NEW YORK (TheStreet) -- Shares of Bitauto Holdings (BITA) - Get Report , which provides Internet content and marketing services for China's auto industry, plunged 14.71% to $76 in morning trading Monday after the China Association of Automobile Manufacturers (CAAM) reported a slowdown in Chinese auto sales.
The association said Monday that 2014 auto sales in China rose 6.9% to 23.49 million cars, a slowdown from the 13.9% surge in 2013.
CAAM deputy secretary Shi Jianhua said the lesser sales growth stemmed from "the economic downturn, sluggish growth in the commercial cars market, as well as the higher comparison base a year earlier," according to People's Daily."
Exclusive Report:Jim Cramer’s Best Stocks for 2015
More than 2.5 million shares had changed hands as of 11:08 a.m., compared to the daily average volume of 1,125,110.
Separately, TheStreet Ratings team rates BITAUTO HOLDINGS LTD -ADR as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BITAUTO HOLDINGS LTD -ADR (BITA) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and impressive record of earnings per share growth. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BITA's very impressive revenue growth greatly exceeded the industry average of 29.0%. Since the same quarter one year prior, revenues leaped by 62.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BITA 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. To add to this, BITA has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, BITAUTO HOLDINGS LTD -ADR's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for BITAUTO HOLDINGS LTD -ADR is currently very high, coming in at 80.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.44% significantly outperformed against the industry average.
- BITAUTO HOLDINGS LTD -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BITAUTO HOLDINGS LTD -ADR increased its bottom line by earning $0.95 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.77 versus $0.95).
- You can view the full analysis from the report here: BITA Ratings Report