Oppenheimer Comments On Synutra Earnings Review

According Oppenheimer, Synutra International SYUT 4Q11 results showed SYUT's operations are on a recovery track: revenue of $79.3M (+79% qoq) was significantly higher than Street consensus of $58.4M and our estimate of $52.1M. Oppenheimer said that EPS of ($0.15) beat Street's ($0.17). Gross margin improved by 11% to 22%. “ASP improved by 56% qoq. Channel inventory turnover was 45 days in March compared with 120 days in August. We expect SYUT's fundamentals to improve further in FY12, driven by high volume, stable ASP and stringent cost control, and have adjusted our model accordingly. We now forecast FY12 revenue and EPS at $317.4M and $0.25.” Synutra International closed yesterday at $10.34.