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Lakeside Holding Ltd (NASDAQ:LSH), a Nevada-incorporated company specializing in the arrangement of transportation of freight and cargo, has announced the acquisition of Hupan Pharmaceutical (TADAWUL:2070) (Hubei) Co., Ltd., a Chinese pharmaceutical distribution and supply chain service provider. The deal was finalized on Monday (NASDAQ:MNDY), with the total consideration for the acquisition set at RMB4.0 million, equivalent to approximately $0.6 million.
The equity transfer agreement involves Lakeside's wholly-owned subsidiary, Sichuan Hupan Jincheng Enterprise Management Co., Ltd., which operates primarily in the pharmaceutical supply chain. The acquisition targets 100% of the equity interests in Hupan Pharmaceutical, which is based in Wuhan, China, and offers services including brand promotion and healthcare technology support.
Prior to the agreement, Hubei Haoyaoshi Zhenghe Pharmacy Chain Co., Ltd. held 90% of Hupan Pharmaceutical, while Hubei Huayao Pharmaceutical Co., Ltd. owned the remaining 10%. Both companies agreed to sell their stakes to Sichuan Hupan at the stipulated price.
Lakeside Holding is listed as an emerging growth company and, as such, may take advantage of reduced reporting requirements. The transaction is detailed in the English translation of the Equity Transfer Agreement, which is filed as an exhibit to the Current Report on Form 8-K, according to the announcement made today.
InvestingPro Insights
Lakeside Holding's recent acquisition of Hupan Pharmaceutical aligns with the company's growth strategy, as reflected in its impressive revenue growth. According to InvestingPro data, Lakeside's revenue grew by 42.28% over the last twelve months, reaching $18.32 million. This acquisition could further boost the company's top-line performance in the coming quarters.
Despite the positive revenue trend, InvestingPro Tips highlight that Lakeside Holding is not currently profitable, with a negative operating income of $0.45 million in the last twelve months. This suggests that the company is prioritizing growth and market expansion over immediate profitability, which is not uncommon for emerging growth companies.
The stock has shown significant volatility recently, with a 24.89% return over the last week, contrasting with a 30.67% decline over the past six months. This volatility, combined with the company's high Price/Book ratio of 32.59, indicates that investors should carefully consider the risk-reward profile of Lakeside Holding.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Lakeside Holding, providing deeper insights into the company's financial health and market position.
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