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Looks to be getting overbought with an RSI of 81.7, also seems to be at it's 52-week high. Just be careful of the Overbought part...I'll watch it.
December 10, 2005, there were 48,857,276 shares of the small business issuer's common stock outstanding.
Last PR was nice: WallStreet Research Continues Coverage of Sunwin International Neutraceuticals Inc. Shares With Speculative Strong Buy Recommendation at www.WallStreetResearch.org Wednesday January 4, 10:55 am ET
NEW YORK, NY--(MARKET WIRE)--Jan 4, 2006 -- WallStreet Research, a prominent equity research boutique led by Alan Stone, Managing Director of Alan Stone & Company, LLC, announced today that it has released an update report continuing coverage with a speculative strong buy recommendation of Sunwin International Neutraceuticals, Inc. (OTC BB:SUWN.OB - News), a diversified global nutraceutical company. The complete analyst research report, together with the risks associated therewith and additional information about WallStreet Research, is available at www.WallStreetResearch.org. ADVERTISEMENT
Mr. Stone was formerly a securities analyst and assistant portfolio manager at Merrill Lynch Asset Management and an investment analyst at Prudential Insurance Company's Capital Markets Group. WallStreet Research specializes in the microcap and smallcap investment arena, looking for emerging growth companies with strong management, unique or proprietary technology products, significant market potential, financial strength, and outstanding long-term earnings growth possibilities. The firm has offices in Los Angeles, CA; Palm Beach, FL; and New York City, NY, and is well known for discovering undervalued companies and bringing them to the attention of the investment community.
Sunwin International Neutraceuticals, Inc. (www.sunwin.biz), headquartered in Qufu, in the Shandong Province of the People's Republic of China, is a diversified nutraceutical company engaged in the development, manufacturing and international sale of a variety of health products for humans and animals. The Company's agricultural processing expertise and convenient access to raw materials in select Chinese farmlands result in high-quality and cost-effective natural products that straddle the healthcare industry and the food & beverage marketplace. Products offered by the Company include a powerful low-calorie natural sweetener called stevioside, numerous herbal extracts rooted in traditional Chinese medicine (TCM), as well as a variety of veterinary medicines and feed supplements. Their innovative nature has in recent years earned state-level recognition and several industry awards for the Company. For the fiscal year ended April 30, 2005, the Company's revenues rose 11.3% to $12.1 million, and the net income increased 78% to $829,114, or $.02 per share. In the first six months of fiscal 2006 ended October 31, 2005, total revenues climbed 11.8% to $7,223,971, from $6,458,285 in comparable period in the previous year. Last September, the Company completed an upgrade and expansion of most of its manufacturing facilities, which not only increased stevioside production capacity to 300 tons per year, or a double-digit percentage share of the global demand, but also fulfilled GMP requirements mandated since the beginning of 2006 by the central government on producers of Chinese herb and veterinary medicines. Trading on the OTC Bulletin Board under the symbol SUWN, the Company is well positioned to immediately capitalize on the temporary competitive advantage resulting from the GMP certification and benefit from the overall growing health concerns among consumers globally, increasing popularity of organic foods and medicines, and the strong condition of the Chinese economy.
Safe Harbor Statement
Certain of the statements set forth in this press release constitute "forward-looking statements." Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning," "expect," "believe," "will likely," "should," "could," "would," "may" or words or expressions of similar meaning. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the company's actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company's ability to grow its business. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company's limited financial resources, domestic or global economic conditions -- especially those relating to China, activities of competitors and the presence of new or additional competition, and changes in Federal or State laws, restrictions and regulations on doing business in a foreign country, in particular China, and conditions of equity markets. More information about the potential factors that could affect the Company's business and financial results is included in the Company's filings, available via the United States Securities and Exchange Commission.
