Tanke Biosciences Corp

Stale (FY2012) China feed-additive micro-cap with decent operating margins but a net loss and serious governance/land-title red flags.

Strengths

• Strong operating margin 16% (79th pct) and ROIC 21.6% (92nd pct) with double-digit revenue growth
• Established distribution into China's top feed producers

Risks

• Net loss (ROE -1.3%) with earnings down 93%; VIE structure and missing Land Use Right Certificate create eviction/validity risk
• Data is over a decade stale and disclosure on competitors is limited

Notable findings

• Net lossNet loss (net margin -0.7%)
• Customer concentration~98% of revenue from one customer/distributor — Concentrations of Customers and Suppliers Approximately 98% of the Company’s revenue is generated from customers in mainland China