China Tracker - Details for China Ritar Power (CRTP)

 China Ritar Power
 Analyst Coverage
2011-06-26Rodman & RenshawDowngradeTerminatedn/a
 

Terminating Coverage: Effective immediately, we are terminating coverage on China Ritar Power Corp. to better allocate resources within our coverage universe. Our last rating for CRTP was Market Outperform / Speculative Risk with a price target of $10.00. Investors should not rely on our previously published financial projections.

2011-04-18Roth CapitalDowngradeSuspendedn/a
 

We are suspending research coverage on shares of China Ritar Power (CRTP), based on the delayed filing of its 2010 Form 10-K and the resulting Nasdaq decision to halt trading of the Company's stock. We will consider re-establishing coverage once the company is current with its filings and trading resumes.

2011-03-21Global HunterDowngradeTerminatedn/a
 

We are discontinuing coverage of these companies due to the departure of our analyst and due to a shift in our resources to other areas in the China space.

2010-11-16Roth CapitalReiterationBuy$4.50
 

We are lowering our estimates to reflect Q3 results and our tempered outlook. We are also lowering our PT to $4.50 (from $6.00), primarily reflecting our decreased estimates.

2010-11-05Roth CapitalReiterationBuy$6.00
 

SYUT posted better-than-expected 2Q results with revenue of $41.2MM and a loss of $0.37 per share. Investors' attention should now shift to the recovery prospect of the company. We expect management will focus on rebuilding consumer confidence/brand, boosting sales of high margin Super series, and managing costs to regain market share and improve profitability. We believe the worst is now behind and initial signs of business improvement bode well. We are encouraged by management's upbeat commentary on sales/profitability for coming quarters though a full recovery may not be seen until early FY12 in our view. Maintain BUY rating and $15.00 price target.

Given the company's 2Q10 cash balance of $9.5mm (excl. $5mm restricted cash) and short acquisition timeframe, we do not anticipate the deal to be of significant size. We expect management to provide additional commentary on the deal when they release Q3 earnings on November 15th. In the past, management has indicated the bike battery market is attractive and we believe the transaction would be a decent pick-up of complimentary IP and incremental customers.

Our $6.00 price target was is on a 10.0x multiple applied to our FY11 EPS estimate of $0.60. We will re-evaluate this target following the Q3 results and adjustment to our estimates. This multiple reflects a slight discount to the peer group, which trades at 10.5x.

2010-11-04Roth CapitalReiterationBuy$6.00
 

This morning, CRTP pre-announced Q3 results that are well below Roth/Consensus estimates. The company expects revenue of $30.5-32.5mm and income from continuing operations of $1.65-1.85mm (implies $0.07-$0.09 per share). Our/Consensus estimates call for revenue of $39.8mm/$38.7mm and EPS of $0.14/$0.15.

Q4 revenue guidance below Consensus; earnings likely to also fall short. Management also provided Q4 revenue guidance of $29.0-34.0mm. While it did not provide earnings guidance, we anticipate results could fall substantially short of Roth/Consensus EPS estimates of $0.11/$0.13.

Lead prices, delayed shipments, RMB appreciation. Management cited increased costs as the primary drivers for the weakness. Specifically, it highlighted increased lead prices (we estimate a >30% rise during Q3), delayed shipments on large contracts, and RMB appreciation (~2% increase during Q3; historically >50% of sales outside China, 68% during 2Q10). With such a rapid rise in lead prices, we believe it is difficult for CRTP to pass-through the increased costs to customers.

Our $6.00 price target was is on a 10.0x multiple applied to our FY11 EPS estimate of $0.60. We will re-evaluate this target following the Q3 results and adjustment to our estimates. This multiple reflects a slight discount to the peer group, which trades at 10.5x.

2010-10-25Rodman & RenshawReiterationOutperform$10.00
 

We visited CRTP's new facilities in Hengyang on Oct. 23, 2010. We were impressed with the magnitude of new construction that has taken place in this facility relative to our visit in January this year (3 buildings of 8,000 sq. mt. each plus 2 buildings of 6,000 sq. mt. each). We saw some equipment starting to be put in place in the new buildings. We believe one of the buildings could become operational by year end. Phase I of the Hengyang has been operational since the beginning of the year and was busy with production and shipping.

Near Term Catalysts: Outside of the availability of new capacity we believe M&A related activity could act as a near term catalyst for the stock. We believe the company is looking at opportunities in both the lead acid and lithium ion plays. We believe the recent appointment of Adam Sun should also be a positive from an IR perspective as this fills the communication gap that has existed for over a year and a half between management and the street.

