Asian Equities Traded in the US as American Depositary Receipts Decline

Asian equities traded in the US as American depositary receipts were moving sharply lower Tuesday morning, falling 1.36% to 2,049.72 on the S&P Asia 50 ADR Index.

From North Asia, the gainers were led by pet-focused platform Boqii and fintech company Pintec Technology , which climbed 7.2% and 4.4% respectively. They were followed by online game developer Gravity and mobile healthcare platform 111 , which rose 2% and 1.5% respectively.

The decliners from North Asia were led by music streaming service Tencent Music Entertainment Group and biotech firm Zai Lab , which lost 9% and 8.9% respectively. They were followed by consumer lending firm LexinFintech and biopharmaceutical company BeiGene , which dropped 8.1% and 7% respectively.

From South Asia, the gainers were led by tech conglomerate Sea , which shed 16%, followed by IT firms Sify Technologies and Infosys , which were down 2.3% and 0.3% respectively.

The decliners from South Asia were led by telecommunications operators Telekomunikasi Indonesia and PLDT , which fell 4.5% and 3% respectively. They were followed by pharmaceutical company Dr. Reddy's Laboratories , which was off 1.3%.

U.S. stocks traded mixed toward the end of trading, with the Nasdaq Composite falling more than 50 points on Monday.

The Dow traded up 0.76% to 44,324.99 while the NASDAQ fell 0.15% to 19,257.81. The S&P 500 also rose, gaining, 0.04% to 5,998.191.

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Leading and Lagging Sectors

Financials shares surged by 1.4% on Monday.

In trading on Monday, information technology shares fell by 1.3%.

Top Headline

Aramark reported better-than-expected fourth-quarter financial results and announced a $500 million share repurchase program. Also, the company approved a 11% increase to its quarterly dividend.

Revenue grew 5% year-over-year (Organic revenue: +7%) to $4.42 billion, missing the consensus of $4.46 billion. Adjusted EPS of 54 cents exceeded the consensus of 53 cents.

Aramark's Board of Directors approved an 11% increase in the quarterly dividend, raising it to 10.5 cents per share. The dividend will be payable on December 12, 2024, to stockholders of record as of December 2, 2024

Equities Trading UP

• CERo Therapeutics Holdings, Inc. shares shot up 122% to $0.1552 after the company announced the presentation of preclinical data demonstrating the capability of CER-1236 to kill ovarian cancer cells in preclinical models
• Shares of Canaan Inc. got a boost, surging 34% to $1.6915 after Bitcoin rose above $82,000.
• MARA Holdings, Inc. shares were also up, gaining 25% to $23.96 amid strength in Bitcoin.

Equities Trading DOWN

• 1847 Holdings LLC shares dropped 40% to $2.1600. 1847 Holdings signed a definitive agreement to acquire a cabinet, door & millwork manufacturer for $18.75 million.
• Shares of RAPT Therapeutics, Inc. were down 44% to $1.6250 after the company terminated its Zelnecirnon program following an FDA clinical hold due to a severe adverse event involving liver injury.
• Sapiens International Corporation N.V. was down, falling 26% to $29.25 after the company reported worse-than-expected third-quarter EPS and sales and lowered its FY24 revenue guidance.

Commodities

In commodity news, oil traded down 3.1% to $68.18 while gold traded down 2.8% at $2,619.40.

Silver traded down 2.6% to $30.620 on Monday, while copper fell 1.8% to $4.2270.

Euro zone

European shares closed higher today. The eurozone's STOXX 600 gained 1.13%, Germany's DAX gained 1.21% and France's CAC 40 gained 1.20%. Spain's IBEX 35 Index rose 0.40%, while London's FTSE 100 rose 0.65%.

The BNP Paribas Real Estate Construction PMI in Ireland rose to 49.4 in October versus 49.0 in September,

Asia Pacific Markets

Asian markets closed mostly higher on Monday, with Japan's Nikkei 225 gaining 0.08%, Hong Kong's Hang Seng Index falling 1.45%, China's Shanghai Composite Index gaining 0.51% and India's BSE Sensex gaining 0.01%.

China's annual inflation rate was 0.3% in October compared to September's reading of 0.4%, while producer prices declined by 2.9% year-over-year in October. China’s vehicle sales climbed by 7% year-over-year to 3.05 million units in October compared to a 1.7% decline in the prior month.

The gauge for Japan's service sector fell to 47.5 in October compared to a revised reading of 47.8 in the prior month, while Japan's current account surplus fell to JPY 1,717.1 billion in September from JPY 2,954.2 billion in the year-ago month.

Economics

No major economic reports are scheduled for released today.

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

U.S. stocks traded mixed midway through trading, with the Nasdaq Composite falling more than 50 points on Monday.

The Dow traded up 0.69% to 44,294.18 while the NASDAQ fell 0.36% to 19,217.22. The S&P 500 also fell, dropping, 0.04% to 5,993.15.

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Leading and Lagging Sectors

Financials shares surged by 1.5% on Monday.

In trading on Monday, information technology shares fell by 1.4%.

Top Headline

Shares of Monday.com Ltd fell around 16% on Monday after the company reported results for its third quarter.

