Taihua is astonishingly cheap right now.
As at interims dated 30th June 2008 the company had £8.1m in cash on the balance sheet. net Profit for the 6 month period was 10m Yuan... equivalent to £1m. Operating cashflow for the period was almost 18m Yuan... i.e. £1.8m. Net Assets stood at 123m Yuan - £12m.
These are monstrous numbers when set against a market cap of £6.7m. The company is positively spitting off cash and selling for half book value.
You can buy TAIH for 8p and receive 10p in cash plus the entire enterprise spitting off more than 1.5p in cash each 6 months for free...
What is the enterprise you ask?
TAIH deal in the drug paclitaxel an inhibitor used in cancer chemotherapies - a recent report suggesting that paclitaxel is used in 22% of all chemotherapy treatments worldwide. Essentially it is a Yew Tree Extract .... read here http://en.wikipedia.org/wiki/Paclitaxel ... the market is vast in Europe where they are currently applying for a certificate of suitability for sales. It's been in the hands of the European Directorate for the Quality of Medicines (EDQM) since earlier this year. As the purity of Taihua's paclitaxel is exceptional, they are likely to receive this and therefore open up a big market for further sales. TAIH have their own subsidiary (TNP) supplying them Yew trees...
TNP estimates that in 2008 it would be able to produce 10kg of paclitaxel per annum from this land which would produce over 300,000 paclitaxel injections.
Unfortunately in H1 the meddling Chinese Govt after a series of drug scandals put a temporary hold on any sales by companies selling traditional chinese medicines... so sales declined by 11% year on year. This ban has been lifted now, and we can expect therefore easy comparables for next year.
So you are getting all the potential growth thrown in for the bargain here... quite extraordinarily cheap for such a cash generative business.
