ORLANDO, Fla., March 31, 2008 (PRIME NEWSWIRE) -- RedChip Visibility, a division of RedChip Companies Inc., today announced it has issued a second quarter fiscal 2008 research update for China Aoxing Pharmaceutical Company Inc. (OTCBB:CAXG), a pharmaceutical company in China specializing in the research, development, manufacture, and distribution of narcotics and pain management products.
Gaurav Aggarwal, MBA, RedChip Research Analyst, reported:
"CAXG completed the acquisition of Shijiazhuang Le Ren Tang Pharmaceutical Ltd. (LRT) in 1QCY08. With the integration of LRT, CAXG has executed a key part of its business strategy by acquiring an established brand, a profitable business, and a synergistic product portfolio with significant commercialization value. However, 2QFY08 revenue was down mainly due to lower than expected sales volumes of Naloxone Hydrochloride injectable and Shuanghuanglian capsules. In addition, the Company is in default on $7 million of loans from Bank of China. The uncertainties caused by these conditions raise doubt about the Company's ability to build its manufacturing facility and accumulate inventory to achieve optimal size.
"We are revising our rating from 'Buy' to 'Hold' to reflect our belief that operating pressures are likely to build from liquidity problems and mounting expenses. We are reducing our 12-month price target to $2.36," Aggarwal concluded.
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http://www.redchip.com/visibility/about.asp?page=vreport&reportid=95&from=03312008news
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