FCPG recovery candidate. Report from NBT equities below sheds proper light on a recent, very significant event that will likely ramp revenues substantially in coming qtrs.
| FCPG.OB | 11:22AM | 0.28 |  0.01 |
3.70% |
57,400 |
http://www.nbtequitiesresearch.com/report/first-china-pharma-receives-game-changing-license-from-chinese-govt
First China Pharma Receives Game-Changing License from Chinese Gov't
The new government-issued license that First China Pharmaceutical Group ($FCPG) has been approved for -- the Internet Drug Transaction Service License (IDTSL) -- enables the company to take orders and payments over the Internet. This is a huge feather in the company's cap, as the Chinese government is paranoid about Internet payment transactions, as it believes this could be a means of moving yuan out of the country.
The fact that First China Pharma has been approved for the IDTSL indicates how secure the company's ordering and payment system is. The IDTSL also enables the company to now distribute drugs throughout every province in China, in effect making $FCPG a national distributor.
With this license, the company will not have to spend the money and suffer the dilution of an aggressive acquisition strategy to expand. Instead, First China Pharma can establish sales offices in major centers around China and utilize drop shipping from drug manufacturers. This means that $FCPG should be able to grow more rapidly than through a reliance on acquisitions.
A few acquisitions may still take place, as it may be necessary to establish a handful of distribution centers in major cities throughout China. In order to take advantage of the new license, First China Pharma will need to acquire significantly more inventory and funds to purchase inventory. $FCPG has secured enough bank credit to directly finance the increase in inventory.
At the going rate of 1 times sales, FCPG is 50% undervalued ... but with its 25% growth rate, it's undervalued by almost 100%. This might just be the perfect time to start/build a speculative position.
