Allyme Group Inc (OTC:WWIN)

WEB NEWS

Thursday, August 9, 2012

Comments & Business Outlook

Third quarter of Fiscal 2012 Financial Highlights

  • Revenues increased by 16.0% to $48.2 million from $41.5 million in the same quarter of fiscal 2011.
  • Gross Profit increased by 8.2% to $12.2 million from $11.3 million in the same quarter of the previous fiscal year.
  • Gross Margin decreased to 25.4% from 27.2% in the same quarter of fiscal 2011.
  • Net Income attributable to Winner Medical decreased by 32.0% to $2.3 million from $3.4 million in the same quarter of the previous fiscal year.
  • Basic and Diluted Net Income per Share were $0.10 and $0.09, respectively.

Mr. Jianquan Li, chairman and chief executive officer of Winner Medical, commented, "I am pleased to report that we achieved a double-digit topline growth rate despite very challenging conditions in key export markets such Europe and Japan. As we have seen in previous quarters, we had to respond with lower selling prices in Europe because of the ongoing debt crisis and tightening budgets at hospitals. Such pressures in overseas markets were offset by domestic sales in China, which surged by 76.5% year-over-year to $15.9 million from $9.0 million."

Mr. Li continued, "In the third quarter of fiscal 2012, our sales of PurCotton� consumer products in supermarkets and department stores in China continued to grow, further extending the progress made in past quarters and contributing to China's rise to be our second-largest market globally. The Company's consumer sales doubled, totalling $2.8 million as compared to $1.4 million in the third quarter of fiscal 2011. As of June 30, 2012, the Company operated 44 retail stores throughout China, compared to 37 as of June 30, 2011. As brand building and retail network expansion of this type requires significant upfront investments, we do not expect that our PurCotton� retail business will be profitable in the near term."

Outlook

For the 2012 full fiscal year, the Company now estimates that its revenues will be in the range of $172.4 million to $187.4 million, representing a year-over-year growth rate of between approximately 15% and 25%. We are adjusting guidance in response to the sustained European debt crisis, which has resulted in a decrease in orders from our European customers.


Tuesday, July 24, 2012

Going Private News

SHENZHEN, China, July 24, 2012 /PRNewswire-Asia/ -- Winner Medical Group Inc. (Nasdaq: WWIN) ("Winner Medical" or the "Company"), a leading China-based exporter and retailer of high-quality medical dressings and consumer products made from 100% cotton, today announced that the Company has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Winner Holding Limited ("Parent"), a Cayman Islands exempted company with limited liability and indirectly wholly-owned by Mr. Jianquan Li, and Winner Acquisition, Inc., a Nevada corporation and a wholly-owned, direct subsidiary of Parent ("Merger Sub"). Mr. Jianquan Li is the Company's president, chief executive officer, chairman of the board of directors and principal stockholder.

Subject to satisfaction of the Merger Agreement's terms and conditions, upon consummation of the merger, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent (the "Merger"). Pursuant to the Merger Agreement, each of the Company's shares of common stock issued and outstanding immediately prior to the effective time of the merger (the "Shares") will be converted into the right to receive $4.50 in cash without interest, except for (i) Shares owned by Parent and Merger Sub, including shares to be contributed to Parent by Mr. Jianquan Li and Ms. Ping Tse (Mr. Li's wife) immediately prior to the effective time of the merger pursuant to a contribution agreement, dated as of July 24, 2012, among Parent, Glory Ray Holdings Limited, Mr. Jianquan Li and Ms. Ping Tse, and (ii) Shares held by the Company as treasury stock, which will be cancelled and retired and cease to exist as of the effective time of the merger. The offer represents a premium of 32.3% percent over Winner Medical's closing price of $3.40 per share on March 30, 2012, the last trading day prior to the Company's announcement of its receipt of a "going-private" proposal.


Thursday, May 10, 2012

Comments & Business Outlook

Second quarter of Fiscal 2012 Financial Highlights

  • Revenues increased by 24.4% to $41.3 million from $33.2 million in the same quarter of fiscal 2011.
  • Gross Profit increased by 14.5% to $10.7 million from $9.4 million in the same quarter of the previous fiscal year.
  • Gross Margin decreased to 25.9% from 28.2% in the same quarter of fiscal 2011.
  • Net Income attributable to Winner Medical decreased by 17.3% to $1.9 million from $2.2 million in the same quarter of the previous fiscal year.
  • Basic and Diluted Net Income per Share were both $0.08.

Mr. Jianquan Li, chairman and chief executive officer of Winner Medical, commented, "I am pleased to report that we achieved robust revenue growth in both our medical and PurCotton?businesses and in the domestic marketplace during the past quarter. Sales in Europe continued to increase strongly, achieving a rate of 27.6%, in spite of lower selling prices necessitated by the European debt crisis and tightening budgets at hospitals. Domestic sales in China increased by 42.8% year-over-year to $12.1 million during the quarter, accounting for 29.3% of total sales. These results have propelled China to surpass North and South America to become the Company's second largest market."

