Ludlow China Report: China BioPharma, Inc. (CBPC)

Ludlow China Bridging the Gap between China & the US Markets Home Page	China BioPharma, Ltd. OTC: CBPC	Stock Report Launch June 14, 2006 OTC Symbol: CBPC

Sector:	China/Biotech
Sub-Industry:	Vaccine Research
Fully Reporting:	Yes

Summary: The Company has recently repositioned itself to focus at opportunities in the fast growing bio-pharmaceutical, information, and media sectors in China.


Price at Coverage Launch:	$0.43	\|	52-Week Range:	$0.06-$0.55


Prepared by: Ludlow Capital Research

Business Summary

China Biopharma Inc. is a fast-growing biopharmaceutical company based in China. Through its operating subsidiaries, Zhejiang Tianyuan Biotech Co., Ltd. and Hainan CITIC Biopharmaceutical Development Co., Ltd., the Company develops and distributes human vaccine products throughout the world's most populated country of China. Products include human vaccines against influenza, hemorrhagic fever and Japanese Encephalitis. Leveraging its investment and ownership of local Chinese biopharmaceutical companies, and partnerships with international vaccine providers, China Biopharma is building a highly-competitive platform for growth in China as well as new markets, including the U.S. and Europe. For more information, visit its website at www.chinabiopharma.com.cn.

Quantitative Evaluations

Ludlow Capital Rating: B-

B-

B+

A-

A+

Volatility: High

Low

Average

High

Technical Rating: NEUTRAL

Relative Stock Strength: 34

1 Lowest

Highest 99

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LUDLOW CAPITAL COMMENTARY

Ludlow China Upgrades China BioPharma to B- Rating

NEW YORK--June 14, 2007--Ludlow China upgraded China BioPharma (OTC:CBPC), one of China's largest non-governmental human vaccine production companies, from a C to B- rating, based on 2007 revenue guidance.

COVERAGE SUMMARY

Ludlow China has upgraded CBPC from a C to B- rating based on guidance for 2007 issued by the company. On June 13, 2007, the company issued revenue guidance for fiscal year 2007 of between $10 million to $13 million, with projected positive net income. Based on a price to sales (P/S) ratio of just 3 times sales that would give CBPC a valuation of $30 to $39 million. With around 90 million shares outstanding, that would give CBPC a potential target of around $0.30 to $0.40 a share.

Risk Note: This projected formula is based on 90 million shares outstanding, and depending on future dilution these targets can change. The company currently has a convertible note outstanding, and thus has some issues to work through before any determined move upward. Another risk factor would be the company's inability to meet revenue targets going forward.

Ludlow China is recommending CBPC as a 'speculative high risk' equity.

INVESTMENT HIGHLIGHTS

Market Growth – the market in China for flu vaccinations has grown from 3.9 million doses in 2000 to 22.3 million doses in 2005, or 30% year over year.
Distribution Network – the company has the largest independent vaccine distribution network covering 268 cities in China.
Strategic Alliances – the company retains a close relationship with the Chinese Center of Disease Control (CDC), providing local CDC vaccinations, and providing their high-capacity production facility for any potential epidemics within China.
Product Pipeline – in addition to marketing vaccines for Influenza, Epidemic Hemorrhagic Fever, and Epidemic Japanese Encephalitis, the company is also conducting research such new products to cover allergies and avian bird flu.
Revenue Projection – management anticipates generating $10 to $13 million in annual revenues and positive net income for fiscal year 2007.
Management Experience – the company retains some of the top scientists within the human vaccine fields in China, and has had a number of years experience running a public company

* Download Investor Fact Sheet - http://chinabiopharma.net/corpdoc/doc/factsheet.pdf (pdf)

VACCINE DELIVERIES

On Nov. 13, 2006, CBPC announced that through its subsidiary, Hainan CITIC Biopharmaceutical Development Co., Ltd., it has completed the delivery of 1.5 Million doses of flu vaccine in China. Peter Wang, Chairman and CEO of China Biopharma, Inc. commented, "Now that we have successfully delivered our first batch of flu vaccines to local CDCs, insurance companies, hospitals, and other facilities, we believe we are on track to deliver a total of three million doses of vaccine by year-end 2006."