A Disclaimer Note
The information presented in the WallStreet Research report is not to be construed as an offer to sell, nor a solicitation of an offer to purchase, any securities referred to herein or otherwise. Readers are encouraged to conduct their own due diligence and review all of the company's financial statements and risks statements on file with the SEC. Sunwin International Neutraceuticals Inc. has paid a fee of $5,000 to Alan Stone & Company, LLC in conjunction with the preparation and distribution of this update report, as well as a fee of $10,000 for a prior version of the report in the past, and has committed for $5,000 for future update reports. Alan Stone & Company, LLC, or its representatives, may own shares, for investment purposes, in its corporate accounts, and may increase or decrease its positions at any time, without notice.
Contact: Contact: Sunwin Intermational Neutraceuticals Inc Christina Hanneman 303-220-8476 chrishanneman*mho.com
Alan Stone & Company LLC Alan Stone 212-521-4102 astone*alanstone.com
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Man...Today was a great day. Just looking at the possible EPS of .08 in 2006 if business remains flat or P/E ratio of 6 for a fast growing company with nothing but good, great, and outstanding news.......is nuts.
Last Quarterly report. Goooooood info. Check it out
Form 10QSB for SUNWIN INTERNATIONAL NEUTRACEUTICALS, INC.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The following analysis of our consolidated financial condition and results of operations for the six months ended October 31, 2005 and 2004, should be read in conjunction with the consolidated financial statements, including footnotes, and other information presented in our annual report of Form 10-KSB as filed with the Securities and Exchange Commission.
Overview
Effective February 1, 2004, Sunwin Tech Group, Inc. entered into a stock purchase agreement with Shandong Shengwang Pharmaceutical Corporation, Limited, a 90% shareholder of Qufu. Under this agreement, Sunwin Tech acquired 80% of the capital stock of Qufu in exchange for 100% of its capital stock which had a fair market value of $95,000. In April 2004, we acquired 100% of Sunwin Tech in exchange for approximately 17,000,004 shares of our common stock which resulted in a change of control of our company. The transaction has been accounted for as a reverse acquisition under the purchase method for business combinations. The combination of the two companies is recorded as a recapitalization of Qufu and we are treated as the continuing entity.
Though our subsidiaries, we manufacture and sell neutraceutical products which can be classified into three main product groups; (1) stevioside - a 100% natural sweetener, (2) veterinary medicines and animal feed additives, and (3) traditional Chinese medicine formula extracts. All of our business and operations are located in the People's Republic of China.
We manufacture and sell stevioside, a 100% natural sweetener which is extracted from the leaves of the Stevia rebaudiana plant, a green herb plant of the Aster/Chrysanthemum family. We also purchase and resell finished stevioside product from third party manufacturers. Principal customers for this product are located in China and Japan where it is approved for use both as a food additive as well as a nutritional supplement. This product group represented approximately 46% of our total revenues for fiscal 2005 and 40% for the six months ended October 31, 2005. China has grown into the world's largest exporter of stevioside, with volume exceeding 80% of the world's supply. We believe that we are one of the top three companies in China manufacturing stevioside.
We also manufacture and sell a comprehensive group of veterinary medicines including seven series of more than 200 products. These veterinary medicines include both traditional Chinese medicine and Western medicine, feed additives, feeds and disinfectors. We are a leading advocator of preparing animal medicine from Chinese herbs, especially antivirus and feed additives. We are concentrating our efforts in this product category on developing and producing medicines which are relevant to the needs of the animal stock industry in the PRC, and developing special veterinary medicines made from pure traditional Chinese medicines or combining traditional Chinese medicine with Western medicine. This product group represented approximately 28% of our total revenues for fiscal 2005 and 30% for the six months ended October 31, 2005. Our last product group includes the manufacture and sale of traditional Chinese medicines formula extracts that are used in products made for use by both humans and animals. This product group represented approximately 26% of our total revenues for fiscal 2005 and 30% for the six months ended October 31, 2005.
