NED Needs Time To Spark Sales Activities

Noah Education Holdings, Ltd. NED reported disappointing 4Q results due to its struggle to fix its ELP business distribution channel problems, Oppenheimer reports. EPS was down $0.32, below Oppenheimer's estimate of $0.03, thanks to significantly lower ELP revenue (-72% y/y), negative gross margins and higher SG&A expenses, offsetting growth in the emerging educational services business. Oppenheimer believes NED needs several quarters to rejuvenate sales activities, and thus stock is expected to remain range-bound in near-to-mid terms. FY2011 EPS is estimated at $0.09 by Oppenheimer. Oppenheimer maintains its Perform rating for Noah Education Holdings, Ltd. which closed yesterday at $1.91.