Rodobo Int. the dairy producer who recently did some new acquisitions is an attractive play in the consolidating Chinese dairy market. As a producer and distributor of high quality formula milk powder products for infants, children, pregnant women, nursing mothers, middle aged and the elderly this company could benefit from the switch to a higher standard of living in China. More and more Chinese consumers get into the habit of drinking milk every day because they have realized that "milk is a kind of almost perfect food". Despite the great impact on the dairy industry, the nutritive value is still essential for the improvement of people's health and physique. As a token of the nutrition necessities and an upgraded consumption structure , dairy products are definitely indispensable for the solid market demand.
The current price of this OTC stock is $ 2.90. Diluted earnings last year were $ 0.42 with a book value of $ 1.33. The acquisitions will expand the production from 200 tons to 1.200 tons per day. A triple of sales and net income could be a possibility which could lead to an EPS of around $ 0.80 this year. A possible uplisting to a mayor exchange could lead us to a higher price. The main problem right now is the lack of liquidity.
So my target price would this year between $ 5.00 - $ 6.00
POSITION: LONG
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