-15- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
Our ability to significantly increase our revenues in any of these groups faces a number of challenges. In addition to the existing laws which limit the sale of stevioside to Western countries, the other two product groups operate in highly competitive environments. We estimate that there are more than 2,700 companies in China selling animal medicines and more than 200 companies in China that produce Chinese traditional medicines and extracts and refined chemical products. Our sale of products in these two product groups are concentrated on domestic customers therefore our ability to expand our revenues in these product groups is limited to a certain extent by economic conditions in the PRC. In addition, because we are dependent upon raw materials which are farmed, our ability to produce our products and compete in our markets is also subject to risks including weather and similar events which may reduce the amount of raw materials we are able to purchase from farmers as well as increased competition or market pressure which may result in reduced prices for our products. Our ability, however, to expand our revenues from the sale of stevioside is limited as the product is not approved for use as a food additive in most Western countries, including the United States, Canada and the European Union. In an effort to increase our competitive position within our market segment, we have built an additional stevioside manufacturing line in order to expand our stevioside production, upgraded our exiting manufacturing stevioside line, and relocated to a larger facility which became operational on a limited basis in September 2005. Our new stevioside facility became fully operational in November 2005 after experiencing delays associated with retooling, the installation of additional equipment, and final inspection delays. In addition, during fiscal year 2005 and the first two quarters of fiscal year 2006 we have been involved in reconstructing an additional veterinary production line into a new building and we anticipate to be in full production in December 2005.
Through October 31, 2005, we have advanced and invested an aggregate of approximately $655,000 to be used for leasehold improvements and equipment towards the additional veterinary medicine manufacturing line and $1,340,000 towards the stevioside facility. We previously anticipated that the stevioside upgrade and facility would not require any additional funds to complete and the veterinary medicine upgrade and facility would require USD $34,000 in additional capital from us. However, through October 31, 2005, we advanced and invested additional funds of approximately $206,000 for our stevioside facility for additional equipment and upgrades.
Even though we are a U.S. company, because all of our operations are located in the PRC, we face certain risks associated with doing business in that country. These risks include risks associated with the ongoing transition from state business ownership to privatization, operating in a cash-based economy, dealing with inconsistent government policies, unexpected changes in regulatory requirements, export restrictions, tariffs and other trade barriers, challenges in staffing and managing operations in a communist country, differences in technology standards, employment laws and business practices, longer payment cycles and problems in collecting accounts receivable, changes in currency exchange rates and currency exchange controls. We are unable to control the vast majority of these risks associated both with our operations and the country in which they are located and these risks could result in significant declines in our revenues and adversely effect our ability to continue as a going concern.
-16- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
Foreign Exchange Considerations
Because revenues from our operations in the PRC accounted for 100% of our consolidated net revenues for fiscal 2005 and fiscal 2004, how we report net revenues from our PRC-based operations is of particular importance to understanding our financial statements. Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Transactions and balances in other currencies are converted into U.S. dollars in accordance with Statement of Financial Accounting Standards (SFAS) No. 52, "Foreign Currency Translation," and are included in determining net income or loss. For foreign operations with the local currency as the functional currency, assets and liabilities are translated from the local currencies into U.S. dollars at the exchange rate prevailing at the respective balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the financial statements. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss.
The functional currency of our Chinese subsidiaries is the Chinese RMB, the local currency. The financial statements of the subsidiaries are translated to U.S. dollars using year-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations and were not material during the periods presented. The cumulative translation adjustment and effect of exchange rate changes on cash at October 31, 2005 was approximately $53,400. Until 1994, the RMB experienced a gradual but significant devaluation against most major currencies, including U.S. dollars, and there was a significant devaluation of the RMB on January 1, 1994 in connection with the replacement of the dual exchange rate system with a unified managed floating rate foreign exchange system. Since 1994, the value of the RMB relative to the U.S. Dollar has remained stable and has appreciated slightly against the U.S. dollar. Countries, including the United States, have argued that the RMB is artificially undervalued due to China's current monetary policies and have pressured China to allow the RMB to float freely in world markets. On July 21, 2005, the PRC reported that it would have its currency pegged to a basket of currencies rather than just tied to a fixed exchange rate to the dollar. It also increased the value of its currency 2% higher against the dollar, effective immediately.
