Executive Summary

Q3 FY2018 delivered strong year-over-year growth: revenue $13.34M (+68.0% YoY), gross margin 39.4% (+670 bps YoY), operating income $3.92M (+135.0% YoY), EPS $0.21 (+135.2% YoY) .
Quarter-over-quarter, revenue fell to $13.34M from $14.13M (-5.6% q/q), but margins expanded (gross margin 39.4% vs. 34.1% in Q2) and EPS improved ($0.21 vs. $0.17), driven by Luobuma mix and operational discipline .
Luobuma product line was the key driver: sales rose 388.6% YoY to $5.48M, largely from new subsidiary Xinjiang Taihe; segment gross margin rose to 56.9% .
No formal guidance or earnings call transcript found; Wall Street consensus estimates via S&P Global were unavailable, so beats/misses versus estimates cannot be assessed .
Watch receivables growth and cash flow disclosure: accounts receivable rose to $24.86M by 3/31/18, and the release narrative “used” vs. cash flow statement “provided” for nine-month operating cash flow is inconsistent (cash flow statement shows +$5.34M provided) .

What Went Well and What Went Wrong

Luobuma acceleration: revenue +388.6% YoY to $5.48M with 56.9% gross margin; management cited new Xinjiang Taihe subsidiary and strong client response: “market’s response to our Luobuma product line has been immensely positive” .
Margin expansion: gross margin up 670 bps YoY to 39.4%, operating margin up 840 bps YoY to 29.4%, reflecting higher Luobuma mix and scale benefits .
Profitability strength: net income attributable $4.55M (+136.8% YoY) and EPS $0.21 (+135.2% YoY), with operating income +135.0% YoY, supported by gross profit growth and effective cost control in select areas .

Sequential revenue decline: revenue down from $14.13M in Q2 to $13.34M in Q3 (-5.6% q/q), indicating potential seasonality or normalization after a strong Q2 .
Operating expenses increased: G&A +51.5% YoY to $0.96M driven by new subsidiaries; total OpEx +43.6% YoY, partially offsetting gross profit gains .
Receivables and disclosure inconsistency: accounts receivable grew to $24.86M (from $14.48M at 6/30/17), and nine-month CFO is described as “used” in narrative but cash flow statement shows +$5.34M provided, raising questions on working capital quality and disclosure clarity .

Metric	Q3 2017	Q2 2018	Q3 2018
Revenue ($USD Millions)	$7.94	$14.13	$13.34
Gross Profit ($USD Millions)	$2.60	$4.82	$5.26
Gross Margin (%)	32.8%	34.1%	39.4%
Operating Income ($USD Millions)	$1.67	$3.24	$3.92
Operating Margin (%)	21.0%	22.9%	29.4%
Net Income Attributable ($USD Millions)	$1.92	$3.60	$4.55
EPS ($USD)	$0.09	$0.17	$0.21

Segment breakdown

Segment	Q3 2017 Revenue ($M)	Q3 2017 GM (%)	Q2 2018 Revenue ($M)	Q2 2018 GM (%)	Q3 2018 Revenue ($M)	Q3 2018 GM (%)
Luobuma Products	$1.12	49.2%	$3.89	51.7%	$5.48	56.9%
Chinese Medicinal Herbal Products	$3.05	24.7%	$3.66	24.6%	$3.30	22.0%
Other Agricultural Products	$3.77	34.4%	$6.58	29.0%	$4.56	31.0%
Total	$7.94	32.8%	$14.13	34.1%	$13.34	39.4%

KPIs and balance sheet highlights

KPI	Jun 30, 2017	Dec 31, 2017	Mar 31, 2018
Cash and Equivalents ($USD)	$23.15M	$29.35M	$28.43M
Accounts Receivable, Net ($USD)	$14.48M	$15.07M	$24.86M
Short-term Loans ($USD)	$2.66M	$1.20M	$2.48M
Total Stockholders’ Equity ($USD)	$62.17M	$70.01M	$77.20M
Nine-Month Cash From Operations ($USD)	n/a	$7.78M (six months)	$5.34M (nine months, cash flow statement)

