Vipshop is a Guangzhou-based online discount retailer for brands in China.
Equity markets in China rallied on Monday following comments by a senior central banker in the region saying the country's market correction is "almost over," China Securities Journal reported, according to CNBC.com
The Shanghai Composite index closed up by 3.3% today, having jumped passed 4% earlier in the day, hitting an intra-day high of 3,318.7. The Shenzhen Composite closed higher by 4.2%.
China's central bank also announced over the weekend that it is expanding a pilot program that allows banks to borrow money using a high quality credit asset as collateral, CNBC.com added.
Separately, TheStreet Ratings team rates VIPSHOP HOLDINGS LTD -ADR as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate VIPSHOP HOLDINGS LTD -ADR (VIPS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VIPS's very impressive revenue growth greatly exceeded the industry average of 33.8%. Since the same quarter one year prior, revenues leaped by 75.4%. 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 two years. We feel that this trend should continue. During the past fiscal year, VIPSHOP HOLDINGS LTD -ADR increased its bottom line by earning $0.23 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($0.58 versus $0.23).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 144.1% when compared to the same quarter one year prior, rising from $26.39 million to $64.40 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, VIPSHOP HOLDINGS LTD -ADR's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for VIPSHOP HOLDINGS LTD -ADR is rather low; currently it is at 24.96%. 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, VIPS's net profit margin of 4.42% compares favorably to the industry average.
- You can view the full analysis from the report here: VIPS