On Sept. 7, 2006, CBPC announced that Zhejiang Tianyuan Biotech, the Company's China subsidiary, has received an export letter of credit from the Government of Macedonia to ship its flu vaccine product to this Southeastern European country for distribution. The order represented the first exportation of the flu vaccine to Macedonia from China. Moreover, this marks the first exportation of a flu vaccine product by Zhejiang Tianyuan internationally.

AVIAN H5N1 RESEARCH

China BioPharma's main focus is on vaccines for highly virulant and contagious diseases such as Ebola, SARS, and Influenza. To that effect, CBPC will be a major player in creating and mass producing a vaccine for any potential Avian Bird Flu outbreak if the need should arise in China. The company specializes in vaccines for highly contagious diseases. On June 28, 2006, China BioPharma received a copy of the H5N1 virus, and has begun animal testing on a vaccine.

INFLUENZA SECTOR VALUATIONS

Although these are not all of the top vaccine research firms involved with Avian Bird Flu, we decided to pick these stocks as major small cap players within this sector. Investors are advised to check current SEC filings as some of these numbers may have changed over the running quarter.

	NVAX	AVII	VICL	GNBT	HEB	SVA	CBPC

Market Cap.	$186m	$154m	$194m	$207m	$100m	$107m	$6.2m
Price/Sales Ratio	46	264	18	764	105	7	5

* Sector ranked by market capitalization. Statistics last updated June 13, 2007.

ABOUT CHINA BIOPHARMA

China Biopharma Inc. is a fast-growing biopharmaceutical company based in China. Through its operating subsidiaries, Zhejiang Tianyuan Biotech Co., Ltd. and Hainan CITIC Biopharmaceutical Development Co., Ltd., the Company develops and distributes human vaccine products throughout the world's most populated country of China. Products include human vaccines against influenza, hemorrhagic fever and Japanese Encephalitis. Leveraging its investment and ownership of local Chinese biopharmaceutical companies, and partnerships with international vaccine providers, China Biopharma is building a highly-competitive platform for growth in China as well as new markets, including the U.S. and Europe. For more information, visit its website at www.chinabiopharma.com.cn.

MANAGEMENT EXPERIENCE

The appointment of Dr. Jean Shu, MD, MBA as the new CEO and head scientist of China BioPharma provides years of experience in vaccine and viral research. Dr. Shu headed China's division for Chiron Vaccines, one of the worlds largest viral research company's. Along with Dr. Shu CBPC has a number of top scientists in the field of viral research on their Board of Advisors.

Mr. Jean-Louis Chanas - former President of Aventis Pasteur International
Mr. John Lambert - former President of Chiron Vaccines
Prof. Dakui Yin - former Vice-Ministry of Health, former Chairman of the China Association of Preventable Medicine
Prof. Liming Li - Dean of College of Public Health of Peking University, former Director General of the China National Center for Disease Control
Mr. Kai Zhao - Academician of the China Academy of Engineering, former Director of Beijing Institute of Biological Products
Mr. Yongxin Yu - Academician of the China Academy of Engineering
Prof. and Ms. Xiexiu Wang - Member of the WHO (World Health Organization) Technical Advisory Group on Tuberculosis, Vice Chairman of the China Association of Preventive Medicine, Director of Tianjin Municipal Center for Disease Control and Prevention.

Key Stock Statistics
As of Sept 30, 2006

12 Month P/E	NA	\|	Yield	NiL
Shs. outstanding	86m		Shareholders	NA
Shs. restricted	UR		Market cap. (M)	$24m
Avg. daily vol. (K)	65k		Inst. holdings	0%
Book Value/Share (NAV)	UR		Beta	Nil

Value of $10,000 invested 1 year ago: $

Dividend Data

No dividends have been paid on the common stock.

