What’s going on?
The company in question is Sino-Global Shipping America Ltd. We’ll provide a few metrics:
- Even after more than quadrupling in two days, it’s market cap is still only $18M
- Revenue is $34.27M for the year
- They have $5.33M in cash and no debt
- They don’t generate cash-flow
Now, what is all the bruhaha about (notice that today the stock price actually was above $9 at one stage). It’s about a strategic cooperation agreement with COSCO Container Shipping Agency.
Well, that’s nice. COSCO is a big company, 398th on the 2011 Fortune Global 500 list with a revenue over $24B+. Apart from shipbuilding, repairing, and container manufacturing, their shipping and logistics services are big, owning and operating a fleet of over 800 ships so clearly Sino-Global could substantially benefit here.
Still, this is hardly an industry which generate bonanza margins and the explosion in the stock price seems a tad overdone to us, although it would have been better to short it in the $8-9 level it traded at today (July 21) before falling back to a mere $6.32 (see graph below, which self-updates)
