Sunday, August 2, 2009


I opened up a position in APT a week and a half ago, as they make a particularly effective N-95 protection mask against communicable diseases.

Based on the SARS scare, shares shot up for two quarters. This pandemic flu, while not having nearly the high death rates as SARS, is spreading much faster than other pandemics, hence triggering my buy order.

SVA is a Chinese vaccine and hepatitis drug manufacturer. It is already profitable, unlike its US counterparts still in the clinical stage. The Chinese domestic market is huge, and SVA should be able to secure a larger order than the projected one for 10 million doses (5 million people). Even at that conservative number, and estimate of $5 per dose, revenue projects to $50 million annually. This places a buy out offer price of $250 million, which yields a price per share of $6, based on 43 million outstanding shares. At a current price of $4.99, shareholders get the rest of the company (hepatitis drugs) for free. Add in the distribution deal for the Philippines, and other potential orders from other Asian countries, and SVA has some serious upside.

Disclosure: I have long positions in APT and SVA.

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