If any devaluation of the RMB were to occur in the future, returns on our operations in China, which are expected to be in the form of RMB, will be negatively affected upon conversion to U.S. dollars. Although we attempt to have most future payments, mainly repayments of loans and capital contributions, denominated in U.S. dollars, if any increase in the value of the RMB were to occur in the future, our product sales in China and in other countries may be negatively affected.
-17- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
A summary of significant accounting policies is included in Note 1 to the audited consolidated financial statements on Form 10-KSB as filed with the Securities and Exchange Commission. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about the company's operating results and financial condition.
We record property and equipment at cost. Depreciation is provided using the straight-line method over the estimated economic lives of the assets, which are from five to twenty years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. We review the carrying value of long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.
We account for stock options issued to employees in accordance with the provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. As such, compensation cost is measured on the date of grant as the excess of the current market price of the underlying stock over the exercise price. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We adopted the disclosure provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" and SFAS 148, "Accounting for Stock-Based Compensation -Transition and Disclosure", which permits entities to provide pro forma net income (loss) and pro forma earnings (loss) per share disclosures for employee stock option grants as if the fair-valued based method defined in SFAS No. 123 had been applied. We account for stock options and stock issued to non-employees for goods or services in accordance with the fair value method of SFAS 123.
-18- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
RESULTS OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 2005 AS COMPARED TO SIX MONTHS ENDED OCTOBER 31, 2004
Revenues
For the six months ended October 31, 2005, our revenues were $7,223,971 as compared to $6,458,285 for the six months ended October 31, 2004, an increase of $765,686 or approximately 12%. We attribute this increase in net revenues to an increase in revenues from the manufacture and sale of our traditional Chinese and animal medicine products of approximately $1,053,389 offset by a decrease in the sale of our natural sweetener, stevioside, of $287,703 as discussed below:
o The decrease in the sale of our natural sweetener, stevioside, was caused by the upgrade of our manufacturing equipment and relocation of our stevioside manufacturing facility, which has disrupted our revenue flows. We started to use this new manufacturing line in September 2005. However, due to delays associated with retooling, the installation of additional equipment and inspection delays, we became fully operational in November 2005. Our revenues decreased from $3,151,718 for the six months ended October 31, 2004 to $2,864,014 for the six months ended October 31, 2005, a 9% decrease. Until such time as the facility is fully operational, in the event we receive orders for Stevioside in excess of our manufacturing capacity, we purchase from other manufacturers and resell these goods to our customers to fill orders. We anticipate manufacturing 200 tons of stevioside and to resell 80 tons during fiscal year 2006. We believe that the market for stevioside remains strong as we see exports to Japan increasing.
o We experienced an increase in the revenues related to our traditional Chinese medicine products. Our revenues increased from $1,695,074 for the six months ended October 31, 2004 to $2,182,766 for the six months ended October 31, 2005, a 28.8% increase. Our gross profit rate has grown from 37.5% to 42% on this product due to the introduction of new products, and improved sales skills. Additionally, the Chinese central government issued a new rule for the Chinese Medicine industry stipulating that all manufactures should satisfy GMP standards in their production process by October 1, 2005. We believe that we are the first facility in this industry to complete this requirement in China which will help us maintain the reputation in this field and acquire bigger market share. Next year, we will be adding new products into the market and plan to start a new products series, natural dietary health food.
-19- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
o Revenues from our veterinary medicine grew 35% this period to $2,177,191 for the six months ended October 31, 2005 as compared to $1,611,493 for the six months ended October 31, 2004. However, in past six months, our gross profit margins were at 31.5%, a decrease of .5% from the previous comparable period due to increased raw material costs. We believe that we will achieve major growth in Veterinary medicine. The veterinary industry is regulated by the Chinese Central Government which recently issued a new regulation stipulating that all veterinary manufacturers should conform to the GMP production process standard by October 1, 2005. Among over 2,700 manufacturers in China, we estimate that only approximately 800 could accomplish this requirement on time. A significant market vacancy will be left by the companies that do not conform and pass the standard. We expect to complete construction and finish the inspection process on time. We expect to have eight production lines. We expect to obtain a greater market share in the fiscal year of 2006.
