3SBio's (SSRX) third quarter resuts were solid and in line with our expectations on an adjusted basis. Net revenues amounted to RMB68.2 million (US$10.0 million) in the third quarter 2008, compared with RMB56.1 million in the third quarter 2007, representing an increase of 21.6%.

The company's flagship product EPIAO is the number 1 brand in the EPO market. Second lead product TPIAO has gained rapid physician acceptance for thrombocytopenia and is making a meaningful contribution to the company s top line growth. The recent deal with US-based AMAG Pharmaceuticals will boost SSRX expansion into IV Iron market and sustain long term growth.

According to our model, 3SBio will enjoy a 38% compound annual growth rate (CAGR) in top line growth, while earnings per share will boast a 16% CAGR in the next four years. In the U.S., the Biotech industry average P/E ratio is over 30x, while 3SBio's P/E ratio is only 11.5 x. Both P/S and PEG ratio for 3SBio are also below the industry averages.

We maintain our Buy rating on 3SBio with a price target for the next 6 to 12 month is $10.

3S Bio Inc. is a fully integrated, China-based leading biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products primarily in China.