Momentum Stock Watch: Gsx Techedu Inc ADR (GSX)

Company Profile:

GSX Techedu Inc., a technology-driven education company, provides online K-12 after-school tutoring services in the People’s Republic of China. Its K-12 after-school tutoring courses cover various K-12 academic subjects, including mathematics, English, Chinese, physics, chemistry, biology, history, geography, and political science. The company also provides English courses for children in kindergarten; and courses that help children in grade one through grade seven. In addition, it offers foreign language courses comprising English, Japanese, and Korean, as well as English test preparation courses for students taking post-graduate entrance exams; and professional courses primarily for working adults preparing for professional qualification exams, such as teacher’s qualification, the Chartered Financial Analyst designation, securities qualification exams, and other exams. The company was formerly known as BaiJiaHuLian Group Holdings Limited and changed its name to GSX Techedu Inc. in January 2019. GSX Techedu Inc. was founded in 2014 and is headquartered in Beijing, the People’s Republic of China.

Recent News:

For the fourth quarter of 2019, the company reported net revenues increased 412.9% year-over-year to RMB935.0 million. Net income increased 658.7% year-over-year to RMB174.5 million, from RMB23.0 million in the same period of 2018.

On Jan. 31, 2020, it has closed the purchase of several plots of commercial real estate in the Economics Development Area of Zhengzhou, Henan Province, for a total consideration of RMB333.8 million.

 

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:

GSX’s strengths can be seen in its better growth, strong profitability and strong 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 44.60 with positive bias. We rate Gsx Techedu Inc ADR (GSX) a STRONG BUY.

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