NEW YORK (TheStreet) -- Shares of China Jo-Jo Drugstores (CJJD) are up 18.77% to $3.10 today on heavy trading volume after it was reported that Internet sales of prescription drugs are expected to be legalized in China under new regulations set to become effective around January 1, 2015, according to the Chinese-language Securities Times.
China Jo-Jo Drugstores, a retailer and distributor of pharmaceutical and other healthcare products in China, also operates through its subsidiary Quannuo Technology, which allows them to engage in online retail pharmaceutical sales throughout the country.
The company has established payment methods with banks and online intermediaries such as Alipay, and are cooperating with business-to-consumer online vendors such as Taobao.
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Online sales accounted for approximately 7.5% of the company's retail revenue, and 3.4% of its total revenue, for fiscal 2013, according to Reuters.
About 3.84 million shares of China Jo-Jo Drugstores changed hands by 11:13 a.m. in New York, compared to the average of 79,899 shares.
Separately, TheStreet Ratings team rates CHINA JO-JO DRUGSTORES INC as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHINA JO-JO DRUGSTORES INC (CJJD) a SELL. This is based on some significant below-par investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food & Staples Retailing industry and the overall market, CHINA JO-JO DRUGSTORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CHINA JO-JO DRUGSTORES INC is rather low; currently it is at 16.78%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.20% trails that of the industry average.
- CJJD's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CJJD's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.60 is low and demonstrates weak liquidity.
- CHINA JO-JO DRUGSTORES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CHINA JO-JO DRUGSTORES INC reported poor results of -$1.81 versus -$1.05 in the prior year.
- Net operating cash flow has increased to $3.65 million or 10.18% when compared to the same quarter last year. Despite an increase in cash flow, CHINA JO-JO DRUGSTORES INC's cash flow growth rate is still lower than the industry average growth rate of 53.70%.
- You can view the full analysis from the report here: CJJD Ratings Report