The first Chinese supermarket chain listed on a major US stock exchange, iFresh Inc. (IFMK) has two wholesale facilities and eight retail supermarkets in New York, Massachusetts and Florida. The Long Island City, NY-based company has entered into several strategic partnerships over the past few months. And its stock has gained 24.1% over the past month to close yesterday’s trading session at $1.08. However, stocks have lost 20% in the past six months and 41.9% in the past nine months.
IFMK has not yet released its Form 10-K for the period ended March 31, 2021. Additionally, as noted in its Form 8-K dated October 27, 2021, the company is still preparing its financial statements for its fiscal year ended March 31, 2021. March. , 2021, for the quarter ended June 30, 2021 and for the quarter ended September 30, 2021.
Additionally, Nasdaq had advised the company in September 2021 that due to its continued non-compliance with Nasdaq’s annual meeting and filing requirements, its securities were subject to cancellation unless requested to be heard by a Nasdaq Hearing Panel. Thus, its near-term prospects appear uncertain.
Here is what could influence IFMK’s performance in the short term:
Strategic collaborations
On August 30, IFMK entered into an exclusive agency agreement with Bit Farm Inc., making IFMK the exclusive distributor of Bit Silica+, a fertilizer that promotes plant growth. The company also partnered with HungryPanda in April 2021 to jointly launch an online perishable food delivery service in New York.
Negative impact of Chinese technological repression
IFMK has entered into a product supply framework agreement with Alibaba Group Holding Limited (BABA) Tmall Global Group on November 10, 2021. This allows IFMK to sell American food and products to China through Tmall Global’s cross-border e-commerce platform.
However, BABA’s earnings for its last quarter dipped 81% amid the Chinese government’s crackdown on tech companies. The Chinese economy has also reached its slowest growth rate in one year in the third quarter, penalized by power cuts and wobbles in the real estate sector. Thus, IFMK’s expansion in China could be significantly affected.
Low profitability
In terms of gross profit margin over the last 12 months, IFMK’s 21.25% is 37.5% below the industry average of 33.99%. Similarly, the respective EBITDA and net income margins of 0.04% and 0.79% year-over-year are below the respective industry averages of 13.68% and 5.33%. Moreover, its 0.57% over 12 months ROTATION is 88.4% lower than the industry average of 4.89%.
POWR ratings don’t indicate enough advantage
IFMK has an overall C rating, which equates to a neutral in our POWR Rankings system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.
Our proprietary scoring system also rates each stock against eight distinct categories. IFMK has a C rating for quality, which is consistent with its lower profitability ratios than the industry.
The stock has a D rating for Momentum, which is in line with its 6.1% loss over the past three months and its 20% decline over the past six months.
IFMK also has a D rating for value, which is consistent with its 4,003.22x and 3.22x EV/EBITDA and P/B over 12 months, respectively, which are above the industry averages of 12.92x and 2 .93x.
IFMK is ranked No. 37 out of 40 stocks in the Grocery stores / big box retailers industry. As well, Click here to see also IFMK’s ratings for stability, sentiment and growth.
Conclusion
IFMK had reported strong sales of exotic fruits varieties like dragon fruit, lychee and longan in August 2021. However, the stock is currently trading 74.6% below its 52-week high of $4.25, which it hit on February 11 2021. In its most recent Form 8-K, the company said it was working to restate its consolidated financial statements for the three, six, and nine months ended June 30, 2020, September 30, 2020, and December 31, 2020, respectively. So we think it might be wise to wait before betting on the stock.
How does iFresh (IFMK) compare to its peers?
Although IFMK has an overall POWR rating of C, one might consider investing in the following stocks of grocery/large retailers with an A (Strong Buy) rating: Albertsons Companies, Inc. (AIT), Woolworths Holdings Limited (WLWHY) and Ingles Markets, Incorporated (IMKTA).
Shares of IFMK fell $0.06 (-5.56%) in premarket trading on Friday. Year-to-date, IFMK has gained 37.93%, compared to a 26.87% rise in the benchmark S&P 500 over the same period.
About the Author: Manisha Chatterjee
From an early age, Manisha was very interested in the stock market. She majored in economics in college and has a passion for writing, which led her to her career as a research analyst. Following…
