China BAK Battery Inc. (NASDAQ:CBAK) was not ready to go lower on Tuesday, but still ended up hitting a new 52-week low, followed by a rebound.Many traders took the rebound as a chance for quick upside profits. The increase in the volume suggests we will be seeing at least a modest price run before the sentiment is broken. The general stock price direction should remain negative or enter consolidation phase. The preceding strong downtrend is adding additional psychological and technical pressure.[BANNER]
Fundamentals point to what many investors could take for an undervalued indication. P/S and P/B ratios are lower than 1, at 0.45 and 0.53. Market cap of $91 million is well below the net tangible assets worth of $171 million. And on top of that, we have a new 52-week low in price.
However, the company deserves to trade low if you look at their performance. Top line has not been growing in the recent quarters and net losses were booked for the past two years. Positive cash flow is sustained through borrowings. Balance sheet looks depressing, considering they have “157.3 million in short-term bank loans maturing in less than one year, $11.7 million in long-term bank loans maturing within one year”. CBAK can only cover around $60 million with cash and cash-like liquidity assets.