The company reported fiscal third-quarter 2024 revenue growth of 33% Y/Y to $251.0 million, beating the analyst consensus estimate of $246.1 million. The project management software company’s adjusted EPS of 85 cents beat the analyst consensus estimate of 63 cents.

Monday.com raised 2024 revenue guidance to $964 million–$966 million (prior $956 million–$961 million) against the consensus of $960.2 million and an adjusted operating margin of 12%–13% (prior 10%-11%)

Equities Trading UP

• CERo Therapeutics Holdings, Inc. shares shot up 155% to $0.1770 after the company announced the presentation of preclinical data demonstrating the capability of CER-1236 to kill ovarian cancer cells in preclinical models
• Shares of Canaan Inc. got a boost, surging 35% to $1.7013 after Bitcoin rose above $82,000.
• MARA Holdings, Inc. shares were also up, gaining 25% to $24.06 amid strength in Bitcoin.

Equities Trading DOWN

• 1847 Holdings LLC shares dropped 38% to $2.2550. 1847 Holdings signed a definitive agreement to acquire a cabinet, door & millwork manufacturer for $18.75 million.
• Shares of RAPT Therapeutics, Inc. were down 45% to $1.5994 after the company terminated its Zelnecirnon program following an FDA clinical hold due to a severe adverse event involving liver injury.
• Sapiens International Corporation N.V. was down, falling 26% to $29.13 after the company reported worse-than-expected third-quarter EPS and sales and lowered its FY24 revenue guidance.

Commodities

In commodity news, oil traded down 3.2% to $68.10 while gold traded down 2.7% at $2,621.70.

Silver traded down 2.8% to $30.570 on Monday, while copper fell 1.3% to $4.2495.

Euro zone

European shares were higher today. The eurozone's STOXX 600 gained 1.14%, Germany's DAX gained 1.28% and France's CAC 40 gained 1.16%. Spain's IBEX 35 Index rose 0.42%, while London's FTSE 100 rose 0.61%.

The BNP Paribas Real Estate Construction PMI in Ireland rose to 49.4 in October versus 49.0 in September,

Asia Pacific Markets

Asian markets closed mostly higher on Monday, with Japan's Nikkei 225 gaining 0.08%, Hong Kong's Hang Seng Index falling 1.45%, China's Shanghai Composite Index gaining 0.51% and India's BSE Sensex gaining 0.01%.

China's annual inflation rate was 0.3% in October compared to September's reading of 0.4%, while producer prices declined by 2.9% year-over-year in October. China’s vehicle sales climbed by 7% year-over-year to 3.05 million units in October compared to a 1.7% decline in the prior month.

The gauge for Japan's service sector fell to 47.5 in October compared to a revised reading of 47.8 in the prior month, while Japan's current account surplus fell to JPY 1,717.1 billion in September from JPY 2,954.2 billion in the year-ago month.

Economics

No major economic reports are scheduled for released today.

Now Read This:

• Aramark, Live Nation Entertainment And 3 Stocks To Watch Heading Into Monday

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Asian equities traded in the US as American depositary receipts were surging higher Thursday morning, rising 2.20% to 2,127.67 on the S&P Asia 50 ADR Index.

From North Asia, the gainers were led by healthcare platform 111 and financial services company CNFinance , which climbed 9.9% and 7.7% respectively. They were followed by polysilicon manufacturer Daqo New Energy and internet and data services provider VNET Group , which advanced 7.6% and 6.8% respectively.

The decliners from North Asia were led by computer hardware maker Canaan and online educational platform 51Talk Online Education Group , which fell 4.4% and 2.4% respectively. They were followed by mobile app developer Cheetah Mobile and ecommerce fashion platform MOGU , which dropped 1.8% and 1.4% respectively.

From South Asia, the gainers were led by telecommunications operators Telekomunikasi Indonesia and PLDT , which rose 2.4 and 2.3% respectively. They were followed by IT firm Sify Technologies and tech conglomerate Sea , which were up 1.2% and 0.3% respectively.

The lone decliner from South Asia was Dr. Reddy's Laboratories , which was off 0.8%.

Key Takeaways:

• Dogness’ revenue fell to $14.8 million in its fiscal year through June, as it reported a second consecutive annual loss
• The pet product maker’s stock has soared since February, including a more than sevenfold gain since it raised $5 million through a private placement in May

By Doug Young

Pet care may be big business in China, but don’t tell that to the many companies trying to make a living by selling everything from collars to grooming brushes and water bowls to the country’s millions of dog and cat owners. Adding to the difficulties, Chinese consumers may be curbing their spending on such non-essential products in the current climate of economic uncertainty.

Western markets where pet ownership is already quite high could provide brighter prospects for some of these Chinese pet specialists, though those markets are not only more mature but also fiercely competitive.

Those realities are all howling out in the latest financial results from Dogness (International) Corp. , whose revenue continued its downward trajectory in its latest fiscal year after peaking in 2022. We’ll review the report in more detail shortly.

But first we should point out something else about Dogness, namely a huge gain in its stock this year. The shares are up by more than 10 times since February, much of that after the company made a $5 million private placement in May. The huge run-up has given the company, which has lost money in its last two fiscal years, a fat market value of $700 million.

