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The Micro Cap Newsletter
Huifeng Bio-Pharmaceutical Technology Inc. (HFGB.OB)
 
     
             
 
In This Issue - HFGB.OB
Business Scope
Industry & Investor Points
Plant Extracts; A Growing Market
Contact HFGB.OB
Huifeng Bio-Pharmaceutical Technology Inc. (HFGB.OB)
Visit HFGB
Visit their website
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Dear Subscriber,
In this edition of The Microcap Newsletter we would like to introduce Huifeng Bio-Pharmaceutical Technology Inc. (HFGB.OB) www.hfgb.cn
 
Huifeng Bio-Pharmaceutical, another reverse Chinese merger type issue, was brought to our attention by the same guys that alerted lucky investors to CPSL, which of course did some amazing things.

Currently, HFGB sells at less than 5 times 2008 earnings and continues to increase its market share in what is a $45 billion plant extract market (which we get into a bit later in the newsletter as we talk about Plant Extracts; A Growing Market).

With China growing in leaps and bounds, and the ever growing need for quality Bio-Pharmaceuticals increasing, now might be a good time to take a look at a company like HFGB.

To learn more about HFGB please read on below...
 
Business Scope
Huifeng Bio-Pharmaceutical Technology Inc. (HFGB.OB)
 

 

 

 

 

 

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Shares Outstanding: 20.5 Million
Approximate Float: 2.1 Million
As of January 11, 2008
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Huifeng located in Xi'an, People's Republic of China, develops and produces plant extracts and pharmaceutical raw materials for use in pharmaceutical, nutraceutical and food production. It is the leading Chinese producer of rutin and related plant-derived chemicals in a class called flavonoids, with medicinal and other beneficial properties. In fact many of the flavonoid products that Huifeng supplies are used in heart and blood vessel medicines.

The company's diverse customer base includes global commodity manufacturers (Nutriceutica Srl, Redox, AIDP Inc.), global food manufacturers (Pacific Rainbow Int'l) and international consumer healthcare companies (Merck China, notrade Pharma AG, Pharmaserv Co.).

Founded in 2002, Huifeng uses proprietary patented processes to extract rutin more efficiently than traditional extraction techniques. Currently only Brazil and China produce rutin and only "HFGB" holds the Chinese patent for the most efficient production method and is the only GMP-approved Chinese vendor of diosmin. Other flavonoid or flavonoid-derived Huifeng products include troxerutin, quercetin, ginkgo biloba, l-rhamnosem; and more recently hesperidin, synephrine and citrus limonoids which are anticipated to add up to an additonal $6 million in revenue and $1.5 million in net income for the company.

According to Huifengs most recent 10Q filing, revenue increased by $1,129,882 from $816,093 for the three months ended September 30, 2006 to $1,945,975 for the three months ended September 30, 2007. Gross profit margin increased from 17.60% to 26% for three months ended September 30, 2007 compared with the same period last year.

The company currently sells at a low multiple and as demand for plant extracts in pharmaceutical, nutraceutical ingredients and food/beverage additives grow worldwide especially due to aging populations, Huifeng Bio-Pharma has and will continue to take full advantage.
 
Industry & Investor Points
  • Demand for plant extracts, as pharmaceutical and nutraceutical ingredients and food/beverage additives, is growing worldwide in all Huifeng end markets.
  • The Company's production efficiency has allowed it to become the dominant Chinese producer and exporter of rutin and to develop related products. In 2005 internal R&D efforts produced efficient methods ofextracting diosmin and l-rhamnose, and the Company has recently expanded production facilities to manufacture these new products.
  • The company has a diverse customer base, including distributors and manufacturers in China, Japan, Hong Kong, Russia, India, Germany and the U.S. In the first 9 months of 2007, approximately 60% of products were sold in China and 40% were exported.
  • The Chinese plant extract industry is highly fragmented, so both government-owned and private acquisition opportunities exist.
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The Company holds all necessary certifications for international and domestic sales: Their production facilities are ISO9001:2000 certified; and they hold a Chinese Good Manufacturing Practices (GMP) certification as well. In January 2007 the Chinese Ministry of Science and Technology, which regulates raw materials extract producers in China, will begin to restrict unqualified producers' sales. The Company's participation in PRC government biopharmaceutical industry initiatives also entitles it to product research and commercialization funding. The company began trading publicly when it completed a reverse merger in 2005, led by the current management team.
 
