While Greenpro Capital’s (GRNQ) recent statement that it will establish a partnership to create a GEO-LEO integrated satellite system has boosted investor confidence in the stock, the company’s low-profit margin and hazardous investment approach may be cause for concern. Is it also worth acquiring GRNQ now, considering its present pricing, which is not backed by its dismal financials?
Greenpro Capital Corp. (GRNQ) is based in Hung Hom, Hong Kong, and provides investment planning, financial, and corporate services to small and medium-sized firms in Malaysia, Hong Kong, and China. GRNQ’s Angkasa-X and Silkwave Holdings announced a strategic agreement last week to construct the globe’s premier GEO-LEO integrated satellite system. While investors are hopeful about the partnership’s goal of developing a space technology environment in Malaysia and bringing in a new phase of the digital revolution in the ASEAN sector, its shares have dropped 13.1% in the last month and are down 62.9 percent year-to-date. GRNQ is presently trading for $8.17, which is down 81.7 percent from its 52-week high of about $4.15.
Although its targeted initiatives to increase internet connectivity through Angkasa-“LEO” X’s satellite network and accelerate its digital transformation journey may enhance its business portfolio, its poor profit margin may be a cause for concern. Furthermore, GRNQ’s current market value is out of step with its massive losses and mounting expenses. So, here’s what we believe will have an immediate impact on GRNQ’s performance:
GRNQ announced in May that it has invested in a 7,700-piece limited-edition NFT series depicting the 1957 Sputnik satellite deployment. The corporation spent $16 million for the series, which included one Ethereum token valued at $2,100 each. While GRNQ believes that focusing on blockchain investments will help it enhance profitability and create more shareholder value, NFT investments come with considerable risks. Massive volatility and uncertainty in the nascent NFT market may be cause for alarm. Furthermore, given GRNQ’s deteriorating financial condition, a highly speculative transaction could make shareholders even more concerned about the stock.
Although GRNQ’s overall revenues climbed 97.4% year over year to about $792,025 in the 2nd quarter of 2021, its operating expenses increased 38.3% to $1.18 million from the previous quarter. In addition, the firm reported a complete loss of $773,821, up 37.7 percent over the previous year’s figure. In addition, their loss from operations for this period was $489,089, compared to $538,689 the year before. The loss per share for GRNQ was $0.01. The company’s net loss climbed by 35.8% to $764,867 over the previous year.
GRNQ’s trailing-1-year asset turnover ratio of 0.15 percent is 24.1 percent lower than the industry average of 0.2 percent. In addition, its trailing-12-month highly leveraged EBITDA margin, free cash flow margin, and ROTC were all negative 297.3%, 113.2%, and 14%, respectively. In addition, its trailing-12-month revenue from operations is negative $2.03 million, compared to the $133.55 million market average. The ROE and ROA of GRNQ were also negative 81.5 percent and 39.2 percent, respectively.