Mr. Li continued, "In the second quarter of fiscal 2012, we continued selling our PurCotton?consumer products in supermarkets and department stores, furthering sales channel diversification and brand building efforts. As of May 10, 2012, the Company operated 44 retail stores in China. As more customers come to appreciate our brand and quality, we have seen our customer loyalty program membership expand to approximately 50,000 members."

Second quarter of Fiscal 2012 Financial Performance

Revenues in the second quarter of fiscal 2012 increased by 24.4% to $41.3 million from $33.2 million in the same quarter of the previous fiscal year. The increase was mainly attributable to significant continuing demand from existing and new customers in Europe and robust sales of medical products and PurCotton? products in China.

Outlook

For the 2012 full fiscal year, the Company estimates that its revenues will be in the range of$172.4 million to $187.4 million, representing a year-over-year growth rate of between approximately 15% and 25%. We are adjusting guidance in response to the elongation of the European debt crisis, which has resulted in a decrease in orders from our European customers


Friday, April 20, 2012

Going Private News

SHENZHEN, China, April 20, 2012 /PRNewswire-Asia/ -- Winner Medical Group Inc. (Nasdaq: WWIN) ("Winner Medical" or the "Company") today announced that a special committee of the Company's board of directors (the "Special Committee") has appointed William Blair & Company, L.L.C. as its independent financial advisor. Cleary Gottlieb Steen & Hamilton, L.L.P. has been retained as the Special Committee's legal counsel.

As previously announced, the Company's board of directors formed the Special Committee to review and evaluate the April 1, 2012 non-binding proposal from its chairman and chief executive officer, Mr. Jianquan Li, to acquire all of the outstanding shares of the Company's common stock not currently owned by him and his wife, Ms. Ping Tse. The Special Committee is considering Mr. Li's proposal as well as the Company's other alternatives. There can be no assurance that the Special Committee will recommend Mr. Li's proposal, nor can there be any assurance as to when, if ever, or on what terms any alternative transaction will be consummated.


Monday, April 2, 2012

Going Private News

SHENZHEN, China, April 2, 2012 /PRNewswire-Asia/ -- Winner Medical Group Inc. (Nasdaq: WWIN) ("Winner Medical" or the "Company"), a leading China-based exporter and retailer of high-quality medical dressings and consumer products made from 100% cotton, today reported that its board of directors (the "Board of Directors") has received a preliminary, non-binding proposal from its chairman and chief executive officer, Mr. Jianquan Li ("Mr. Li").  Mr. Li proposes to acquire all of the outstanding shares of the Company's common stock not currently owned by him and his wife, Ms. Ping Tse, at a proposed price of $4.30 per share in cash as part of a going private transaction.  Mr. and Mrs. Li currently beneficially own approximately 73.95% of the Company's common stock.  A copy of the text of the proposal letter to the Board of Directors is set forth below.

In response, the Board of Directors formed a special committee of independent directors, consisting of Messrs. Wenzhao Liang, Xuedong Wu and Lawrence Xiaoxia Pan, to consider this proposal and any alternative transactions.  The special committee elected Mr. Wenzhao Liang as its chairman, and the special committee has been authorized to retain independent financial advisors and legal counsel to assist it in its work.  The Board of Directors cautions the Company's shareholders, and others considering trading in its securities, that it has only received a proposal.  No decision has been made with respect to the Company's response to the proposal.  There can be no assurance that any definitive offer will be made, that any agreement will be executed or that a transaction with Mr. Li or any other transaction will be approved or consummated.  The Company is not obligated to make, and does not at this time anticipate making, any further public statements about this matter or the activities of the special committee unless and until either the Company enters into a definitive agreement for a transaction or the special committee determines that no such transaction will be effected.


Friday, February 10, 2012

Comments & Business Outlook

First Quarter 2012 Results

  • Revenues increased by 22.6% to $41.3 million from $33.7 million in the same quarter of fiscal 2011.
  • Gross Profit increased by 8.6% to $10.3 million from $9.5 million in the same quarter of the previous fiscal year.
  • Gross Margin decreased to 24.9% from 28.1% in the same quarter of fiscal 2011.
  • Net Income attributable to Winner Medical decreased by 23.7% to $2.5 million from $3.3 million in the same quarter of the previous fiscal year.
  • Both Basic and Diluted Net Income per Share were $0.10 vs. $0.14 in previous year.

Mr. Jianquan Li, chairman of the board of directors and chief executive officer of Winner Medical, commented, "During the past quarter, we achieved revenue growth in both our medical and PurCotton businesses. Sales in Europe, our largest market, increased by 45.8% to $13.1 million in the first quarter of fiscal year 2012, despite the lower selling prices of certain products due to a challenging macro environment brought on by the European debt crisis and tightening budgets at hospitals. We are particularly encouraged by increasingly strong domestic sales in China, which reached $12.1 million in the three-month period ended December 31, 2011. As a percentage of revenue, sales in China increased to 29.3%, second only to Europe."

Mr. Li continued, "For the medical business in China, we have been actively expanding our sales channels by increasing the number of local distributors covering more hospitals and penetrating deeper into existing hospital customer bases, drug store retail chains and other sales channels. In the first quarter of fiscal 2012, we opened two more of our self-branded PurCotton retail stores. As of December 31, 2011, the Company operated 41 retail stores in China, compared to 28 at the end of the same quarter of the previous fiscal year. As more customers come to appreciate our PurCotton brand, we have seen our customer loyalty program membership rapidly increase to approximately 40,000 members in February 2012. Meanwhile, the repurchase rate for members of our customer loyalty program is more than 60%."