Revenues/Earnings Data Fiscal year ending December 31

Revenues (millions $)
	2007	2006	2005	2004	2003	2002
1Q	$150k	UR	UR
2Q	$98k	UR	UR
3Q	--	UR	UR
4Q	--	UR	UR
Yr.	$10m (est)	$1.2m	UR

Earnings per Share ($)
	2007	2006	2005	2004	2003	2002
1Q	(0.01)	(0.00)	NA
2Q	(0.01)	UR	NA
3Q	--	UR	NA
4Q	--	UR	NA
Yr.	--	(0.05)	(0.03)

Source: Company Press Release, and filings with SEC.

MANAGEMENT TEAM

Jean-Denis SHU MD, MBA, CEO of China BioPharma (OTC:CBPC)

Highlights:

Witness and player of ten-year growth of the Chinese vaccine market with strong resources and network. Expertise in business start-ups and general management in Asia-Pacific region, and a proven rack-recorded successes in medical and marketing management in France and China. French citizen born in China, bi-cultural and tri-lingual (English, French and Chinese). Medical Specialist qualified in France plus an international MBA degree. President, Far East & North Pacific of Chiron Vaccines

Professional experiences:

Chiron Vaccines, Chiron, Beijing Representative Office, Beijing 100026, China

January 2003 – March 2006: President Far East & North Pacific

Major achievements:

- Built a regional representative office responsible for China, South Korea, Taiwan and Hong Kong
- Built and directed a team of 12 employees covering regulatory affairs, marketing promotion and commercial operations
- Increased regional turnover from 10 millions USD to 20 millions USD during two years, and could reach 30 millions USD in the third year if there was no supply shortage
- Transformed the products with the lowest price into the highest one on the regional markets
- Built business in China from zero: set up distributorship, launched two products and submitted three products for registration; able to brand the company and its products
- Developed a long-term strategy and country plan for China

ADVISORY BOARD MEMBER

Professor Xiexiu Wang, Member of Board of Advisors

Professor Xiexiu Wang, director general of TJCDC (Tianjin Center for Disease Control), graduated from Tianjin Medical University in 1968. And got the master degree from Capital Medical University in 1982. She was a visiting scholar in Columbia University in Canada from 1986 to 1987. And she studied in the TB(tuberculosis) Reference Labs of WHO in 1989. Prof. Xiexiu Wang is the senior consultant on TB in WHO, the vice-president of International TB and Pulmonary Disease Association, the deputy director of MOH experts Consultative Committee to TB. She is the executive manager of China Preventive Medicine Association, the member of standing committee of Tianjin Science Association, the vice-president of China Anti-TB Association, the president of Tianjin Anti-TB Association, etc. She is also the vice-chief editor of Journal of China Anti-TB & Tianjin Medicine. Due to her important contribution to the disease control and prevention, Prof Xie-xiu Wang has received numerous awards and medals in the past years. She was conferred the title of "TB control expert" by Tianjin Municipal government in 1991, and the next year, she achieved the government special subsidy from State Congress. She was conferred the title of " State Youth Expert with Special Contribution" in 1996 and awarded the Bai Qiu-En Prize in 2004. http://www.cdctj.com.cn/330_english/intro_zrjj

CURRENT 'FLU' INFLUENZA VACCINE

Influenza Virus Vaccine, Inactivated (Split)
- read more on their current Influenza vaccine

[Drug Name]	English Name: Influenza Virus Vaccine,inactivated(Split) Chinese Phonetics: Liu xing xing gan mao lie jie yi miao

