Puxin Ltd. (NEW), a company that together with its subsidiaries provides K-12 and study-abroad tutoring services in China, has soared 49.21% in the premarket trading session. As a result, NEW stock was trading at $0.68 when last checked. Insider trading appears to be the apparent reason for this increase. On Tuesday, the NEW stock closed the day at $0.45 after plummeting 23.76% during regular trading hours.
NEW received notice from NYSE
On 19th August, NEW announced to have received a notice from NYSE, notifying the company of its below compliance criteria in connection with the performance of the trading price of NEW ADS’s. The notice was dated 18th August 2021. Under section 802.01C of the NYSE listed company manual, a company would be considered to be below compliance criteria if the average closing price of the company’s security is less than $1 over a consecutive 30 day period of trading. After the company receipt of notification, it has to bring back the share and average price over $1 within six month period following the receipt of the notification. The notice would have no immediate effect on the listing of company ADS’s. These would continue to be listed and traded on NYSE during the period subjected to compliance with other requirements.
Q1 2021 financial highlights
On 24th May, Puxin reported the financial results for the first quarter of fiscal 2021 which ended on 31st March 2021. The NEW had cash and cash equivalents of $42.59 million on 31st March. The company had total assets of $731.66 million and total liabilities of $660.96 million. The company generated total net revenue of $104.82 million during the quarter. The gross profit for the period stood at $46.05 million. The total operating expenses for the quarter were $45.06 million. The operating income for the three month period was $996,000. The net income for three month period was $5.71 million. Commenting on the results, MrPeng Wang, Chief Financial Officer of Puxin said that the company is confident to improve its profitability in the long run.
What’s ahead for NEW?
During the last three months, NEW stock has declined by more than 66%, the reason for the harsh implementation of policies by the Chinese regulating bodies. Despite its strong quarterly and annual performance, the analysts believe that the policies by the Chinese government could prove to cause troubles for the company in near future.