Mr. Xiuyuan Fang, chief financial officer of Winner Medical, added, "We are pleased to have maintained positive gross profit growth in the first quarter of the 2012 fiscal year. Our gross margin declined somewhat to 24.9% from 28.1% in the same quarter of the previous fiscal year, mainly due to lower selling prices for certain long-term customers in Europe and the U.S. and a higher average purchase price for cotton, which we had purchased in previous quarters. During this time of tough macroeconomic conditions and business expansion into the Chinese market, our operating and net margins will be under some pressure. Yet, we believe that we are acting in strategically prudent ways that will better position the Company for enhanced profitability in the future."

Outlook

For the 2012 full fiscal year, the Company reiterates its revenues estimate to be in the range of $179.9 million to $194.8 million, representing a year-over-year growth rate of between approximately 20% and 30%.


Wednesday, January 4, 2012

Corporate Governance
On December, 28, 2011, the board of directors (the “Board”) of Winner Medical Group Inc. (the “Company) received a resignation letter from Mr. Larry Goldman, wherein Mr. Goldman resigned as a director of the Company and as the chairman of the audit committee of the Board and as a member of the executive compensation and nominating committees of the Board.  Mr. Goldman’s resignation did not stem from any disagreements with the Board or otherwise.  A copy of Mr. Goldman’s resignation letter is attached hereto as Exhibit 99.1.
 
On January 3, 2012, the Board appointed Mr. Wenzhao Liang as a director of the Board, to serve out the remainder of the term of Mr. Goldman’s directorship, and as the chairman of the audit committee of the Board and as a member of the executive compensation and nominating committees of the Board.  The Company has determined that Mr. Liang is independent, as defined by the Rules of the Nasdaq Stock Market, and as an audit committee financial expert, as defined by the Rules of the Nasdaq Stock Market and the Rules of the Securities Exchange Act of 1934.

Monday, December 26, 2011

Investor Alert
SHENZHEN, China, December 23, 2011 -- Winner Medical Group Inc. (Nasdaq: WWIN) (“Winner Medical” or the “Company”), a leading China-based exporter and retailer of high-quality medical dressings and consumer products made from 100% cotton, today announced that BDO China Shu Lun Pan Certified Public Accountants LLP (“BDO China”) has been appointed as the Company’s independent registered public accounting firm to replace BDO Limited (“BDO Hong Kong”), which resigned on December 23, 2011.
 
The decision to change auditors was not the result of any disagreements between the Company and BDO Hong Kong on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures. BDO Hong Kong’s resignation was purely a business decision related to providing certain types of services, and was not caused by any action or inaction of Winner Medical.

Friday, December 23, 2011

Comments & Business Outlook

First Quarter of Fiscal 2012 Financial Highlights

  • Revenues increased by 22.6% to $41.3 million from $33.7 million in the same quarter of fiscal 2011.
  • Gross Profit increased by 8.6% to $10.3 million from $9.5 million in the same quarter of the previous fiscal year.
  • Gross Margin decreased to 24.9% from 28.1% in the same quarter of fiscal 2011.
  • Net Income attributable to Winner Medical decreased by 23.7% to $2.5 million from $3.3 million in the same quarter of the previous fiscal year.
  • Basic and diluted net income per share were both $0.10 for the first quarter of fiscal 2012 versus both being $0.14 for the same quarter of the previous year.

Mr. Jianquan Li, chairman of the board of directors and chief executive officer of Winner Medical, commented, "During the past quarter, we achieved revenue growth in both our medical and PurCotton businesses. Sales in Europe, our largest market, increased by 45.8% to $13.1 million in the first quarter of fiscal year 2012, despite the lower selling prices of certain products due to a challenging macro environment brought on by the European debt crisis and tightening budgets at hospitals. We are particularly encouraged by increasingly strong domestic sales in China, which reached $12.1 million in the three-month period ended December 31, 2011. As a percentage of revenue, sales in China increased to 29.3%, second only to Europe."

Mr. Li continued, "For the medical business in China, we have been actively expanding our sales channels by increasing the number of local distributors covering more hospitals and penetrating deeper into existing hospital customer bases, drug store retail chains and other sales channels. In the first quarter of fiscal 2012, we opened two more of our self-branded PurCotton retail stores. As of December 31, 2011, the Company operated 41 retail stores in China, compared to 28 at the end of the same quarter of the previous fiscal year. As more customers come to appreciate our PurCotton brand, we have seen our customer loyalty program membership rapidly increase to approximately 40,000 members in February 2012. Meanwhile, the repurchase rate for members of our customer loyalty program is more than 60%."

Mr. Xiuyuan Fang, chief financial officer of Winner Medical, added, "We are pleased to have maintained positive gross profit growth in the first quarter of the 2012 fiscal year. Our gross margin declined somewhat to 24.9% from 28.1% in the same quarter of the previous fiscal year, mainly due to lower selling prices for certain long-term customers in Europe and the U.S. and a higher average purchase price for cotton, which we had purchased in previous quarters. During this time of tough macroeconomic conditions and business expansion into the Chinese market, our operating and net margins will be under some pressure. Yet, we believe that we are acting in strategically prudent ways that will better position the Company for enhanced profitability in the future."

