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"We rate CHINA NEW BORUN CORP -ADR (BORN) 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 solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and poor profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, BORN's share price has jumped by 64.70%, exceeding the performance of the broader market during that same time frame. 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.
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 4.6%. 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.
- CHINA NEW BORUN CORP -ADR's earnings per share declined by 18.8% in the most recent quarter compared to 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, CHINA NEW BORUN CORP -ADR reported lower earnings of $0.51 versus $1.16 in the prior year.
- The gross profit margin for CHINA NEW BORUN CORP -ADR is currently extremely low, coming in at 10.11%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.14% significantly trails the industry average.
- You can view the full analysis from the report here: BORN Ratings Report