NEW YORK (TheStreet) -- Shares of Vipshop (VIPS) are surging, up 7.19% to $20.42 in midday trading Thursday, as the online discount retailer for brands partnered with The Economist Intelligence Unit of the Economist Group on a survey regarding the growing buying power of female consumers in Asia.
The study surveyed 5,500 women across major urban areas in Asian and found that 90% of Asian women buy clothing and accessories online, and 63% of those surveyed browse online shops daily.
Vipshop is a female-oriented vertical e-commerce retailer in China offering products including apparel and accessories, cosmetics, maternity and children's products, home goods and other lifestyle products at a discount to retail prices.
Separately, TheStreet Ratings team rates VIPSHOP HOLDINGS LTD -ADR as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate VIPSHOP HOLDINGS LTD -ADR (VIPS) 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, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VIPS's very impressive revenue growth greatly exceeded the industry average of 13.0%. Since the same quarter one year prior, revenues leaped by 130.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- VIPSHOP HOLDINGS LTD -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VIPSHOP HOLDINGS LTD -ADR turned its bottom line around by earning $0.09 versus -$0.02 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus $0.09).
- The gross profit margin for VIPSHOP HOLDINGS LTD -ADR is rather low; currently it is at 24.87%. Regardless of VIPS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.13% trails the industry average.
- Currently the debt-to-equity ratio of 1.77 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, VIPS maintains a poor quick ratio of 0.98, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: VIPS Ratings Report