HANGZHOU, China - Yunji Inc . (NASDAQ: NASDAQ:YJ), a prominent social e-commerce platform in China, has stated its intention to adjust the ratio of its American Depositary Shares (ADSs) to Class A ordinary shares from 1:100 to 1:400. This modification is slated to take effect around September 13, 2024, pending the approval of a post-effective amendment to the ADS Registration Statement on Form F-6.
For holders of Yunji's ADSs, this change equates to a one-for-four reverse ADS split, requiring them to exchange four existing ADSs for one new ADS once the adjustment is implemented. Deutsche Bank (ETR:DBKGn) Trust Company Americas, the depositary bank for Yunji's ADS program, will oversee this exchange. The company's ADSs will continue to trade on the Nasdaq Capital Market under the ticker "YJ".
Fractional new ADSs will not be issued; instead, any fractional entitlements will be aggregated, sold, and the net cash proceeds, after fees, taxes, and expenses, will be distributed to the applicable ADS holders. This change will not affect Yunji's underlying Class A ordinary shares, and no shares will be issued or cancelled as a result of the ADS Ratio adjustment.
Yunji anticipates that the ADS trading price may proportionally increase following the change, although it cannot assure that the post-change trading price will be equal to or exceed four times the pre-change price.
Yunji Inc. is recognized for its unique, membership-based model that leverages social interactions within the Chinese e-commerce market. The platform provides a variety of high-quality products at competitive prices and utilizes advanced technologies to enhance user experience and encourage member engagement.
This announcement is based on a press release statement and contains forward-looking statements. Actual results could vary due to numerous factors, including market conditions and regulatory changes.
In other recent news, Yunji Inc., a leading retail store operator based in China, announced changes to its American Depositary Shares (ADS) ratio, as disclosed in a recent 6-K SEC filing. The specifics of the new ratio and the rationale behind the change were not detailed.
In addition to this, Yunji reported its Q2 2024 financial results, revealing a decrease in total revenues from RMB167.1 million to RMB106 million year-over-year. Despite this, the company maintained a strong gross margin of 46.6% and reduced its net loss from RMB41.5 million to RMB11.9 million, due to cost optimization efforts across various departments.
In terms of strategic initiatives, Yunji is expanding into offline retail, enhancing its product portfolio, particularly in the health sector, and exploring new marketing strategies such as short video content creation. The company opened its first offline wellness store, focusing on traditional Chinese medicine, and its private label beauty brand, SUYE, continues to grow with a focus on anti-aging products.
These are the recent developments at Yunji Inc., which maintains a stable financial position with sufficient liquidity to cover obligations and no long-term debt.
InvestingPro Insights
As Yunji Inc. (NASDAQ: YJ) prepares for a significant adjustment to its ADS ratio, investors are closely monitoring the company's financial health and stock performance. Yunji's decision to modify its ADS ratio comes at a time when the company holds more cash than debt on its balance sheet, a position that could provide some stability in times of financial restructuring. This is a positive sign for investors considering the liquidity and financial resilience of the company.
Despite recent challenges, Yunji trades at a low Price / Book multiple of 0.05 as of the last twelve months ending Q2 2024, which could suggest that the stock is undervalued relative to the company's net asset value. This metric, coupled with the fact that the company's liquid assets exceed its short-term obligations, may be of interest to value-oriented investors. However, it's important to note that the company has not been profitable over the last twelve months, with a reported operating income margin of -19.35% and a return on assets of -6.83% for the same period.
Investors should also be aware that Yunji's stock has experienced significant price volatility, with a 38.36% decline in the 3-month price total return as of the end of 2024. This level of volatility may indicate higher risk, which is a crucial consideration for those looking to maintain or adjust their positions in the company.
For a more comprehensive analysis, investors can explore the additional 11 InvestingPro Tips available on InvestingPro, which provide deeper insights into Yunji's financial metrics and stock performance.
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