Shineco Shares Soar on Strong Earnings
The Beijing-based company said its net income jumped to $4.6 million, or 21 cents per fully diluted share, in the past quarter, from $1.9 million, or 9 cents per share, for the same period last year.
Shares of Shineco Inc., a maker of herbal medicines and organic products, soared more than 45 percent in early morning trading today after the company announced a 137 percent surge in earnings for the third fiscal quarter ended March 31.
The Beijing-based company said its net income jumped to $4.6 million, or 21 cents per fully diluted share, in the past quarter, from $1.9 million, or 9 cents per share, for the same period last year. Revenue increased 68 percent to $13.3 million from $7.9 million in the year-ago period.
"Shineco's gross profit had increased by 102% to $5.26 million, our operating margin had increased by 8.4 percentage points to 29.4%," said Yuying Zhang, chairman and CEO of Shineco.
By far, Shineco's growth was fueled by a large increase in demand for the company's plant-based product made from the apocynum venetum shrub. Known as Luobuma in China, tea made from the plant's leaves is believed to lower blood pressure and treat depression, among other things, though clinical studies have not proven its efficacy. The company said sales from its Luoboma product line increased nearly 390 percent from the year-ago quarter to $3.9 million.
"The market's response to our Luobuma product line has been immensely positive, as reflected by an impressive sales increase of 388.6% to $5.48 million from $1.12 million from the same period of last year. We are pleased with the recognition from our clients, as we continue to innovate and expand in the future," said Zhang.
After opening in Friday morning trading at $2.30 per share, Shineco (Nasdaq: TYHT) climbed to $2.47 before trending down to end the day at $2.03 per share, up more than 19 percent from Thursday's closing price of $1.70.
Shares of Shineco soared at the open Friday morning, jumping more than 45 percent,
before ending the day up more than 19 percent. (Source: Thomson Reuters Eikon)