© 1997, 2007

Sinovac's Material Improvement

Investor Contributed Research, 2.13.2007, published by Financial Trader Research©

Technical Commentary

Although our analysis is focused primarily on fundamentals, technically, Sinovac’s chart pattern suggests that the decline in its shares, which began in October 2005, may be over and that a sustainable trend reversal might now be underway. As shown in the chart below, recently Sinovac’s stock price crossed and closed above a downward trend line that goes all the way back to its October 2005 high of $7.92. Typically, such action has a strong tendency to be bullish.

We believe that Sinovac’s improving fundamentals driven by its continued strong growth and high gross margins will attract the interest of both value and growth investors. At its current price, Sinovac is at the low end of its three year trading range and appears ripe for accumulation.

Sinovac Financial Appendix

2007 Revenue & Earnings Forecast

	estimated		estimated		estimated
	2007		2007		2007
	1st Half	%	2nd Half	%	Full Year	%
Revenue	7,800	100.0%	17,500	100.0%	25,300	100.0%
COGS	1,560	20.0%	3,500	20.0%	5,060	20.0%
Gross Profit	6,240	80.0%	14,000	80.0%	20,240	80.0%
Total Operating Expenses	5,057	64.8%	6,870	39.3%	11,927	47.1%
Operating Income	1,183	15.2%	7,130	40.7%	8,313	32.9%
Net Income for the Year	875	11.2%	5,055	28.9%	5,930	23.4%
Earnings per share	0.02		0.13		0.15

2006 Revenue & Earnings Forecast

			estimated		estimated
	2006		2006		2006
	1st Half	%	2nd Half	%	Full Year	%
Revenue	4,677	100.0%	10,733	100.0%	15,410	100.0%
COGS	940	20.1%	2,147	20.0%	3,086	20.0%
Gross Profit	3,737	79.9%	8,586	80.0%	12,324	80.0%
Total Operating Expenses	4,397	94.0%	5,496	51.2%	9,893	64.2%
Operating Income	(660)	-14.1%	3,090	28.8%	2,430	15.8%
Net Income for the Year	(970)	-20.7%	2,400	22.4%	1,430	9.3%
Earnings per share	(0.03)		0.06		0.04

2004--2007 Revenue & Earnings

	2004		2005		EST 2006		EST 2007
	Full Year	%	Full Year	%	Full Year	%	Full Year	%
Revenue	6,454	100.0%	8,608	100.0%	15,410	100.0%	25,300	100.0%
COGS	1,938	30.0%	2,346	27.3%	3,086	20.0%	5,060	20.0%
Gross Profit	4,516	70.0%	6,262	72.7%	12,324	80.0%	20,240	80.0%
Total Operating Expenses	9,462	146.6%	11,299	131.3%	9,893	64.2%	11,927	47.1%
Operating Income	(4,946)	-76.6%	(5,037)	-58.5%	2,430	15.8%	8,313	32.9%
Net Income for the Year	(4,667)	-72.3%	(5,111)	-59.4%	1,430	9.3%	5,930	23.4%
Earnings per share	(0.14)		(0.14)		0.04		0.15

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