[Main Components]	Influenza Virus Vaccine,Inactivated(Split); blood-clotting agent content: A ₁=12µg/0.5ml, A ₃=12µg/0.5ml, B =12µg/0.5ml, and appropriate quantities of aseptic.
[Property]:	Slight milk-white without foreign matters.
[Subjects]:	School or preschool children, elders, weak and chronic-disease patients; not allowed for the administration to children; be careful for administration to pregnant women.
[Administration and Dosage]	Conduct inoculate with the vaccine one month before the influenza-prevalent season, and some preventing effect can be achieved during the prevalent period of the influenza. The children between the age of 6 months and 36 months should be inoculated two time, 0.25 ml a time, with the interval of four weeks; children above the age of 36 months and adults can be inoculate only one time, 0. 5ml a time. Fully shake up the vaccine before the administration and inject it into the deltoid of the upper arm.
[Adverse Reactions]	Some adverse reactions occur in a small number of patients --Local Reactions: Red, swelling, pain, hard knots. --Whole-Body Reactions: Fever, dizziness, chill etc. No treatment needed for the above listed reactions, which will disappear within 48 hours
[Warning]	Patents with fever, acute diseases and cold. Patients with chronic diseases, which are acutely occurring. Patients allergic to eggs.
[Matters Needing to Pay Attention to]	1.Patients with low immune functions should seek doctors'advice before administration; 2.Administration through blood vessels is not allowed; 3.Patients allergic to any components of the vaccine should not use the vaccine. 4.Period of fever and acute infection.
[Administration for Women in Gestation and Lactation]
	According to Doctors' Advice
[Interaction Between Drugs]
	Using other vaccines before and after the inoculation with this vaccine will lower and even eliminate its effects.
[Specifications ¡¿	0.5ml/ampoule
[Shelf Life]	One Year
[Storage]	Stored in dark place at 2-8 centigrade degrees; transported in refrigerating
[Approval No.]
[Manufacturer]	Zhejiang Tianyuan Biopharmaceutical Co., Ltd

Legend: E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked. UR-Under Review.



US Office: 33 Wood Avenue South 7th Floor Iselin, NJ 08830 Telephone: - 732-632-9896 Email: ir@chinabiopharma.net	Pres & CEO: Dr. Shu CFO: Ya Li Auditor: Website: www.chinabiopharma.com.cn	Founded: Domicile: China Employees: 140 Analyst: Tom Bustamante


For important regulatory information, go to "Disclaimer"

All of the views expressed in this research report accurately reflect our quantitative research models regarding any and all of the subject securities or issuers. No part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither Ludlow China Ventures nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Ludlow China Ventures receives compensation from the issuer or an agent thereof for initiating coverage, and for distribution including licensed redistribution of this report, and/or for inclusion in other Ludlow China Ventures publications, generally in amounts up to U.S. $5,000 per year. Redistribution is prohibited without written permission. Disclaimer: This is NOT a solicitation to Buy or Sell any security, but rather is for research purposes only. Content contained herein includes facts, views, opinions and recommendations of individuals and organizations deemed of interest. Ludlow China Ventures does not guarantee the accuracy, completeness or timeliness of, or otherwise endorse these views, opinions or recommendations, or give investment advice. Ludlow China Ventures, its affiliates, or directors, may or may not hold a position in the above security from time to time, and investors are encourage to consider this as a possible conflict of interest when reviewing this information. In Compliance with SEC Rule 17B Ludlow Capital was compensated fifthly thousand restricted shares for the distribution of this research material, and should be considered a possible conflict of interest when reviewing this report and information. Safe Harbor Statements: This research report includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. (NOTE: Ludlow China Ventures is NOT a broker-dealer, and does not offer buy or sell recommendations. Ludlow Capital's reports are strictly independent investment opinions, and does not hold any positions in the companies we cover unless otherwise clearly stated in our report. Rather, we offer our subscribers a perspective on each investment from our years of experience in dealing with small and micro-cap companies. We update our investment opinions and commentaries throughout the year, and encourage any interested investors to subscribe to our yearly membership to receive regular updates on these companies.)
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