an image most Westerners probably have never visualized. Indeed, resort property development in China is something to investigate for the curious soul.
* In case you missed…Nick Zhang, of China Prospects, represented the China perspective on a panel at the NACD Directorship held this week at the Union League Club in New York City. Zhang pointed out that a Western director sitting on a Chinese company can be a valuable asset if he or she understands not only the macro economic issues in China but more importantly he needs to know the local, and respective industrial issues in order to be helpful. Also it helps a long way if he or she takes the time to know the CEO’s or the other Chinese board members on a personally level. “As the saying goes, everything in China is about relationship,” he said, “by building a good personal relationship you will get to know more about the company, the industry it is in and many of the issues the company faces as it competes in the market place.”
* In case you missed…the Jefferies Global Life Sciences conference in NYC, China Biologic Products (CBPO), 3SBio (SSRX) and China Corp. Blood Corp. presented.
MARKET MOVES
Jiangbo Begins to Trade on Nasdaq
Laiyang-based Jiangbo Pharmaceuticals Inc. (OTC BB: JGBO) began trading on the Nasdaq Global Market on Tuesday, June 8, 2010 under the symbol “JGBO”. It produces both western and Chinese herbal-based medical drugs in tablet, capsule, granule, syrup and electuary (sticky syrup) form. The company is in Jiangbo Eastern China in an Economic Development Zone in Laiyang City, Shandong Province.
ATA Revenues Up, Gross Profit Down
New York-based ATA (Nasdaq: ATAI) announces preliminary results for its fourth quarter and fiscal year ended March 31. Net revenues increased 12.6 percent y-o-y to U.S. $35.9 million. Gross profit decreased 7.6 percent to U.S. 16.9 million.
Suntech Net Revenues Up
Suntech Power Holdings Co. Ltd. (NYSE: STP) announced financial results for its first fiscal quarter ended March 31, 2010. Highlights include total net revenues of $588 million in the first quarter of 2010, representing 86.3 percent year-over-year increase.
Hollysys Automation Technologies Awarded $4.58 Million Contract
Beijing-based Hollysys Automation Technologies, Ltd. (Nasdaq: HOLI) announced that it has been awarded a follow-on high-speed railway signaling contract by the Chengdu Railway Bureau in supplying its ground-based high speed rail signaling system Train Control Centers for the Phase II of the Dazhou-Chengdu high-speed railway line. The contract value totaled to U.S. $4.58 million, or RMB 31.3 million.
Gulf Signs Acquisition Agreement
Shandong-based Gulf Resources (Nasdaq: GFRE) has signed an agreement to acquire manufacturing assets involved in bromine and crude salt production from individuals Jinjin Li and Qiuzhen Wang. The asset purchase includes $13.2 million in cash and the issuance of shares of 70,650 shares of common stock at a price of $9.859 per share, bringing the total consideration to $13.9 million.
ChinaCast Signs 10-Year Advertising & Distribution Contract
Beijing-based ChinaCast Education (Nasdaq: CAST) has formalized a 10-year exclusive agreement with Hunan Copote Corp. to commission a nationwide advertising and retail product distribution network through 38,000 retail post office outlets located throughout China.
EARNINGS CALLS
China-Biotics Earnings Call, Friday June 11
Shanghai-based China-Biotics (Nasdaq: CHBT) will host a conference call at 8:00 a.m. ET, on Friday, June 11, 2010, to discuss the fourth quarter and fiscal year 2010 annual financial results for the period-ended March 31, 2010. To participate, dial: U.S. 866-730-5763; International, (857) 350-1587. Passcode: 12247076.
Suntech Launches Solar Sailor
Suntech Power Holdings Co., Ltd. (NYSE: STP) launched the Suntech-Guosheng solar sailor on the Huangpu River in Shanghai. The 31.5 meter solar-powered passenger vessel features proprietary ‘solarsail’ technology developed by Australia-based Solar Sailor, a leading innovator in maritime solar technology. The eco-friendly vessel will cruise the Huangpu River for the Shanghai World Expo, inspiring visitors to embrace the event’s theme of “Better City, Better Life.”
SHAREHOLDERS’ MEETINGS
Hollysys Schedules Shareholder Meeting, June 25
Beijing-based Hollysys Automation Ltd. (Nasdaq: HOLI) will hold its annual shareholders meeting on June 25, 2010, at 9:00 a.m. Beijing Time. The meeting will take place at the Company’s executive offices, at 10 Jiancaicheng Middle Road, Xisanqi, Haidian District, Beijing, China 100096. Shareholders of record on April 30, 2010 will be eligible to vote at this meeting.
SkyPeople Fruit Schedules Shareholder Meeting, June 28
Xi’an-based SkyPeople Fruit Juice Inc. (Nasdaq: SPU) will hold its annual shareholders meeting June 28, 10:00 a.m. EST at the Grand Hyatt Hotel in New York. Investors have option of joining by teleconference. U.S. 1-877-941-2068; International: 1-480-629-9712.
PEOPLE
Penick & Associates Combines Resources With JSBarkats PLLC
Megan J. Penick, of Tarrytown-based Penick & Associates, recently merged her corporate and securities law practice with JSBarkats PLLC, where she will serve as head of the firm’s Asian Practice Group. Fluent in Mandarin, Penick specializes in corporate and securities law, with a focus on servicing China and U.S.-based corporations. JSBarkats PLLC is headquartered in Manhattan’s Financial District. She is an Independent Director for China Wind Systems (Nasdaq: CWS).
IN BRIEF
* Shishi-based China Marine Food Group Ltd. (NYSE: CMFO) announced they have secured product placements for a selection of its flagship seafood snack foods at more than 500 convenience chain stores in the Guangdong province.
* Beijing-based ChinaNet Online Holdings Inc. (NYSE: CNET) has signed an exclusive agreement with Shanghai Rural Commercial Bank (SRCB) to deploy its online banking and display advertising kiosks in all 300 existing and future SRCB branches.
