China Double Edged Sword Clover Corporation Limited (ASX:CLV) Bioactive technology firm Clover Corporation (ASX CLV) delivered strong revenue and earnings growth in its recent FY13 results. Top line growth was up +15% YoY with the company recording its highest ever net profit result. However a concerning trend was the continued fall in gross margins in 2H13 to circa 33.2% due to changing sales mix, exchange rate and competitive pressures. We believe that the outlook for FY14 will be uncertain given the fallout from the Fonterra milk contamination scandal and potential structural changes within the domestic Chinese infant formula manufacturing sector. In the medium to longer term, the underlying demand dynamics for Clover’s products remain intact and the potentials of the medical foods vertical provides a company transformational development. Our new updated 8 page report provides an analysis of the FY13 result, FY14/15 outlook and changes to our valuation and recommendation. For a Free download of the 8 page report go to microequities.au/research/free-research-membership/
Posted on: Mon, 23 Sep 2013 04:15:49 +0000