Shineco Inc (NASDAQ:TYHT) lost 86% of its stock price in the last three years; blamed mainly on lower than expected results. Following the considerable selloff and hitting the bottom of $1.34 last week, investors are capitalizing on the buying opportunity.
Shineco produces, distributes, and sells health and well-being focused plant-based products under the Tenethealth and Tenet Bojian brands in China.
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Shineco stock currently trades around $2.13 per share. The company’s latest financial results added to traders sentiments. Its revenue of $14.13M in Q2 FY2017 increased 25.9%, compared to the prior year period.
Luobuma products and Chinese medicinal herbal products generated a year over year revenue growth of 327% and 2.8%, respectively.
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Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “We believe that our investment in our Apocynum Industrial Park and Institute of Chinese Apocynum Industrial Technology Research continues to strengthen the long-term outlook of Shineco as a positive long-term investment. In the short term, we have seen tremendous growth in our Luobuma product line and are pleased that we have grown to become a high margin business.”
Its investments in high margin businesses helped in improving the gross margin by 21.9% to $4.82 million in the latest quarter. Consequently, its net income enlarged 26.3% to $3.60 million from $2.85 million in past year period.
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The company continues to pursue growth opportunities. It recently announced an acquisition agreement with Western Xinjiang Tiansheng Agricultural Development Co., Ltd to expand its apocynum (Indian hemp) business.
The Stock Sets An Upward Tone
Investors have been cheering the company’s strong revenue growth, as well as substantial margin and earnings improvement. Its stock rallied more than 37% in Tuesday trading. Furthermore, Shineco expects to generate higher numbers in the second half of the year compared to the first half. Thus, Shineco shares are in a position to receive strong support from its financial numbers.
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