By midmorning, shares had exploded 16.8% to $5.70. Trading volume of 2.3 million was more than six times its three-month daily average.
In the three months to December, the China-based recycling service posted net income of $4.21 million, a 169% year-over-year increase, and earnings per share of 7 cents compared to 3 cents a share in the year-ago quarter.
Quarterly revenue of $13.2 million was significantly higher than $219,000 in the year-ago quarter.
For the full year, net income of $15.63 million increased 359% year over year with earnings of 29 cents a share up 314%.
Total sales increased to $63.2 million, a 4971% year-on-year jump.
"We further strengthened our operations and increased operational efficiencies, while maintaining our fiscal discipline and cost controls. Currently, we have fifteen operating systems and a series of potential projects which will bring our company great growth in the future," said chairman and CEO Guohua Ku in a statement.
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TheStreet Ratings team rates CHINA RECYCLING ENERGY CORP as a Hold with a ratings score of C. The team has this to say about their recommendation:
"We rate CHINA RECYCLING ENERGY CORP (CREG) 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 robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CREG's very impressive revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues leaped by 432.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 366.66% and other important driving factors, this stock has surged by 358.71% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Services & Supplies industry and the overall market, CHINA RECYCLING ENERGY CORP's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$53.42 million or 384.25% 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: CREG Ratings Report