Cost of Sales and Gross Profit
For the six months ended October 31, 2005, cost of sales amounted to $4,939,543 or 68.4% of net revenues as compared to cost of sales of $4,507,595 or 69.8% of net revenues for the six months ended October 31, 2004, a percentage decrease of 1.4%. Gross profit for the six months ended October 31, 2005 was $2,284,428 or 31.6% of revenues, as compared to $1,950,690, or 30.2% of revenues for the six months ended October 31, 2004.
Operating Expenses
Our operating expenses increased for the six months ended October 31, 2005 from the six months ended October 31, 2004 as a result of increased selling expenses, which was attributable to increased commissions and local tax costs associated with our increased revenues, offset by decreased general and administrative costs which is primarily attributable to decreases in repairs and maintenance and retooling expenses associated with an upgrade of our manufacturing facilities and a decrease of approximately $54,000 in business development expenses offset by increases in professional fees associated with our SEC filings and other operating expenses. Expenditures for repairs and maintenance and facility upgrades during fiscal 2004 and in fiscal 2005 should decrease in future periods as we anticipate that this project will be completed in December 2005. We anticipate further increases in legal and accounting fees during fiscal 2006 which are associated with our continued compliance with provisions of the Sarbanes-Oxley Act of 2002, including new provisions which will phase in during fiscal 2007 and beyond and fees and costs related to capital raising transactions. These increases could serve to further reduce our net income absent a significant increase in our revenues at the current gross profit margins.
For the six months ended October 31, 2005, total operating expenses were $1,456,660 as compared to $1,388,310 for the six months ended October 31, 2004, an increase of $68,350 or 5%.
-20- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
Included in this decrease were:
* For the six months ended October 31, 2005, we recorded consulting and stock-based consulting expense of $135,374 as compared to $175,000 for the six months ended October 31, 2004, a decrease of $39,626 or 22.6%. This amount represented the value of shares of our common stock we issued or are issuable as compensation for consulting services being rendered to us. While we anticipate that we will enter into similar agreements during fiscal 2006, we cannot predict the amount of expense which will be attributable to such agreements. In July 2005, we entered into a one-year agreement with China Direct Investments, Inc. to provide business development and management services, effective May 1, 2005. In connection with this agreement, we shall issue 665,000 shares of our common stock payable on a quarterly basis on August 31, 2005, November 30, 2005, February 28, 2006 and May 1, 2006 for a total of 2,660,000. The issuance of these shares will continue to increase stock-based consulting fees. We value these services using the fair value of common shares issuable at the end of each month of the service period;
* For the six months ended October 31, 2005, selling expenses amounted to $849,311 as compared to $697,612 for the six months ended October 31, 2004, an increase of $151,699 or 21.7%. For the six months ended October 31, 2005, we experienced an increase in commission expenses of approximately $92,800, increased travel and entertainment costs of approximately $60,900, and an increase in shipping and freight of approximately $24,000. These increases were offset by a decrease in advertising and promotion of $35,300.
* For the six months ended October 31, 2005, general and administrative expenses were $471,975 as compared to $515,698 for the six months ended October 31, 2004, a decrease of $43,723 or 8.5%. The decrease is primarily attributable to a decrease of approximately $81,000 in business development expenses incurred during the six months ended October 31, 2004, a decrease of $8,500 in repairs and maintenance and retooling expense associated with the upgrade of our manufacturing facilities in order to meet new government manufacturing standards in our industry, a slight decrease in salaries of $2,400, and a decrease in bad debt expense of approximately $34.000. These decreases were offset by an increase in travel and entertainment of approximately $56,300 and increases in general operating expenses such as telephone and office expenses associated with increased operations.