Outlook

For the 2012 full fiscal year, the Company reiterates its revenues estimate to be in the range of $179.9 million to $194.8 million, representing a year-over-year growth rate of between approximately 20% and 30%.

This forecast reflects the Company's current and preliminary view, which is subject to change.


Auditor trail

SHENZHEN, China, December 23, 2011 /PRNewswire-Asia/ -- Winner Medical Group Inc. (Nasdaq: WWIN) ("Winner Medical" or the "Company"), a leading China-based exporter and retailer of high-quality medical dressings and consumer products made from 100% cotton, today announced that BDO China Shu Lun Pan Certified Public Accountants LLP ("BDO China") has been appointed as the Company's independent registered public accounting firm to replace BDO Limited ("BDO Hong Kong"), which resigned on December 23, 2010.

The decision to change auditors was not the result of any disagreements between the Company and BDO Hong Kong on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures. BDO Hong Kong's resignation was purely a business decision related to providing certain types of services, and was not caused by any action or inaction of Winner Medical.


Friday, December 9, 2011

Investor Presentations
 
On December 9, 2011, Winner Medical Group (the “Company”) published a Power Point presentation that will be given on behalf of the Company to various potential investors in the month of December.  A copy of that Power Point presentation is attached hereto as Exhibit 99.1.

Monday, November 14, 2011

Comments & Business Outlook

Fourth Quarter 2011 Results

  • Revenues increased by 46.7% to $41.4 million from $28.2 million in the same period of the prior fiscal year.
  • Gross Profit increased by 21.2% to $10.7 million from $8.8 million in the same period of the prior fiscal year.
  • Gross Margin decreased to 25.8% from 31.3% in the same period of the prior fiscal year.
  • Net Income attributable to Winner Medical decreased by 14.5% to $2.7 million from $3.1 million in the same period of the prior fiscal year.
  • Basic and diluted net income per share were both $0.11.


 

Mr. Jianquan Li, chairman and chief executive officer of Winner Medical, commented, "We are pleased to report a revenue increase of 46.7% to $41.4 million for the fourth quarter of fiscal year 2011, driven by both our medical and PurCotton® businesses. Increased sales in various markets reflect customers' growing recognition of our brand and demand for our products."

Mr. Li continued, "During the quarter, we continued building up our retail channel for PurCotton® products and opened our 41st chain store, compared to 22 stores operating as of the fourth quarter 2010. All PurCotton® stores are located in major Chinese cities and their operations integrate with our online sales platform. This retail expansion has required the Company to make accompanying investments in operations to support growth, which reduced the Company's net income for the quarter. However, we feel this investment will increase long-term value for our shareholders and will earn attractive returns over future quarters."

Mr. Xiuyuan Fang, chief financial officer of Winner Medical, added, "Against the macro background of cotton price fluctuations, our gross profit continued to grow, yet pressure was put on the Company's gross margin, which declined to 25.8% during the quarter. The decrease was driven by a higher average purchasing price of cotton, our primary raw material, as well as an increase in the volume of cotton consumed due to increased orders. As a strategic move, the Company decided to increase raw material inventory of relatively high-quality cotton to hedge against potential future price inflation and continue meet customers' needs. However, we are pleased to see sales growth in our higher-margin PurCotton® retail business. Such growth is expected to improve the Company's overall gross margin level in future periods."


Thursday, September 1, 2011

Investor Presentations
On September 1, 2011, Winner Medical Group (the “Company”) published a PowerPoint presentation that will be given on behalf of the Company to various potential investors in the month of September.

Wednesday, August 10, 2011

Comments & Business Outlook

Third Quarter 2011 Unaudited Financial Results

Winner Medical reported net sales of $41.5 million, an increase of 34% as compared to the same period last year, due to higher pricing and strong reorders of medical and PurCotton products. Sales increased 52% year-over-year in China to $9.0 million, driven by increased sales of PurCotton products. Sales to Europe remained strong year-over-year at $16.1 million, a 30% increase compared to the same period last year, reflecting the Company's continuing effort to maintain existing customers and add new customers. Exports to Japan grew 47% as a result of larger orders and higher selling prices. Sales to North and South America remained steady, increasing 19% year-over-year to $7.5 million, which is notable for an increase in orders from Brazilian clients, who is increasing its reliance on imported products demand. Cost of sales increased by $8.2 million, to $30.2 million, for the reporting period. The increase of cost of sales was mainly attributable to a higher average purchasing price of cotton, the Company's primary raw material, during the reporting period as compared with the same period last year.

Gross profit increased 27% to $11.3 million compared to the third quarter of fiscal 2010. Gross margin decreased to 27.2% as compared to 28.9% in the same three-month period of 2010. The decrease in gross margin was attributable to an increase in the cost of cotton. The Company continues to adjust its business portfolio by developing and marketing advanced medical products as well as PurCotton® jumbo rolls and retail products, which carry higher gross margins.

