NEW YORK (TheStreet) -- Fuwei Films (FFHL) - Get Report popped more than 15% to a high of $2.04 as of 1:22 p.m. on Monday. The company announced on Friday the identity of the previously unidentified bidder that had successfully reached an agreement to acquire 52.9% of the company's outstanding shares at approximately $2.40 a share.
The company revealed Shandong SNTON Optical Materials Technology as the successful bidder in the fifth public auction of Fuwei's outstanding shares on March 25. The Weifang State-owned Assets Operation Administration Company, a wholly-owned subsidiary of Weifang State-owned Asset Management and Supervision Committee, is the controlling shareholder in Fuwei Films and had sought to sell the 52.9% share.
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TheStreet Ratings team rates FUWEI FILMS HOLDINGS CO as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate FUWEI FILMS HOLDINGS CO (FFHL) a SELL. This is driven by several 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:
- FUWEI FILMS HOLDINGS CO 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, FUWEI FILMS HOLDINGS CO swung to a loss, reporting -$0.66 versus $0.25 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 Chemicals industry. The net income has significantly decreased by 58.0% when compared to the same quarter one year ago, falling from -$2.41 million to -$3.81 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Chemicals industry and the overall market, FUWEI FILMS HOLDINGS CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for FUWEI FILMS HOLDINGS CO is currently extremely low, coming in at 2.95%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -30.54% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $1.27 million or 66.08% 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: FFHL Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.