For the six months ended October 31, 2005, other income amounted to $151,880 as compared to other income of $25,432 for the six months ended October 31, 2004. Other income for the six months ended October 31, 2005 and 2004 was associated with income recognized from the collection of value-added taxes on certain of our products which we receive a tax credit.
For the six months ended October 31, 2005, interest expense was $14,503 as compared to $31,153 for the six months ended October 31, 2004, a decrease of $16,650 or 53.4%. Interest expense for the six months ended October 31, 2005 and 2004 was associated with our borrowings.
-21- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
For the six months ended October 31, 2005, we recorded a benefit from income taxes of $521,593 as compared to a provision for income taxes of $(299,902) for the six months ended October 31, 2004. In the current period, we received a waiver of income taxes from the local Chinese government, waiving income tax due through October 2005. We do not expect to pay income taxes for fiscal 2006 and expect to receive an additional waiver for taxes through December 2005.
Our income before minority interest increased by $1,229,981 or 479% to $1,486,738 for the six months ended October 31, 2005 as compared to $256,757 for the six months ended October 31, 2004 primarily as a result of an increase in other income of $126,448, an increase in benefit from income taxes of $821,495 and an increase in income from operations of $265,388 for the six months ended October 31, 2005 from the 2004 period.
For the six months ended October 31, 2005, we reported a minority interest in income of subsidiary (Qufu) of $332,832 as compared to $97,368 for the six months ended October 31, 2004. The minority interest in income of subsidiary is attributable to Qufu, which we allocate to the minority stockholders, had the effect of reducing our net income.
As a result of these factors, we reported net income of $1,153,906 or $.03 per share for the six months ended October 31, 2005 as compared to net income of $159,389 or $.00 per share for the six months ended October 31, 2004.
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 2005, we had working capital of $4,769,859 and cash and cash equivalents of $2,380,412. At October 31, 2005, our cash position by geographic area is as follows:
United States $ 370 China 2,380,042 -------------- Total $2,380,412 ==============
During fiscal 2005, we raised cash proceeds of $902,565 from the sale of our common stock. Additionally, during fiscal 2005, we reduced our balance that we advanced to customers by $1,018,862.
From time to time, we advance funds to Shandong Shengwang Pharmaceutical Corporation, Limited and certain of its affiliated entities to: effectuate the purchase of equipment and hiring of construction services for us at advantageous prices through the buying power provided by Shandong Shengwang Pharmaceutical Corporation, Limited in connection with the building of an additional manufacturing line; leaseholder improvements in connection with the building of an additional manufacturing line; raw materials; and to provide our subsidiary (Qufu) the status of joint venture. At October 31, 2005, Shandong Shengwang Pharmaceutical Corporation, Limited owed us $1,154,829 for property, plant and equipment advances reflected in long-term assets in connection with the foregoing.
As equipment is acquired and construction services performed, we will reclassify the advanced to property, plant and equipment.
-22- ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
As of October 31, 2005, we had approximately U.S. $315,000 in short term loans and notes payable maturing at or prior to February 2006. If we fail to obtain debt or equity financing to meet these obligations or fail to obtain extensions of the maturity dates of these debt obligations, our overall liquidity and capital resources will be adversely affected as a result of our efforts to satisfy these obligations.
Net cash provided by operating activities decreased from $2,182,479 for the six months ended October 31, 2004 to $1,952,852 for the six months ended October 31, 2005. This decrease is primarily attributable to:
* an increase of $994,517 in our net income,
* a decrease of $46,175 in depreciation and amortization as a result of the fact that certain property, plant and equipment was fully depreciated in the prior period.
* a decrease of $141,573 in stock based compensation which reflects the decrease in the payment of non-cash compensation to consultants during the 2005 period. We paid stock based compensation to consultants for business development services, management services, and investor relations services. We expect to issue additional common shares for consulting services in the future.
