Is BIMI International Medical a Buy Under $1?
Currently trading at less than $1, the shares of China-based BIMI International Medical’s (BIMI) have dipped 72.2% in price over the past year. So, given the company’s weak financials and...
Currently trading at less than $1, the shares of China-based BIMI International Medical’s (BIMI) have dipped 72.2% in price over the past year. So, given the company’s weak financials and poor profitability, will its stock be able to regain its momentum? Read more to find out.
Headquartered in China, BIMI International Medical Inc. (BIMI) offers medical equipment, pharmaceuticals, and other healthcare products to consumers and wholesalers. The company provides products under the Lijiantang Pharmacy brand name. In addition, it provides IT research and development services.
BIMI’s stock has tanked 53.5% in price over the past year and 24.3% over the past three months to close yesterday’s trading session at $0.78. Furthermore, it is currently trading 72.2% below its 52-week high of $2.81, which it hit on February 10, 2021.
Although the healthcare industry is thriving globally, with increased demand for healthcare products and services, BIMI has failed to generate profits in the trailing 12 months. Though the company has established a strong foothold in the healthcare market through strategic alliances and a broad range of product and service offerings, its disappointing financials and weak profitability could lead the stock to a downtrend in the near term.
Here’s what could influence BIMI’s performance in the upcoming months:
For the first quarter, ended March 31, 2021, BIMI’s operating expenses increased 172.6% year-over-year to $3.83 billion. The company’s operating loss grew 144.8% from the year-ago value to $3.24 billion, while its net loss surged 51.9% from the prior-year quarter to $3.33 billion. The company’s loss per share came in at $0.20 over this period. In addition, net cash used in operating activities increased 116.6% year-over-year to $1.73 billion.
BIMI’s trailing-12-month ROC and ROA are negative 7.2% and 12.9%, respectively. Its 20.9% gross profit margin is 39.2% lower than the 34.4% industry average. Furthermore, BIMI’s trailing-12-month cash from operations stood at negative $3.68 million compared to the $536.8 million industry average.
POWR Ratings reflect Bleak Prospects
BIMI has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. BIMI has a D for Quality. The company’s poor profitability justifies the Quality grade.
The stock also has a C grade for Momentum and Growth. It is currently trading below its 100-day and 200-day moving average of $0.95 and $1.32, respectively, which is consistent with its Momentum grade. In addition, the company’s poor financials in the last reported quarter are in sync with the Growth grade.
Of the 69 stocks in the D-rated China group, BIMI is ranked #53.
Beyond what I’ve stated above, we have rated BIMI for Sentiment, Stability, and Value. Get all BIMI ratings here.
BIMI’s shaky financials and poor profitability have raised investor concerns regarding the stock’s future price performance. Furthermore, the company’s negative profit margins are projected to deteriorate due to increasing operating expenses. Thus, we think the stock is best avoided now.
How Does BIMI International Medical Inc. (BIMI) Stack Up Against its Peers?
While BIMI has an overall POWR Rating of D, one might want to consider looking at its industry peers, FinVolution Group (FINV), LexinFintech Holdings Ltd. (LX), and China Biologics Product Holdings (CBPO) having an overall B (Buy) rating.
BIMI shares fell $0.00 (-0.13%) in premarket trading Tuesday. Year-to-date, BIMI has declined -53.29%, versus a 24.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.