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2018/Q4 onward	N/A	N/A	No formal guidance provided
Margins	FY2018/Q4 onward	N/A	N/A	No formal guidance provided
OpEx	FY2018/Q4 onward	N/A	N/A	No formal guidance provided
Tax Rate	FY2018/Q4 onward	N/A	N/A	No formal guidance provided
Segment Guidance	FY2018/Q4 onward	N/A	N/A	No formal guidance provided

No Q3 FY2018 earnings call transcript was found. The narrative below reflects press releases.

Topic	Previous Mentions (Q-2)	Current Period (Q3)	Trend
Luobuma product strategy	Highlighted strong growth (+327% YoY in Q2) and high margins; investment in Apocynum Industrial Park to strengthen outlook	Growth accelerated (+388.6% YoY) with Xinjiang Taihe contribution; segment margin 56.9%	Positive acceleration
Online sales promotions	Enhanced online promotions cited as revenue driver in Q2	Continued emphasis; contributed to segment revenue gains	Sustained focus
New subsidiaries/integration	Tiankunrunze, Xinjiang Taihe, Tianjin Tajite added; G&A increased	G&A +51.5% YoY; selling expenses up due to Tajite and promotions	Integration costs persisting
Other agricultural (yew trees)	Demand increased due to air purification awareness	Continued sales volume increase; segment margin 31.0%	Stable demand with margin variability
Capital/corporate actions	Equity line established; share issuance error corrected (March 2018)	No new corporate actions in Q3 release	Neutral

“We are delighted that our increased capital spending in 2017 has translated into increased profitability in 2018. Our business in Xinjiang factory has turned a profit, and our sales in Shandong have remained stable.” — Yuying Zhang, Chairman & CEO .
“Shineco's gross profit had increased by 102% to $5.26 million, our operating margin had increased by 8.4 percentage points to 29.4%, and our gross margin had increased by 6.7 percentage points to 39.4% compared to the same period of last year.” — Yuying Zhang .
“The market's response to our Luobuma product line has been immensely positive… sales increase of 388.6% to $5.48 million from $1.12 million.” — Yuying Zhang .

No Q3 FY2018 earnings call transcript was available; therefore, no Q&A themes or clarifications can be reported [Search attempt returned none].

We attempted to retrieve S&P Global consensus for Q3 FY2018 and Q2 FY2018 (EPS and revenue) but the data were unavailable due to system limits. As a result, we cannot assess beats/misses versus Street estimates for SISI this quarter [GetEstimates error].
Portfolio managers should assume limited sell-side coverage; if internal estimates exist, compare to the tables above to recalibrate expectations.

Mix shift to Luobuma is expanding margins: gross margin 39.4% (+530 bps q/q; +670 bps YoY) and operating margin 29.4%, supporting EPS growth despite q/q revenue decline .
Luobuma growth appears structural, aided by Xinjiang Taihe; monitor sustainability and capacity as segment margins are materially above corporate average .
Operating expenses are rising with new subsidiaries and promotions (G&A +51.5% YoY); discipline will be key to preserve margin gains as the model scales .
Working capital risk: accounts receivable rose to $24.86M by 3/31/18; collection and credit controls warrant close monitoring given rapid revenue growth .
Cash flow disclosure discrepancy: press release narrative vs. cash flow statement on nine-month CFO; rely on the cash flow statement (+$5.34M provided) and seek management clarification .
No formal guidance or Street consensus available; trading catalysts likely hinge on continued Luobuma momentum, margin trajectory, and any strategic updates (industrial park execution, distribution expansion) .
Near term: expect stock sensitivity to sequential revenue trends and margins; medium term: thesis depends on scaling high-margin Luobuma while integrating subsidiaries and managing OpEx and receivables .