Another promising China stock

China-Biotics is the largest provider of probiotic bacteria in China.

By Wall Street Media on MSN Money Apr 23, 2010 3:38PM
Written by Douglas Estadt

China Biotics (CHBT) is the largest provider of probiotic bacteria in China. Probiotics are beneficial, live bacteria that can be used as dietary supplements and food additives to improve intestinal health and digestion.

 

Our friend, Dr. Eric Jackson, of Ironfire Capital LLC, likes the stock for these reasons:

  • By 2014, the probiotics market in China is expected to reach $9 billion
  • The company shows gross margins of 71% for the last two years
  • It's retail business can definitely grow from only 100 stores today. And CHBT’s biggest opportunities are in dairy and animal feed.
  • All revenue is based on an old facility with limited production capability. The company opened a new facility in February and is expected to raise production quickly.
  • China is a net importer because it cannot presently produce enough probiotics domestically.
To learn more about CHBT, view the video below


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