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NEW YORK (TheStreet) -- Shares of ChinaNet Online Holdings (CNET) - Get ZW Data Action Technologies Inc Report were gaining 48.6% to $1.56 Monday after the Chinese advertising agency announced a new partnership with cloud print services company MediaFun Creative.

Under the new agreement, ChinaNet will use its experience with small and medium-sized businesses to help MediaFun expand its sales marketing to new cities through mobile and the Internet. The Taiwan-based MediaFun will share its print services in China under the agreement.

The two companies said they plan to share in profits and commissions under a joint venture agreement.

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"This cooperative agreement continues our ongoing efforts to expand our marketing and related value-added services for our clients," ChinaNet COO George Chu said in a statement. "We in turn look forward to utilizing our deep experience in franchising and the China market to help MediaFun expand its business opportunities."

TheStreet Ratings team rates CHINANET ONLINE HOLDINGS as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHINANET ONLINE HOLDINGS (CNET) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CHINANET ONLINE HOLDINGS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINANET ONLINE HOLDINGS swung to a loss, reporting -$0.01 versus $0.13 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 178.3% when compared to the same quarter one year ago, falling from $1.16 million to -$0.91 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Media industry and the overall market, CHINANET ONLINE HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINANET ONLINE HOLDINGS is rather low; currently it is at 17.16%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -7.51% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.01 million or 100.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: CNET Ratings Report

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