* an increase of $242,637 in minority interest which represents that portion of our net income which is attributable to the 20% of Qufu we do not own,
* an decrease of $64,949 in allowance for doubtful accounts which represents a decrease in our allowance for bad debt based on an analysis of our receivable balances,
* a decrease of $346,142 in accounts receivable as a result of based on the fact that we have been collecting our receivables in a more timely manner and the application of advanced from customer to our accounts receivable balances,
* a decrease of $530,224 in inventory as a result of slow down of inventory production as we update our facilities. We expect our inventory levels to rise as we increase our stevioside production,
* an decrease of $87,723 in prepaid and other current assets, as a result of the receipt of inventory from advances previously made to suppliers of stevioside in preparation of our new stevioside production line,
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Sunwin International Neutraceuticals to Host a Series of Investor Presentations NEW YORK, NY AND QUFU, CHINA, Jan 25, 2006 (MARKET WIRE via COMTEX) -- Sunwin International Neutraceuticals, Inc. (OTC BB: SUWN), a leader in the production and distribution of Chinese herbs, veterinary medicines and low calorie natural sweetener (Stevia) in China, announced it will host a series of investor conferences to communicate the Company's business strategy, acquisition developments, and growth potential to the investment community. The conferences are part of a campaign launched by the Company in the fourth quarter of 2005. Please visit investor sector at http://www.sunwin.biz for a full itinerary. Sunwin Investor Conference Itinerary
-- The World Money Show, February 1-4, 2006, in Orlando, Florida. SUWN will host a series of one-on-one meetings, luncheons, and dinner events during the week.
-- Investor luncheon - February 20, 2006 12:30pm - 3:00 pm (PST) at Chanticlair Restaurant, 18912 MacArthur Blvd, Newport Beach, California.
-- Roth Capital Micro-Cap Conference, February 20-22, 2006. SUWN will host a series of one-on-one meetings at the St. Regis Monarch Beach Resort & Spa, 33000 Niguel Road, Dana Point, CA.
-- Investor luncheon - February 22, 2006, 1pm - 3pm (PST), Mr. Chow's Restaurant, 344 N Camden Drive, Beverly Hills, California. All shareholders and prospective investors are welcome. Please RSVP at info*sunwin.biz. Mr. Alan Stone, Managing Director of ASC, stated, "We have arranged a comprehensive program for SUWN representatives to meet with a wide range of market professionals. Our goal is to present the Company's exciting accomplishments and growth opportunities to the broader investment community. Demand for Chinese related securities remains strong; we believe that the planned events and activities will improve the Company's visibility on Wall Street, broaden its shareholder base, increase the stock's trading liquidity and enhance long-run shareholder value."
About Sunwin International Neutraceuticals, Inc.
Sunwin International Neutraceuticals, Inc. (OTC BB: SUWN) is engaged in the areas of essential traditional Chinese medicine, 100% organic herbal medicine, neutraceutical products, natural sweetener (Stevia), and veterinary medicines and feeds prepared from 100% organic herbal ingredients. As an industry leader in agricultural processing, Sunwin has built an integrated global firm with the sourcing and production capabilities to meet the needs of consumers throughout the world. Sunwin also makes such value-added products as specialty veterinary food ingredients and specialty feed ingredients. The Sunwin family works closely with consumers to provide a quality and a hybrid mix of agricultural products and services that meet growing demand. In 2002, Sunwin was recognized as one of the first 2,000 state-level companies that China authorized as the most important innovative high-tech pioneer businesses by the Chinese central government. In 2002, Sunwin was awarded as one of 2002 state-level biological product manufacturers in China. In 2003, Sunwin ranked as one of the top 50 companies of China Animal Related Health Care Product Pharmaceutical Industry. In 2003, Sunwin received the award of Shandong Top-Ten Innovative, High-Tech Businesses by the Province Government of Shandong. For more info about Sunwin, please visit http://www.sunwin.biz/
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Next week should be good or should I say next month will be great. We know that they are on a road show all of next month plus we should hear news on ????????
