China Animal Healthcare

China Animal Healthcare: FY12 revenues up 12.3% to Rmb863m, net profits declined 52.5% to Rmb105.9m; solely due to the early-redemption of convertible bonds. Adjusted net profit attributable to owners for FY2012 would be Rmb215.2m, representing an increase of 3.8%. The increase in revenue was mainly boosted by the surge in sales of biological drugs of 25.8% y/y to Rmb323.7m , and the continued stable performance in the powdered drugs segment. Company seeks further growth in its core business, in particular the biological drugs business segment. Company stated its operations have held up commendably despite the tepid and lacklustre economy in FY12, contributed by continued strong performance in the powdered drugs segment and animal vaccine sales. On its early redemption of the convertible bonds, Group's working capital needs as well as other on-going corporate plans will not be affected, although mgmt have not recommended a dividend in respect of FY12. Mgmt stated that the reshaping of the Chinese economy bodes well for the Group as the animal husbandry industry is primarily driven by domestic consumption. Group expect China’s appetite for agricultural products to surge as its vast manufacturing sector revives. Company trades at 10.7x P/E, 1.8x P/B.