SkyPeople Fruit Juice (NASDAQ: SPU) Starting to Rebound?

SkyPeople Fruit Juice (NASDAQ: SPU) was up over 10% on March 6, 2017, on unusually high trading volume. The company entered into an agreement with China Aigo O2O Technology, and it could boost the SkyPeople Fruit Juice’s earnings. The stock traded over 730K, while the three-month average daily trading volume was only 58K. Therefore, SPU traded over 12 times its average daily volume.

The stock has been underperforming the market, significantly. The markets are near all-time highs, and the S&P 500 TR was up 7.93% over the past three months, as of March 6, 2017. However, SPU was down nearly 29% over the past three months and down 14.33% over the past month. Take a look below at SPU’s recent performance.

SkyPeople Fruit Juice Performance

Source: TradingView

About SkyPeople Fruit Juice

SkyPeople Fruit Juice is a beverage company that produces and sells fruit-related beverage products in China. The company operates through its subsidiaries and six segments, including: Concentrated Apple Juice and Apple Aroma, Concentrated Kiwifruit Juice and Kiwifruit Puree, Concentrated Pear Juice, Fruit Juice Beverages, Fresh Fruits and Vegetables, and Others.

SPU sells its products directly to supermarkets, hotels, consumers and other websites. Moreover, it also sells through trade websites and indirectly sells through distributors and agents. That in mind, SkyPeople Fruit Juice is not only available in China. The company also exports its products to various parts of Asia, Europe, North America, Russia and the Middle East.

SkyPeople Enters into Agreement with China Aigo O2O Tech

On March 6, 2017, SkyPeople Fruit Juice announced that its wholly-owned subsidiary Hedetang Foods signed a one-year agreement with China Aigo O2O Technology, and consequently, the company joined the Aigo Integrity Alliance.

China Aigo O2O Technology’s Aigo Integrity Alliance is a “smart” Online to Offline (O2O) platform. Currently, the Aigo Network Technology’s most valued subsidiary is China Aigo O2O Technology. The Aigo Integrity Alliance heavily invests in building an O2O platform. The Alliance developed five unique, world-leading patented technologies in the mobile Internet space.

The Alliance assists multiple Chinese companies across various industries, in an attempt to for a win-win model, through the utilization of a reward system, micro-media communications and a resource sharing platform. Moreover, the Aigo Integrity Alliance also engages in preventing counterfeiting of products, potentially benefiting companies. Currently, there are over 6M registered users, and SkyPeople could expand into China’s over 1B consumer market.

SkyPeople’s agreement with China Aigo O2O technology could increase the beverage company’s revenues and earnings during the 2017 fiscal year.

This Wasn’t the Only “Good” News

On February 6, 2017, SkyPeople regained compliance with Nasdaq. Prior to this, investors were unsure of whether SPU would lose compliance with Nasdaq listing requirements, adding some volatility to the name.

According to SkyPeople CEO Hongke Xue, “We are pleased to be in compliance with Nasdaq’s listing requirements as we have filed all of our SEC reports by the date required and are now current in our financial reporting...We appreciate the support and confidence of our shareholders during this time where we fell behind in our reporting due to unforeseen circumstances.”

Xue also stated, “We view this as an exciting time for the company as our vision is to be a fully-integrated company in the agricultural and food products industry. We are focused upon employing our first-class plantation technologies, innovative fruit processing capabilities and healthy products R&D to vertically integrate our businesses and secure a steady supply of raw materials.”

SkyPeople Earnings Could Rise

SkyPeople Fruit Juice reported a net loss per diluted share of 10 cents for the quarter ended on Sept. 30, 2016. This was a significant decrease from its net loss of 2 cents per share for the previous year. Moreover, the company lost 28 cents per diluted share for the nine months ended on Sept. 30, 2016. However, it had an EPS of 12 cents over the same period in 2015.

With the new agreement, SkyPeople Fruit Juice could turn into a profitable company, again. The Aigo Integrity Alliance would allow SPU to reach over 6M more customers, and potentially a lot more within the coming year.

The Bottom Line

SkyPeople Fruit Juice announced some good news recently, and consequently, its stock could rebound. On March 6, 2017, SPU returned over 10%, and it could continue to rise of this bullish news.

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