-- The World Money Show, February 1-4, 2006, in Orlando, Florida. SUWN will host a series of one-on-one meetings, luncheons, and dinner events during the week.
-- Investor luncheon - February 20, 2006 12:30pm - 3:00 pm (PST) at Chanticlair Restaurant, 18912 MacArthur Blvd, Newport Beach, California.
-- Roth Capital Micro-Cap Conference, February 20-22, 2006. SUWN will host a series of one-on-one meetings at the St. Regis Monarch Beach Resort & Spa, 33000 Niguel Road, Dana Point, CA.
-- Investor luncheon - February 22, 2006, 1pm - 3pm (PST), Mr. Chow's Restaurant, 344 N Camden Drive, Beverly Hills, California. All shareholders and prospective investors are welcome. Please RSVP at info*sunwin.biz. Mr. Alan Stone, Managing Director of ASC, stated, "We have arranged a comprehensive program for SUWN representatives to meet with a wide range of market professionals. Our goal is to present the Company's exciting accomplishments and growth opportunities to the broader investment community. Demand for Chinese related securities remains strong; we believe that the planned events and activities will improve the Company's visibility on Wall Street, broaden its shareholder base, increase the stock's trading liquidity and enhance long-run shareholder value."
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Assuming the Company is able to at least maintain its overall 16% net margin from the first six months of fiscal 2006 throughout the second half of the year and total fiscal sales grow only by just over 15% to $14.0 million, the Company’s forward P/E ratio is currently just 5, clearly not reflecting a much higher organic growth potential, synergistic acquisitions of profitable companies or unpredictable events of deregulation of stevia use in foreign markets. Meanwhile, the Company’s management has already released statements about targeting several acquisition candidates that produce approximately 700 tons of stevioside per year in total, which could potentially increase the annual production of to approximately 1,000 tons per year, representing 50% to 60% of worldwide demand. The Company’s publicly announced goal is to achieve $40 to $60 million in annual sales and $8 to $10 million in net income by April 30, 2008 through both internal organic growth and external acquisitions.
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I bet this is the company that SUWN is looking to buy real soon.
Shandong Huaxian Stevia Co., Ltd..
1. Name: Shandong Huaxian Stevia Co., Ltd. 2. Legal Representative: Zheng Shuwang 3. Business Scope: study and development, deep processing, sales and service for stevia. 4. Main Exports: ＂Xijinmen＂stevia rebaudiana sugar (glucoside) series. 5.Profile: Shandong Huaxian Stevia Co., Ltd. was set up in August, 2000 with the approval of the Government of Shandong Province and a registered capital of RMB23 million. The major business is to process stevia leaves and to extract the substance with naturally sweet taste (stevia); to study and develop new types of stevia with high tech and then do the processing and transforming on them; to manage and sold stevia products; to study and direct the farmers to plant stevia. In China, the company is one of the backbone enterprises in the field of the biological product, i.e. the stevia and the largest importing and exporting base. The yearly output amounts to 1000 ton, accounting for 60% of the total output in our country, 70% of sales volume on home market and 50% on international market. In 2000, the company has passed ISO9002. The products are granted awards many times. 90% of the leading product, stevia, is exported, mainly to more than 10 countries and regions such as South korea, Japan, Hong Kong, Europe, and America etc. The company itself has got RMB15 million through yearly exportation, which has gained more than RMB 13 million profits. 6. Foreign Countries the company hopes to cooperate with: European countries and South Asian regions. The company hopes to cooperate with you in the following fields: the research and development of stevia rebaudiana sugar. Program the company hopes to cooperate with: the transformation of SOD into stevia rebaudiana sugar (glucoside) series. Add: the north end of Jianshe Road in Jining, Shandong Province. Tel: 86-537-2043592 Fax: 86-537-2043583 E-mail: sdhxjt*public.jiptt.sd.cn Website: www.steviachina.com
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