Accounts of business progress in China tempt US stock investors who are troubled by prospects of domestic economic growth of less than 1% a year. Large international corporations participate in the Chinese market, but their stocks may not be the most exciting in terms of growth prospects. That is why this stock is so enticing: it is listed on NASDAQ, has all its business in China, and has a present market capitalization still below $500 million.
The company is involved in the essential and profitable Healthcare sector. It owns and operates hospitals and satellite clinics in prime areas of Beijing and Shanghai. The management has cleverly chosen localities with large expatriate and diplomatic communities, who can pay for cutting-edge medical services. The business offers a minor profit share to the Chinese Academy of Medical Sciences, which gives it stability and future domestic growth potential.
55% of the company’s revenue comes from marketing and distribution of medical equipment and supplies. This gives the company a platform from which it can address all hospitals and clinics in China. The Bethesda, MD base is a distinct competitive advantage over local rivals in getting representation rights from the best US medical equipment manufacturers.
The management has announced extraordinary business results for the period ended December 2007. Sales have grown by more than 200% during the past nine months. Quarterly business growth is nearly five times more than for the same quarter last year. The company’s business model strongly suggests continued profitability improvements.
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