NEW YORK (TheStreet) -- Shares of ChinaNet Online Holdings (CNET) were gaining 12.9% to $2.37 Friday after the advertising agency announced its efforts to attract new small and medium-sized enterprises to Fujian province in China in conjunction with the Provincial Government's redevelopment plan.
ChinaNet said it plans to capitalize on the redevelopment plans by increasing its local presence and using its B2B/B2C online and marketing model to broaden investment channels and give opportunities to franchise brands looking to enter the Fuijian coast.
The Fujian Provincial Government estimates the service economy will reach 1 trillion RMB by 2015. Most of those new service industry brands use a franchise development model, according to ChinaNet.
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TheStreet Ratings team rates CHINANET ONLINE HOLDINGS as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHINANET ONLINE HOLDINGS (CNET) 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."