Selling, general and administrative expenses increased to $7.3 million in the third quarter of fiscal 2011, from $5.3 million in the same quarter of 2010. Adjusted selling, general and administrative expenses (non-GAAP), which exclude share-based compensation expenses, were $7.2 million versus $5.0 million for the same period of 2010. The increase was primarily due to higher salary and leasing expenses for the PurCotton retail business and R&D expense for advanced and sophisticated products.

The income tax provision for the third quarter of fiscal 2011 was $0.6 million, compared to $0.3 million for the same period in 2010, representing an effective tax rate of 14.1% for this reporting period, versus 9.3% in the same period last year. The comparatively lower effective tax rate for the three months ended June 30, 2010 was due to an income tax provision for the filing and settlement of income taxes while there was no such adjustment for this reporting period.

Net income attributable to Winner Medical increased by 2% to $3.4 million, or $0.14 per basic share, compared to net income of $3.4 million, or $0.14 per basic share, for the third quarter of fiscal 2010. This slight increase in net income was primarily due to an increase in sales and net income from medical products offsetting the net loss from the PurCotton® retail business, which recorded a loss of $0.9 million during the reporting period. The PurCotton® retail business is still in its start-up stage, and requires a significant investment before it can be expected to contribute profits.

Excluding the non-cash share-based compensation expenses and realized gain on commodity financial instruments, adjusted net income (non-GAAP) was $3.4 million for the third quarter of fiscal 2011, a decrease of 5% from $3.6 million in the same period of 2010. The adjusted basic earnings per share (non-GAAP) was $0.14 for the three months ended June 30, 2011 versus $0.15 per share for the comparable period last year.


Mr. Jianquan Li, chairman and chief executive officer of Winner Medical, commented: "the strong sales increase in Japan, Europe and North and South America, especially in Brazil, reflects customers' recognition of our quality products and timely delivery service, as well as deeper penetration into various regions around the globe. In addition, during the third quarter of fiscal year 2011, sales of our PurCotton® products rapidly increased, as we continued to have success expanding distribution channels in China and as more Chinese consumers become aware of and use our products."

Mr. Li continued, "Despite pressure brought on by rising cotton prices , we still managed to grow gross profit dollars while minimizing cost pressure on gross margins. We will continue to adjust our business portfolio to carry higher gross margin products and reduce costs where appropriate to offset renminbi appreciation, inflation as well as raw material price fluctuation."

Fiscal Year 2011 Guidance

Winner Medical has increased its forecast of total revenues for fiscal year 2011 to be in the range of $144 million to $152 million, representing a 25%-32% year-over-year increase.


Friday, May 13, 2011

Analyst Reports

Rodman and Renshaw on WWIN                      5/12/2011

Despite a Futures Trading Loss, a Fine F2Q11 Performance

F2Q11 financial results

With the exception of an unexpected futures trading loss, Winner Medical (Ticker: WWIN, Market Outperform) delivered a F2Q11 financial performance that was slightly above our expectation. Total revenue grew 27% YoY to $33.2 million, above our estimate of $30.0 million. Gross profit increased 27% YoY to $9.4 million, above our expectation of $8.7 million. Non-GAAP net income increased 31% YoY to $3.8 million, or $0.16 per diluted share, also above our estimate of $3.5 million or $0.14 per diluted share. Largely due to a $1.6 million loss from cotton futures trading, the company’s GAAP F2Q11 net income was $2.2 million, or $0.09 per diluted share, below our respective estimate of $3.2 million or $0.13 per diluted share.

As of March 31, the company had cash and cash equivalents of $12.0 million, working capital of $47.9 million, total assets of $134.7 million, and $114.4 million of shareholders’ equity.

The company reaffirmed its fiscal 2011 guidance of realizing $138-150 million of revenue, representing a 20-30% YoY growth.

Adjusting estimates and maintaining Market Outperform rating and $9 price target

We have tweaked our model and adjusted our estimates for FY2011 and FY2012 to reflect the F2Q11 financial performance. We now project revenue in FY11 and FY12 will reach $143.6 million and $178.4 million, respectively. We expect gross profit will reach $41.6 million in FY11, implying a gross margin of 29.0%, and further grow to $55.9 million in FY12 with a corresponding gross margin of 31.3%. We estimate non-GAAP net income in FY11 and FY12 will reach $15.6 million and $20.8 million, or $0.63 and $0.82 per diluted share, respectively. We continue to believe Winner Medical represents a compelling growth story, and we are maintaining our Market Outperform rating on the shares of the company as well as our price target of $9, which is derived from applying 13x our CY2011 EPS estimate of $0.67.

Risks

Major risks include customer concentration risk, foreign currency risk, raw material price and availability risk, execution risk, competition risk, regulatory risk, as well as country risks associated with operating and investing in China.


Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Thursday, May 12, 2011

Liquidity Requirements
The Company believes that its currently available working capital, after taking into account the credit facilities referred to above, short-term loans and future cash provided by operating activities will be sufficient to meet its operations at its current level and working capital and capital expenditure needs over the next twelve months. The Company’s future capital requirements will depend on many factors, including its rate of revenue growth, the expansion of its marketing and sales activities, the timing and extent of spending to support product development efforts and expansion into new territories, the timing of new products or services introductions, the timing of enhancements to existing products and services and the timing of capital expenditures. Also, the Company may make investments in, or acquisitions of, complementary businesses, services or technologies which could also require it to seek additional equity or debt financing. To the extent that available funds are insufficient to fund its future activities, the Company may need to raise additional funds through public or private equity or debt financing.

Wednesday, May 11, 2011

Comments & Business Outlook

Second Quarter Results:

  • Revenue increased by 27% over Q2 FY 2010 to $33.2 million
  • Adjusted net income increased 31% YOY to $3.8 million
  • Adjusted basic EPS increased 23% YOY to $0.16
  • Domestic China sales increased 61% YOY to 8.5 million
  • Sales to North and South America increased 47% YOY to 7.5 million
  • Reiterates FY 2011 revenue guidance of $138-150 million, representing 20%-30% YOY Growth

GeoTeam® Note: 2011 First quarter analyst EPS estimates were $0.15.

Mr. Jianquan Li, Chairman and Chief Executive Officer of Winner Medical, commented: "During the second quarter of fiscal year 2011, sales of our medical products and PurCotton products in China rapidly increased, signifying robust demand and gains in market share by Winner Medical as we continue to have success penetrating new sales and distribution channels in China and as more Chinese consumers become aware of and accept our products. In addition, the strong sales increase in North and South America reflects local manufacturers continuing to outsource production to China. The Company expects these favorable trends will continue for the near future and support growth in Winner's sales and earnings."


Monday, February 28, 2011

Investor Presentations
On February 28, 2011, Winner Medical Group published a PowerPoint presentation that will be given on behalf of the Company to various potential investors in the month of March. On February 28, 2011, Winner Medical Group published a PowerPoint presentation that will be given on behalf of the Company to various potential investors in the month of March.

Friday, February 11, 2011

Analyst Reports

Rodman & Renshaw on WWIN                       02/10/2011

F1Q11 Results Review 

Winner Medical (Ticker: WWIN, Market Outperform) reported F1Q11 results that as a whole fell a touch shy of our expectations. Total revenue grew 19.3% YoY to $33.7 million, slightly below our estimate of $34.5 million but beating Street consensus of $33.3 million. Gross profit increased 0.5% YoY to $9.5 million with a gross margin of 28.1%, below our respective expectations of $10.8 million and 31.4%. Non-GAAP net income grew 10.7% YoY to $3.6 million, but slightly below our estimate of $3.7 million. EPS for the quarter was $0.15, in-line with both our estimate and Street consensus.

F1Q11 Highlights and Discussions 

Cotton price spike dampening sales in the first half of F1Q11: Cotton price continued to rise in the quarter, resulting in some customers delaying orders at the beginning of the quarter and compression of gross margin. As cotton price remained high throughout the quarter and customers who postponed orders having depleted their inventories, sales started to pick up in November and reached a historical monthly high in December. Measuring by geography, sales to America continued to be the primary growth driver, soaring 50.2% YoY. Sales in China grew only 1% YoY. However, the unusually strong sales of protective gowns and face masks in the same period of last year due to the outbreak of H1N1 set a high base for comparison. In terms of product segment, traditional medical products delivered approximately 7.2% YoY sales growth, while PurCotton products (including both wholesale and retail) grew 78.1% YoY and contributed to 13.3% of total revenue. We continue to expect PurCotton products will be the most important growth driver for the company, with estimated annual growth of over 100% from FY2010 to FY2011.

Gross margin expected to recover in the remaining of 2011: Gross margin in FQ1 contracted by 320bps sequentially to 28.1%, plagued by rising cotton price. The company believes that the medical disposable markets have largely accepted the cotton price increase and therefore has increased its product selling prices correspondingly. In addition, the surging cotton costs are likely to force some smaller competitors out of the market, which could benefit Winner Medical in gaining market share. As such, we believe the company’s overall gross margin will improve gradually for the remainder of 2011.

PurCotton retail business update: PurCotton retail sales, gross profit, and net loss were $0.9 million, $0.48 million, and $0.5 million in the quarter. As of February 2011, the company operates 29 chain stores in Beijing, Shanghai, and Guangdong province. The company is in the process of opening more stores and penetrating into new cities including Hangzhou, Tianjin, and Hong Kong. According to management, the first batches of stores opened in Shenzhen have achieved sales growth every month and have already turned in profit. Recently opened stores have also increased sales every month and received positive feedbacks from customers. Management still plans to operate 100 chain stores by the end of 2011. On the ecommerce front, flow to the online PurCotton stores has increased significantly. However, the conversion rate to purchase still has not reached the target rate of 2.5-3%. The company is planning to launch a new wave of promotion in the next quarter to boost


Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

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Member SIPC.