Put differently, the company currently trades at a whopping price-to-sales (P/S) ratio of nearly 40, based on last year’s shrinking sales. By comparison, global peers Chewy and Wag! Group trade at far more sedate ratios of 1.04 and 0.33, respectively. That raises the question of what exactly is going on with Dogness’ stock and whether the current meteoric price is sustainable – topics we’ll explore later in this review.

But first we’ll look at Dogness’ latest results, which are hardly anything to bark about. Things looked far more promising when Dogness listed on the Nasdaq in 2017 as China’s economy was booming and people were more than happy to pamper their pets with the finest collars, doggie clothing and other accessories and services.

Spending on pet care in China was expected to grow 17% each year between 2019 and 2024, by which time it would be worth 449.5 billion yuan ($63 billion), according to third-party market data provided in the 2021 IPO prospectus for Boqii , a rival provider of pet care products. That prospectus noted that first-time pet owners made up 80% of the China market, with 22.8% of Chinese households owning a pet in 2019, suggesting big potential for growth.

Fast forward to the present, when Boqii’s market value has shrunk to just $2 million from hundreds of millions of dollars at its height, and the company was forced to leave the New York Stock Exchange’s main board last year and move to the small, thinly traded NYSE American.

Dogness doesn’t seem in danger of such a fate, at least not based on its current market value that is more than sufficient to maintain its Nasdaq listing. But things could change if the air comes out of its overinflated stock, which seems like a strong possibility at some point.

Sagging revenue at home and abroad

Dogness reported its revenue fell 15.6% to $14.8 million in its fiscal year through June from $17.6 million the previous year. That decline continues a two-year streak after the company’s revenue peaked in its 2022 fiscal year at $27 million.

While we’ve noted the big potential of the Chinese market, we should point out that Dogness actually makes about two-thirds of its money by selling its pet products overseas. That part of its business fell 10.6% in its latest fiscal year, while domestic sales tumbled by 24.4%.

“We continue to face challenges due to intense competition in the domestic market and the ongoing trade dispute between China and the United States, which are impacting and will likely continue impacting our domestic and export sales in the near future,” said CEO Chen Silong.

The company earns most of its money from traditional pet products, which account for about 60% of its revenue, and more high-tech products accounting for most of the rest, called “intelligent” products. Such intelligent products have emerged as the company’s big Achilles heel, with revenue from that category tumbling 41% in its latest fiscal year to $4.4 million. The declines for the category occurred both at home and abroad, suggesting that people are less willing to spend as lavishly on their pets as they once were.

Dogness did a good job controlling its costs, with the result that its net loss for the latest fiscal year narrowed to $6.1 million from $7.5 million the previous year. The company’s cash rose to $7 million at the end of June from $4.5 million a year earlier following the $5 million private placement in May, showing Dogness won’t be facing a cash crunch in the near future.

That brings us back to the question of what’s going on with the company’s stock. Dogness shares traded mostly down after their 2017 IPO, then briefly soared in 2021 during a wave of bullishness on overseas-traded Chinese stocks. But the shares crashed after that to below the $1 level, forcing Dogness to implement a 20-for-1 reverse share split a year ago.

The stock began to perk up around February. Then it really took off after the announcement of the private placement, which was priced at $2.50 per share, representing a discount of more than 50% to the price at that time. Since the announcement of the placement, the stock has jumped from about $6 to its latest close of $45.50.

All this suggests the private placement investors, who were unnamed in the announcement and now own 18% of the company, may be playing a role in the big stock run-up. We’ve also seen a number of other U.S.-listed Chinese companies become “meme stocks” similar to what happened with GameStop (GME.US), so it’s possible Dogness’ shares have simply become a play toy for similar speculative buyers.

The bottom line is that nothing can justify this kind of valuation and stock run-up for a company whose revenue is shrinking and that’s losing money. Accordingly, we wouldn’t be surprised to see a relatively large correction in the stock price in the next year, bringing this overinflated stock back down to earth.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Asian equities traded in the US as American depositary receipts opened the week higher Monday morning, rising 0.52% to 2,072.20 on the S&P Asia 50 ADR Index.

From North Asia, the gainers were led by used car ecommerce platform Uxin and consumer lending firm LexinFintech , which climbed 8.6% and 8.5% respectively. They were followed by pet-focused platform Boqii and mobile app developer Cheetah Mobile , which advanced 7.1% and 6.2% respectively.

The decliners from North Asia were led by automotive ecommerce platform Cango and financial services company CNFinance , which fell 11% and 6.7% respectively. They were followed by computer hardware maker Canaan and automotive ecommerce platform TuanChe , which dropped 5.6% and 5.2% respectively.

From South Asia, the gainers were led by telecommunications operator Telekomunikasi Indonesia and pharmaceutical company Dr. Reddy's Laboratories , which were up 1.4% and 0.4% respectively. They were followed by IT firm Infosys and tech conglomerate Sea , which were up 0.2% each.

The only decliner from South Asia was telecommunications operator PLDT , which was down 1.1%.