Valuation: At current levels CRTP is trading at a P/E multiple of 6.9x to our 2010 earnings estimates. Comparable public entities in the energy storage and battery domain are trading in a range between 6.8x and 48.3x to their 2010 earnings expectations. In line with this, we are maintaining our price target of $10.00 on CRTP, which translates into P/E multiples of ~18x to our earnings estimates for 2010. We are comfortable assigning this multiple to CRTP as the company is playing in a growth industry and taking steps to further increase market share by expanding capacity. Historically battery manufacturers have traded within a range of 12x to 30x on a P/E basis. We maintain our Market Outperform rating.

2010-10-11Roth CapitalReiterationBuy$6.00
 

This morning, CRTP announced that it was awarded a new contract with American Power Conversion to supply VRLA batteries for uninterruptible power supply (UPS) applications. APC is a global leader in back-up power products and services for both consumer and industrial applications in over 160 countries worldwide. We believe this contract presents potential upside to our estimates. We currently model modest sales growth in the UPS segment, projecting ~5% y/y growth in 2011. With this announcement, we believe this growth rate will easily be over 10%. We note that UPS batteries typically generate slightly lower gross margins (~15%), which should partially offset the revenue upside.

2010-08-17Global HunterReiterationBuy$5.50
 

We maintained our ’10 and ’11 revenue estimates at $128MM (30% YoY) and $160MM (25% YoY), respectively. We lowered our ’10/’11 gross margin assumption from 19.5% to 17.3%/17.8% levels. We also slightly lowered operating expenses and increased the tax rate from 21% to 23%. Our EPS arrived at $0.40 and $0.53 from the prior $0.48 and $0.62 for ’10 and ’11, respectively. Despite a gross margin decline in Q2, we believe the demand for CRTP’s products remain strong. Its new technology and increased capacity should improve the company’s profitability in the long run. Shares are trading at 7.6x our ’10 EPS and 5.6x our ’11 EPS estimate, compared to an average forward P/E of 12x of its peer group. We maintain our Buy rating but lowered our price target from $6.50 to $5.50, which is 10x our ’11 EPS estimate.

2010-08-16Rodman & RenshawReiterationOutperform$10.00
 

We are currently maintaining our estimates for 3Q10 revenue of $42.3 MM and net income of $4.3 MM, with fully diluted EPS of $0.19. On a full year basis, we expect the company to deliver $143.2 MM in its top-line and $12.4 MM in bottom-line, with an EPS of $0.55. We are currently maintaining our estimates for 3Q10 revenue of $42.3 MM and net income of $4.3 MM, with fully diluted EPS of $0.19. On a full year basis, we expect the company to deliver $143.2 MM in its top-line and $12.4 MM in bottom-line, with an EPS of $0.55.

2010-08-16Roth CapitalReiterationBuy$6.00
2010-05-21Rodman & RenshawReiterationOutperform$10.00
 

During the conference call, the company released an update on its Hengyang facility construction. The new facility is expected to be completed during 2Q10 and gradually start equipment installation, which will increase the number of total production lines from 19 to 29. In regards to 2Q10, management on the call commented that revenue and net income would be roughly $30MM and $2.4MM, respectively, implying a top-line growth of 40% Y-o-Y and a bottom line growth of 31% Y-o-Y. We have adjusted our model accordingly, and now expecting a top line of $30.0MM and bottom line of $2.6MM, with EPS of $0.12 for 2Q10. For the full year, we are projecting revenue of $139.7MM and net income of $12.7MM, with EPS of $0.57.

2010-04-13Rodman & RenshawReiterationOutperform$10.00
 

At current levels CRTP is trading at a P/E multiple of ~8x to our 2010 earnings estimates. Comparable public entities in the energy storage and battery domain are trading in a range between 8x and 20x to their 2010 earnings expectations.

2010-03-11Rodman & RenshawReiterationOutperform$10.00
 

For FY2010, we are increasing our projections on CRTP's full year revenue and net income to $140MM and $11.8MM, growing by 40% and 62% Y-o-Y.

2009-11-18Rodman & RenshawReiterationOutperform$7.00
 

For FY2010, we are increasing our projections on CRTP's full year revenue and net income to $140MM and $11.8MM, growing by 40% and 62% Y-o-Y.

CRTP
Batteries
SCORE
-1
UNDER REVIEW
READ: Score Cards Explained
SAFETY/RISK SCORE
HIGH RISK
DETAILS: Safety/Risk Model for CRTP
Current Price:  n/a
F10k Day (2007-09-27): -100.00%$10.35
2009 Close: -100.00%$4.80
2010 Close: -100.00%$2.60
2011 Close: -100.00%$0.77
High (2012-02-20): -100.00%$0.90
Low (2012-03-23): -100.00%$0.25
Exchange: N/A
Market Capitalization: n/a
Total Shares: 21.83 mill
Float: n/a
Avg Volume: 57.50 k
Short Interest: 32.30 k
Short Ratio: n/a0.6 d
Last Quarter: 2010-09-30
Revenue (MRQ): 31.55 mill
Net Income (MRQ): 1.69 mill
Op. Cash Flow (MRQ): 4.78 mill
all financial data provided without warranty