Thursday, February 10, 2011

Comments & Business Outlook
Fiscal First Quarter 2011 Results (in millions of USD, except per share data)

   
Q1 FY2011
   
Q4 FY2010
   
% Change
   
Q1 FY2010
   
% Change
 
Net Sales
  $ 33.7     $ 28.2       19.35 %   $ 29.8       13.2 %
Cost of Sales
  $ 24.2     $ 19.4       24.74 %   $ 20.4       19.0 %
Gross Profit
  $ 9.5     $ 8.8       7.3 %   $ 9.4       0.5 %
Gross Margin
    28.1 %     31.3 %     (10.1 )%     31.7 %     (11.2 )%
Net Income Attributable to Winner Medical Group Inc.
  $ 3.3     $ 3.1       6.7 %   $ 3.9       (15.1 )%
EPS (Diluted)
  $ 0.14     $ 0.13       7.7 %   $ 0.17       (17.6 )%

Mr. Jianquan Li, Chairman and Chief Executive Officer of Winner Medical, commented, “During the first quarter of fiscal year 2011, cotton prices continued to increase and these raw material price increases were shifted to our customers. Early in the quarter, some customers chose to delay purchases and reduced their inventory while monitoring cotton price trends. Starting in November, having depleted the majority of their inventory, our customers increased their purchases again, resulting in December sales being one of the strongest months that Winner Medical has recorded in recent years. I believe the medical dressings and medical disposables markets have now largely accepted the cotton price increases from last year and we expect positive margin and sales growth for the remainder of 2011.”

Winner Medical reaffirms its total revenues in fiscal year 2011 to be in the range of $138 million to $150 million, representing a 20%- 30% year-over-year increase.


Thursday, January 20, 2011

Comments & Business Outlook

SHENZHEN, China, January 20, 2011 /PRNewswire-Asia/ -- Winner Medical Group Inc. today announced that one of its subsidiaries, Huanggang Winner Cotton Co., Ltd., was recently awarded a Cotton Processing Certificate by the State Development and Reform Commission.

Mr. Jianquan Li, Founder, President and Chief Executive Officer of Winner Medical commented, “This is an important strategic milestone for Winner Medical. The ability to process our own cotton seed will expand our vertically integrated operating process upstream and will provide us with more stringent quality controls. By internalizing this process, we expect to substantially increase the consistency and quality of our processed cotton, reduce our raw material and production costs and improve our product quality.”


Wednesday, January 5, 2011

Analyst Reports

Rodman & Renshaw on WWIN                           1/5/2011

From Gauze to Diapers – A Two-Pronged Growth Story 

We are initiating coverage of Winner Medical Group (‘Winner Medical”, Ticker: WWIN) with a Market Outperform/Speculative Risk Rating and a 12-month Price Target of $9. Founded in 1991, the company is the largest Chinese exporter of medical dressing and disposable products.

Investment Thesis

We view Winner Medical as an evolving growth story. It is a story of a traditional medical dressings and disposables manufacturer and exporter morphing into an enterprise that utilizes its manufacturing expertise and competitive advantages to reach beyond its legacy medical supplies business and venture into the vast Chinese consumer market.

Medical dressings and disposables have been the company’s bread and butter business since inception. Even during the recent global recession, the segment still delivered double-digit annual sales growth, driven by the relatively inelastic demand for low-cost medical supply products worldwide. With a broad product portfolio, a consistently high product quality, and customized client services, we believe the company will maintain its industry leadership position and continue to achieve strong growth in this segment in the foreseeable future.

The company's foray into the fast growing Chinese consumer market represents the most significant long term growth driver for the company, in our opinion. In fact, we believe moving from medical dressings and disposables to consumer hygiene products is a natural business development progression. It is consistent with the company's production competency, and builds upon the high quality foundation and reputation that the company has already earned through its legacy medical supplies export business. Supported by its own patented technology, Winner Medical is introducing its highly promising PurCotton product line, which we believe can deliver strong revenue growth and expand margins for years to come. In our opinion, innovative production technology, superior quality, and bespoke marketing strategies that include branded high-end retail stores are some of the key factors that should enable PurCotton products to compete effectively in the Chinese consumer market.

Valuation 

Winner Medical shares are currently trading at 8.1x our estimated CY2011 EPS of $0.66, significantly below its comparable peer average of 13.8x. We believe the growth prospects of the PurCotton consumer business has not been fully reflected in the current valuation, and the Street is still largely valuing the company as a low-cost medical supplies exporter. Our 12-month price target of $9 is based on a 13x multiple applied to our CY2011 EPS estimate of $0.66, slightly below the peer group’s multiple average.

Risks 

Major risks include customer concentration risk, foreign currency risk, raw material price risk, execution risk, competition risk, regulatory risk, as well as country risks associated with operating in China.

Notice Regarding Privacy and Confidentiality: 


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Wednesday, December 8, 2010

Comments & Business Outlook

Winner Medical Group Inc.  today reported consolidated financial results for the fourth quarter and full fiscal year ended September 30, 2010.

Fiscal Fourth Quarter 2010 Results (Amounts in USD millions)

 

Q4 FY2010

Q4 FY2009

% Change

 

Net Sales

$28.2

$27.7

2.1%

 

Cost of Sales

$19.4

$19.3

0.5%

 

Gross Profit

$8.8

$8.4

5.8%

 

Gross Margin

31.3%

30.2%

3.6%

 

Net Income Attributable to Winner Medical Group Inc.

