China Yongxin Pharmaceuticals, Inc. is probably the most undervalued company we’ve ever written about. It isn’t everyday that you find a growing, profitable company with nearly 100 stores trading for such a discounted stock price.
The company is more than just a drug retailer as they also produce and distribute pharmaceutical products. The company’s products include Chinese traditional medicines, chemical pharmaceutical preparations, natural health products, healthy food, cosmetics, and medical equipment.
Just last month the company released its financial results for Q3 2008 which revealed that net income doubled year-over-year to $1.7 million, or $0.05 per diluted share. However, even with consistent growth and excellent expenditure management, the stock is trading at a P/E ratio of less than one! If the stock was trading at its peers’ P/E ratio, it would be over $2 a share.
According to a CEO letter released earlier this year, the company is preparing to take its winning formula to a wider area across China to accelerate its growth rate. The CEO also stated that every decision made by the company’s management will be made to enhance shareholder investment. So far the company has shown exceptional proficiency relative to their current stock price and we look forward to seeing where they will be in the future.
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