Position from Reddit User stephan334 with consent. I think it's a brilliant play.
Molecular Data Inc. ($MKD - NASDAQ) is a leading technology-driven platform in China's chemical industry, connecting participants along the chemical value chain through integrated solutions. The Company delivers e-commerce solutions, financial solutions, warehousing and logistics solutions, and SaaS suite that are intended to solve pain points for participants in the traditional chemical industry. Built upon a comprehensive knowledge engine and artificial intelligence (AI) capabilities, the Company’s e-commerce solutions are mainly offered through its online platform, consisting of molbase.com, molbase.cn, Moku Data WeChat account, Chemical Community APP and other ancillary platforms.
Basically, $MKD deals with e-commerce solutions for the chemical industry, which is pretty big, since e-commerce really blew up in 2020.
As of recently, this stock got a price target of 9$ by ARGUS, keep in mind this is trading below 2$ right now. This means a 500% growth.
Now, why did i choose THIS company to do my first DD? Because i honestly believe in what this company aims to do, in its managment, and in the future of the chemical industry. I also believe in the price target from ARGUS.
(Nice Cup and handle pattern formed)
As of recently, there has been a change in their managment, as they added Mr. Steven Foo as the new Chief Financial Officer.
“Steven has an extensive finance background, and operating experience in key international markets. Coupled with his analyst and asset management background and his strategic transaction expertise, I believe Steven will help Molecular Data accelerate in its next phase of growth,” Dr. Chang.
Mr. Foo brings over 24 years of investment, financing experience as well as financial management and restructuring work experience in Asia. Previously, Mr. Foo served as a member of the board of directors and chief financial officer of SOS Health Rescue Services. Prior to that, Mr. Foo served as a member of the board of directors and chief financial officer of Hebron Technology. Mr. Foo is a Fellow Chartered Accountant and Certified Public Accountant (CPA). In addition to his experience in securities laws and regulations compliance, Mr. Foo has extensive leadership experience in strategy, financial management and capital markets.
„Dr. Zheng Wang has served as our chief executive officer since 2018 and our director since October 2019. Dr. Wang has more than 20 years’ experience in operation management. Prior to joining us, Dr. Wang served as the chief executive officer of XinQi Biotechnology Inc. from 2006 to 2012. From 2001 to 2006, he served as the supervisor of China Investment Group, a South Korean company. Dr. Wang received his bachelor’s degree, master’s degree and doctorate degree from Shanghai Second Medical University in 1991, 1998 and 2001, respectively.” – Taken from their site.
As you can see, as of Dec 2019 they had a debt of 13.29M and cash in hand of 8.28M, but do keep in mind, this was before the pandemic happened, and before everything changed. I expect their next financial report, which will be on 2nd of June, to show great improvement.
Market cap is at 242.43M with the share price being 1.87 as of market close 12 February 2021.
Ownership of shares:
I find this to be pretty important, as a lot of institutions and VC/PE firms are invested in this stock.
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in Molecular Data Inc.. Insiders have a US$28m stake in this US$104m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
With a 13% ownership, the general public have some degree of sway over Molecular Data. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private equity firms hold a 39% stake in Molecular Data. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
We can see that Private Companies own 3.4%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.” – Yahoo finance
Some Tehnical analysis I guess, besides the obvious cup and handle:
Taken from market screener
· Change in managment happened recently, effective since 1 December 2020, a new chief financial officer was hired.
· MKD Molecular Data recently got it's PT upgrade to $9 by Argus. Meaning a wapping 500% increase from the price it is at right now
· MOLBASE was awarded 'Most Top 30 Valuable Companies in China's Industrial EC Industry'
CCID Consulting, affiliated to the China Electronics Information Industry Development Research Institute ('CCID Research Institute'), released the '2020 China Industrial E-commerce Development and Investment Value Research' at the '2020 ICT Impact Summit China Software Conference'. It releases that MOLBASE was awarded 'Most Top 30 Valuable Companies for Investment in China's Industrial E-commerce Industry of Year 2020'.
Recently, CCID Consulting, affiliated to the China Electronics Information Industry Development Research Institute ('CCID Research Institute'), released the '2020 China Industrial E-commerce Development and Investment Value Research' at the '2020 ICT Impact Summit China Software Conference'. At the meeting, Dong Kai, vice president of CCID Consulting Co., Ltd. and executive director of CCID (Shanghai) Advanced Manufacturing Research Institute, released this report.
The report elaborated on the development background, development history, development trend of industrial e-commerce, 'industrial e-commerce + service' development model and analysis of the investment value of industrial e-commerce companies, and released the 'Most Top 30 Valuable Companies for Investment in China's Industrial E-commerce Industry of Year 2020'.
MOLBASE was listed with its world's leading professional chemical e-commerce integrated service platform.
TL;DR: Company in the chemical industry with a price target of 9$ given by ARGUS, a new chief financial officer, and big ownership from private institutions, looks primed to run.
I am NOT a financial advisor, just some guy on reddit who likes the company