Momentum Stock Watch: BEST Inc. (BEST)

Company Profile:

BEST Inc. operates as a smart supply chain service provider in the People’s Republic of China. Its proprietary technology platform enables its ecosystem participants to operate their businesses through various SaaS-based applications. The company applies its technologies to a range of applications, such as network and route optimization, swap bodies, sorting line automation, smart warehouses, and store management. It offers integrated services and solutions across the supply chain, including warehouse management, order fulfillment, express delivery, freight, and other services for multinational and corporate customers, as well as small and medium enterprises. The company was founded in 2007 and is headquartered in Hangzhou, the People’s Republic of China.

Recent News:

On Nov. 18, 2019, the Company’s stock was added to the MSCI China Index, a part of the MSCI Emerging Markets Index. BEST’s addition to the index was effective as of market close on November 26, 2019.

On Nov. 13, 2019, the board of directors of the Company has authorized a share repurchase program whereby BEST may repurchase up to US$100 million worth of its outstanding American depositary shares (“ADSs”) from time to time during the next 18 months.

For the Quarter Ended September 30, 2019, the company reported revenue was RMB8,745.3 million (US$1,223.5 million), an increase of 21.6% year-over-year (“YoY”). Gross Profit was RMB507.1 million (US$70.9 million), an increase of 30.0% YoY; and Gross Profit Margin was 5.8%, an increase of 0.4 percentage points YoY.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

BEST’s strengths can be seen in its strong solvency and robust efficiency compared with its peers. Its revenue has increased over recently several years. Technical indicators signal the bullish signs, as there is a bullish crossover in Stochastic oscillator, MACD is trying to cross back up and the RSI stands at 55.48 with positive bias. We rate BEST Inc. (BEST) a STRONG BUY.