Boston, MA 03/07/2014 (wallstreetpr) – Zuoan Fashion Ltd ADR (NYSE:ZA) which is a casual wear company was the subject of rating from TheStreet, who upgraded it from a “Sale” to a Hold as the company continues to show significant growth in some of its key segments. Zuoan has in the recent past demonstrated strong financial position with its debt levels substantially dropping over the past quarter
Zuoan currently commands good valuation levels with good cash flows from its operation, its dividend yield currently lies between 1.86 and 2.18 with a market cap of $58.98 million. Some of the worrying weaknesses behind the Hold ratings include deteriorating net income accompanied as well as a disappointing return on equity ratio.
Highlights of the hold ratings
Zuoan debt to equity ratio is a t a low of 0.11, showing a lot has to be done by the management as it also lags the industry average. The company also commands an impressive Quick ratio of 4.64 which clearly demonstrates its ability to meet short term cash needs
Zuoan gross profit margins is essentially high and strong at 41.84% one of its key strengths at the moment. Despite the high gross margin at the moment, it is also worth noting that it has substantially declined when compared to the same quarter a year ago. The company’s net profit margin of 6.11% still lags the industry average.
Zuoan return on equity ratio is still below the industry average and that of the same quarter a year ago. The company has also significantly underperformed when compared to the industries average in terms of its change in net income. Zuoan net income has dropped from highs of $14.99 million reported in the same quarter a year ago to lows of $3.82 million a massive drop of 74.5%
The hold ratings seem not to be harm Zuoan Fashion Ltd ADR (NYSE:ZA) in the market, as its stock surged on Thursday trading session to highs of $2.12, a surge of 13.36%.
