NEW YORK (TheStreet) -- Shares of Highpower International Inc. (HPJ) are surging, up 9.41% to $5.25 on heavy tradiing volume, as the Chinese firm that produces and sells rechargeable nickel-metal hydride (Ni-MH) batteries, lithium batteries and battery systems, completes delivery of its first trial order from Costco Wholesale (COST) for rechargeable batteries for solar lighting, according to Briefing.com.
The initial order is expected to be sold directly to customers from Costco.
TheStreet Ratings team rates HIGHPOWER INTERNATIONAL INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate HIGHPOWER INTERNATIONAL INC (HPJ) 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, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 19.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 105.24% to $9.31 million when compared to the same quarter last year. In addition, HIGHPOWER INTERNATIONAL INC has also vastly surpassed the industry average cash flow growth rate of -6.12%.
- Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, HPJ has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, HIGHPOWER INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: HPJ Ratings Report