Usually, GEM stocks see volatility due to things like news or industry events. For traders who have been following our coverage closely on China Brilliant Global (8026.HK), you will notice how much the stock has gone up since our first coverage and we hope you had made some profit from this. China Brilliant Global definitely meets the criteria to be one of the top micro-cap stocks to watch as it has great trading volume, consistent trend for the past few months and a healthy balance sheet to top it off.
What’s Next For China Brilliant Global (8026.HK)？
On Friday, China Brilliant Global (8026.HK) was one of the top GEM stocks which made the news after a filing was published.The Company has entered into a non- binding memorandum of understanding with an independent third party in relation to the formation of a joint venture. The JV will engage in a banking business in Kazakhstan which is expected to commence in mid-2020. This news sent the stock to a high of HKD 0.82 today, before closing at HKD 0.79
China Brilliant Global (8026.HK) has grown at an impressive pace in 2019. The Group’s 3 operating business segments (Trading & Retailing of Jewellery, Money Lending and Trading and Distributing Pharmaceutical and Healthcare products) are among the hottest ‘booming’ sectors in the world’s second largest economy.
First and foremost, the Jewellery business had achieved a 121% increase in revenue for the quarter ended 30 June 2019. The increase in revenue from this operating segment was mainly due to the increase in wholesale of golden jewelry products in Mainland China. Analysts believe that the sales of golden jewelry products would only keep going up driven by surging gold prices.
The Group’s revenue for the three months ended 30 June 2019 showed an increase of approximately 21.6% compared to the corresponding period last year. The increase was mainly attributable to the increase in revenue from the Group’s Pharmaceutical business as the medicine distribution channel had grown to become even more comprehensive during the period under review.
Since going public in March 2000, the Group has been disposing of some of its less profitable businesses and has been focusing on expanding their currently profitable businesses. It is plausible that the Group is currently shaping its business strategies to play on the theme of the consumption-driven Chinese economy, by taking advantage of the increasing appetite in gold and high demand in pharmaceutical & healthcare products. These are the factors deemed to be the driving force behind the growth in the stock price recently.
We must also not forget that a robust capital structure is essential to any business. CBG currently adopts a prudent cash and financial management policy, in which it holds a healthy amount of cash and has not taken any loan from third parties. It is not without reason that analysts feel that this recent increase in stock price is merely the start for CBG.