توصية من موقع www.rallyplay.com New Dragon Asia NWD-AMEX Buy Opinion: 0.85 - 1.15 Short-term Sell: 1.85 - 2.65 6months or less Long-term Sell: 2.65 - 3.90 12months or less http://finance.yahoo.com/q?s=nwd http://quotes.barchart.com/texpert.asp?sym=NWD NWD is one of the top flour and instant noodle producers in Mainland China China’s instant noodle market is worth $2 billion with an annual growth rate of 20% NWD's fourth quarter net income rose 10% while gross profits were up 56% In December NWD announced a $700,000 order with KFC China A streamlined company, NWD, closed 3 manufacturing facilities in 2003 New Dragon Asia (NWD) is one of the top flour manufacturers and instant noodle producers in Mainland China. They are a financially solid, streamlined company with growing revenues and momentum, and excellent long-term growth potential. While the company's operations were adversely affected by widespread concerns over the outbreak of Severe Acute Respiratory Syndrome (SARS) and the Avian Bird Flu, both have since been contained. It is currently estimated that the instant noodle market in China, the world's most populous nation with over 1.2 billion people, is worth an approximated $2 billion; with an annual growth rate of 20%. The halt of SARS and the Avian Bird Flu coupled with the start of fiscal 2004 represents a new chapter in the life of NWD. Business Profile - NWD is a holding company whose principal activities are to manufacture, market and distribute instant noodles and flour in the People's Republic of China. Headquartered in Hong Kong, NWD is one of the top flour manufacturers and instant noodle producers in Mainland China. The company operates in two segments: Flour and Instant noodles. Flour segment is engaged in the milling, sale and distribution of flour and related products for use in bread, dumplings, noodles and confectionery. Noodles segment is engaged in the production of instant noodles, which are marketed under regional brands through supermarkets and food stores. Noodles are separated into two broad categories for selling and marketing purposes: packet noodles for home preparation and cup noodles for instant consumption. NWD currently sells over 30 flour and instant noodle products, including “Long Fengi”, one of the most recognizable products in China. Additionally, the company markets its product line through a network of 216 key distributors and 16 regional offices in 27 Chinese provinces. Fundamental Analysis Information - On Wednesday, April 14 NWD announced its financial results for the fourth quarter and fiscal year ended December 25, 2003. Net income for the fourth quarter increased almost 10% to $2.2 million over the same period in 2002 while net sales were down 2.7% at $10.6 million. Gross profit for the three months ended December 25, 2003, increased 56% over 2002’s fourth quarter. The increase is mainly due to the result of a change in product sales mix and an increase in demand for products at the end of the third and fourth quarter of 2003. For fiscal 2003, net income was $2.7 million, compared with $4.2 million a year ago. Sales for fiscal 2003 were $30.8 million compared with $33.7 million a year earlier - reflecting the full impact of SARS especially during the March through June period. "Results for the fourth quarter of fiscal 2003 reflect a significant improvement in business following the negative effect of SARS on operations during the first six months. As we continue in the new fiscal year, management is focused on leveraging New Dragon Asia's strength in production, distribution, brand name awareness and quality recognition within retail and commercial markets,'' said Heng Jing Lu, CEO. He highlighted that results for 2003, particularly the fourth quarter, reflect the implementation of a strategy to produce more premium products which generally require a longer production cycle. The end result is lower output for the full year as the company transitions its operations. In December 2003 the company noted a $700,000 order for flour from the purchasing agents of KFC in China. This is an example of the company's changing production strategy. To help streamline operations and strengthen the company’s bottom line NWD closed three manufacturing factories in 2003: the Xinxiang facility in January 2003; its Xinxian factory in May 2003, and a noodle factory in Taian in December 2003. NWD is one of the top flour manufacturers and instant noodle producers in Mainland China. They are a financially solid, streamlined company with growing revenues and momentum, and excellent long-term growth potential. Yet, despite having over 200 distributors and dozens of easily identifiable brands, NWD has been trading in a fairly tight range since August 2003. But that may not last for long. The end of SARS and an official announcement out of China on April 19 claiming an end to the Avian Bird Flu could help reinvigorate the industry. Over the last two quarters NWD has reported considerable improvements in business following the negative effects of SARS on operations. In mid-April 2004 NWD announced that fourth quarter net income was up almost 10% while gross profits were up 56%. In November 2003 the company reported third quarter net income growth of 8.4% with gross profits up 34.9%. Ultimately, it is important to remember that 2003 was negatively impacted by SARS and the Avian Bird Flu. Operating in a new fiscal year, 2004 represents a fresh earnings period focused on increased production and distribution, new products, and a targeted strategy to expand their customer sales base and product lines. All of which should have a positive impact on NWD’s bottom line and long-term growth potential.