MeritValue

Tanke Biosciences Corp

TNBIdata completeness 100%4 fiscal years on file
The thesis, from the filings

Tanke Biosciences Corp earns about 17% on invested capital, comfortably above its ~9% cost of capital, but has diluted owners by 24% over 4 years — a real edge showing up in the numbers. The estimate methods put fair value between $0.92 and $4.42 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2009FY 2010FY 2011FY 2012
Revenue—$20.1M1$23.8M2$28.6M2
Net income$2.58M3$2.74M4−$3.14M5−$210,2475
Operating cash flow—$4.38M6$3.65M7−$1.18M7
Capital expenditure—$76,0718$701,0229$856,3619
Free cash flow (derived)—$4.31M6$2.95M7−$2.04M7
Total debt—$1.36M10$2.83M11$4.12M11
Cash & equivalents$1.82M12$2.22M13$7.7M13$6.17M13
Diluted shares—10.8M13.1M13.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$11.82
your share of equity
Profit it earned you last year
−$0.16
Free cash flow it threw off
−$1.53
Debt you’d be carrying
$3.09

10 shares is a claim on $11.82 of net worth that earned you −$0.16 and generated −$1.53 of cash last year, against $3.09 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
17% avg · 4y
FY09 —FY10 52%FY11 -8%FY12 7%

It earned about 17% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
+24% shares · 4y

Share count is up 24% over 4 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 203% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $0.92 and $4.42 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$4.42
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$2.95M
DCF · Growth Exit 5Y
$4.09
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$2.95M
Earnings Power Value
$0.92
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1.19M
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $4.09
The three cases
Bear0.0%$3.32
Base5.0%$4.09
Bull10.0%$5

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2010-12-31 · accession 0001193805-12-000689 (SalesRevenueNet)
  2. 10-K · period ending 2011-12-31 · accession 0001213900-13-001814 (SalesRevenueNet)
  3. 10-K · period ending 2009-12-31 · accession 0001193805-12-000689 (ProfitLoss)
  4. 10-K · period ending 2010-12-31 · accession 0001193805-12-000689 (NetIncomeLoss)
  5. 10-K · period ending 2011-12-31 · accession 0001213900-13-001814 (NetIncomeLoss)
  6. 10-K · period ending 2010-12-31 · accession 0001193805-12-000689 (NetCashProvidedByUsedInOperatingActivitiesContinuingOperations)
  7. 10-K · period ending 2011-12-31 · accession 0001213900-13-001814 (NetCashProvidedByUsedInOperatingActivitiesContinuingOperations)
  8. 10-K · period ending 2010-12-31 · accession 0001193805-12-000689 (PaymentsToAcquirePropertyPlantAndEquipment)
  9. 10-K · period ending 2011-12-31 · accession 0001213900-13-001814 (PaymentsToAcquirePropertyPlantAndEquipment)
  10. 10-K · period ending 2010-12-31 · accession 0001193805-12-000689 (LongTermDebtNoncurrent)
  11. 10-K · period ending 2011-12-31 · accession 0001213900-13-001814 (LongTermDebtNoncurrent)
  12. 10-K · period ending 2009-12-31 · accession 0001193805-12-000689 (CashAndCashEquivalentsAtCarryingValue)
  13. 10-K · period ending 2010-12-31 · accession 0001213900-13-001814 (CashAndCashEquivalentsAtCarryingValue)