$3.1

$2.9

5.9%

 

Basic EPS

$0.13

$0.13

-

 
       


Fiscal Year 2010 Results (Amounts in USD millions)

 

FY2010

FY2009

% Change

 

Net Sales

$115.0

$98.4

16.9%

 

Cost of Sales

$80.4

$70.4

14.2%

 

Gross Profit

$34.6

$27.9

23.7%

 

Gross Margin

30.0%

28.4%

5.6%

 

Net Income Attributable to Winner Medical Group Inc.

$13.1

$9.1

43.4%

 

Basic EPS

$0.57

$0.41

39.0%

 
       

Mr. Jianquan Li, Chairman and Chief Executive Officer of Winner Medical, commented, "During the past year we made significant progress on several of our growth initiatives, which are evidenced in our full year results and stable gross margins. We are pleased with our full year results despite a challenging fourth quarter, a period where we experienced market effects from European debt crisis and rising raw material prices. Faced with these pressures, the Company increased its selling prices, to pass along raw material cost increases to customers, signed long term contracts with its raw material suppliers and entered into several cotton forward contracts to hedge future price fluctuations. During fiscal year 2010, we enhanced our production efficiencies and implemented more stringent cost controls, which enabled us to improve our margins and increase profitability.

"We are confident that the actions we have taken will yield further operating benefits during 2011. Our brand and competitive position continues to improve as rising commodity costs drive smaller competitors to reduce output. As we adjusted prices and gained additional market share by expanding distribution in China and abroad, we are confident in achieving our target of 20% to 30% revenue growth per annum," Mr. Li concluded.


Friday, November 12, 2010

Comments & Business Outlook

Preliminary Fiscal Fourth Quarter 2010 Results (Amounts in millions)


Q4 FY2010


Q4 FY2009


% Change


 

Net Sales

$28.2

$27.7

2.1%

 

Cost of Sales

$19.4

$19.3

0.5%

 

Gross Profit

$8.8

$8.4

5.8%

 

Gross Margin

31.3%

30.2%

1.1%

 

Net Income Attributable to Winner Medical Group Inc.

$3.1

$2.9

5.7%

 
             

"We maintained stable gross margins and delivered modest fourth-quarter operating results despite pressure from the European debt crisis, a parabolic increase in raw material prices, and a rising RMB, all of which occurred simultaneously," said Jianquan Li, Chairman and Chief Executive Officer of Winner Medical. "During the past year we have made significant progress on several of our growth initiatives which are evidenced in our full year results, which include stable gross margins. We are confident the actions we have taken will yield further operating benefits during 2011. Our brand and competitive position continues to improve as rising commodity costs drive smaller competitors out of business. As we raise prices and gain additional market share by expanding distribution in China and abroad, we are confident in achieving our revenue growth to our target rate of 20%-30% per annum."

Preliminary Fiscal 2011 Guidance

Winner Medical expects its total revenues in fiscal year 2011 to be in the range of $138 million to $150 million, representing a 20-30% year-over-year increase. This forecast reflects Winner Medical's current and preliminary view, which is subject to change.


Wednesday, August 11, 2010

Comments & Business Outlook

Third Quarter Fiscal 2010 and Nine Months Fiscal 2010 Summary (in millions of U.S. Dollars, except per share data)

                                 Q3      Q3           9 Months 9 Months
                               FY2010  FY2009   Y/Y    FY2010   FY2010   Y/Y
    Net Sales                  $30.9    $24.4  27.0%    $86.8    $70.7  22.7%
    Cost of Sales              $22.0    $17.2  28.1%    $61.1    $51.1  19.4%
    Gross Profit                $8.9     $7.2  24.4%    $25.7    $19.6  31.3%
    Income from Operations      $3.6     $3.7  -2.1%    $11.4     $7.6  50.4%
    Net Income Attributable to
     Winner Medical Group Inc.  $3.4     $3.1  10.1%    $10.0     $6.2  61.3%
    Diluted EPS                 $0.14    $0.14  0%      $0.43     $0.28 53.6%

"Winner Medical delivered solid third-quarter operating results under the shadow of the European debt crisis and an increased in raw material prices. Our operating numbers were benefited from accelerating growth in the North and South American and European markets, as well as a continuing increase in sales for PurCotton(R) products," said Jianquan Li, Chairman and Chief Executive Officer of Winner Medical. "Our PurCotton business is performing well. In addition to opening several new retail stores, we are in the initial phase of launching Business-to-Customer online shopping platform to complement our brick-and-mortar business. We continue to add talents across all aspects of the business, including store management, brand building, and e-commerce. These investments position our PurCotton business for robust long-term top and bottom line growth."

"Looking forward, we will continue to reshape and strengthen our portfolio, by maintaining good relationships with existing large foreign clients, such as Cardinal Health Inc. and Covidien Plc., and expand our distribution network for our medical products sales in China through distributors and direct to hospitals, as a result of China's medical reform, while accelerating sales of PurCotton(R) brand products through retail sales in our chain stores and supermarkets, on-line sales and wholesale distribution sales to large customers. As more consumers around the world buy more products that better protect their health and the environment, our PurCotton(R) products are well positioned to meet their needs. We expect to fund these key strategic investments through our strong cash flows," Mr. Li said.