China Medical (CMED) Announces to the Upside

As I look for new ideas, I keep coming back to old positions in the fund; today I see China Medical (CMED) up strongly on a pre-announcement - a quite substantial one at that. Now in this case there was little clue of this in the chart, as the company had fallen below the 200 day moving average; not joining the party in "all things Chinese" of late.

• Medical-device maker China Medical Technologies Inc. said Friday its adjusted profit from continuing operations grew 43 percent in the fiscal fourth quarter.
  
• The Beijing-based company reported preliminary fourth quarter results, and will make a full report in late July. It said its adjusted profit increased to 116 million renminbi, or $17 million, which translates to 60 cents per American Depositary Share. Revenue from continuing operations grew 37 percent, to 248 million renminbi, or $36 million.
  
• The two analysts reporting to Thomson Reuters expected 43 cents per share and $35.3 million in revenue for the quarter, which ended March 31.
• For the full year, China Medical Technologies said its adjusted profit from continuing operations grew 79 percent, to 416 million renminbi, or $61 million. That is equal to $2.30 per American Depositary Share. Revenue from continuing operations rose 51 percent to 829 million renminbi, or $121 million.

Since revenue came mostly inline with analysts estimates, there must of been either an increase in margins somewhere on the P&L, or an expense reduction. We'll know in July.

[Aug 12, 2008: China Medical Announces Convertible Debt Offering]
[Aug 5, 2008: China Medical - Back on Track; Valuation Should be Higher]
[Feb 25, 2008: China Medical - What Stock Market Correction?]

No position