NEW YORK (TheStreet) -- Shares of Sky-mobi Ltd (MOBI) are up 8.05% to $7.25 after it announced the sale of its 37.9% equity interest in Shanghai Fangcun Information Technology (Fangcun), a leading China-based mobile game developer, to Guangdong Alpha Animation and Culture Co.
The Company realized a capital gain of $9 million from this transaction.
Separately, TheStreet Ratings team rates SKY-MOBI LTD -ADR as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SKY-MOBI LTD -ADR (MOBI) a HOLD. The primary factors that have impacted our rating are mixed. some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MOBI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.79, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue fell significantly faster than the industry average of 7.5%. Since the same quarter one year prior, revenues fell by 26.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, SKY-MOBI LTD -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SKY-MOBI LTD -ADR is currently lower than what is desirable, coming in at 25.37%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 3.99% significantly trails the industry average.
- You can view the full analysis from the report here: MOBI Ratings Report