Plant Extracts; A Growing Market
Plant ExtractsThe demand for flavonoid plant extracts is increasing internationally with the growth of the pharmaceutical markets and the aging of the population in Europe, the United States and China. The major flavonoid products that Huifeng supplies are used in heart and blood vessel medicines.

The Chinese pharmaceutical market is also expected to grow to $60 billion USD by 2010.  Further, in China the population aged 60 and over (currently 10% of the population) is expected to reach 15% by 2015.  U.S. drug and nutraceutical manufacturers' demand for rutin, quercetin and troxerutin is expected to grow by approximately 15% in each of the next four years, according to industry projections.

While plant-based pharmaceuticals are fully integrated into the Chinese health system and prescribed by physicians and hospitals, the demand for nutraceuticals and functional foods is also rising in China.  It is driven by the improvement in living standards, where it is estimated that there are currently 250 million in the new Chinese middle class with growing disposable income to spend on health and consumer products.  This group's use of dietary supplements and packaged foods and drinks is rising rapidly.

The potential for a SARS epidemic caused additional awareness of the need for preventative health care in Asia.  Consumption of vitamins and minerals has risen by almost 18% annually since the mid-nineties, and is expected to rise by 17% annually through 2009.
 
Contact Information
Company Contact:

Huifeng Bio-Pharmaceutical Technology Inc.
16B/F Ruixin Road Bldg. No. 25
Gaoxin Road Xi'an 710075 China
http://www.hfgb.cn/

Investor Relations Contact:

Primary Capital LLC
Daniel Carlson
Phone: 415.460.1165
dcarlson@primaryllc.com
 
We hope you've found this edition of our newsletter interesting and informative. If you have any questions or comments about this newsletter, or the company contained herein, please contact us and we would be happy to speak with you.
 
Regards,
 
The Microcaps.com Team
 
             
     
 
DISCLAIMER & SAFE HARBOR PROVISIONS:

Microcaps.com has been compensated $5000 cash by The Microcap Underground for the dissemination of this email and other creative services for Huifeng Bio-Pharmaceutical Technology Inc. (HFGB.OB). Certain oral statements made by management and certain statements contained in press releases and periodic reports issued by HFGB.OB (the "Company"), as well as those contained herein, that are not historical facts are considered "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934 and, because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements, including those in Management's Discussion and Analysis, are statements regarding the intent, belief or current expectations, estimates or projections of the Company, its Directors or its Officers about the Company and the industry in which it operates, and are based on assumptions made by management. Forward looking statements include without limitation statements regarding: (a) the Company's strategies regarding growth and business expansion, including future acquisitions; (b) the Company's financing plans; (c) trends affecting the Company's financial condition or results of operations; (d) the Company's ability to continue to control costs and to meet its liquidity and other financing needs; (e) the declaration and payment of dividends; and (f) the Company's ability to respond to changes in customer demand and regulations. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that the anticipated results will occur. When issued in this report, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and similar expressions are generally intended to identify forward-looking statements.

Important factors that could cause the actual results to differ materially from those in the forward-looking statements include, among other items, (i) changes in the regulatory and general economic environment; (ii) conditions in the capital markets, including the interest rate environment and the availability of capital; (iii) changes in the competitive marketplace that could affect the Company's revenue and/or cost and expenses, such as increased competition, lack of qualified marketing, management or other personnel, and increased labor and inventory costs; (iv) changes in technology or customer requirements, which could render the Company's technologies noncompetitive or obsolete; (v) new product introductions, product sales mix and the geographic mix of sales.

The Company disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements which are not historical facts contained in this advertisement are forward-looking statements that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, governmental approval processes, the impact of competitive products or pricing, technological changes, and the effect of economic conditions.