NEW YORK (TheStreet) -- Shares of Jumei International Holdings (JMEI) - Get Jumei International Holding Ltd Sponsored ADR Class A Report are down by 10.30% to $10.02 in midday trading on Wednesday, as concerns regarding China's struggling economy weigh on U.S. traded China-based stocks today.
China is likely to post its worst quarter of economic growth since 2009 for the third quarter, according to a survey of analysts by CNNMoney.
Gross domestic product is forecast to have increased by 6.7% for the third quarter, below the 7% GDP growth rate China experienced for the first half of the year.
For the 2015 full year economists are expecting growth of 6.8%, lower than the Chinese government's 7% target, CNNMoney continued.
Additionally, data out of China showed that consumer price gains slowed last month when compared to the same period in 2014, Bloomberg reports. Producer prices fell by 5.9%, the 43rd consecutive month of declines.
Jumei International is an online retailer of beauty products to Chinese consumers and is based in Beijing.
Separately, TheStreet Ratings team rates JUMEI INTL HOLDING LTD -ADR as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate JUMEI INTL HOLDING LTD -ADR (JMEI) 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 generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, unimpressive growth in net income and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at the price performance of JMEI's shares over the past 12 months, there is not much good news to report: the stock is down 55.28%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- JUMEI INTL HOLDING LTD -ADR's earnings per share declined by 15.4% in the most recent quarter compared to the same quarter a year ago. For the next year, the market is expecting a contraction of 0.2% in earnings ($0.45 versus $0.45).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Internet & Catalog Retail industry average, but is greater than that of the S&P 500. The net income has decreased by 10.6% when compared to the same quarter one year ago, dropping from $19.18 million to $17.14 million.
- The gross profit margin for JUMEI INTL HOLDING LTD -ADR is currently lower than what is desirable, coming in at 29.97%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 5.56% is above that of the industry average.
- JMEI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JMEI has a quick ratio of 2.00, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: JMEI