Nisun International enters rubber supply chain with $13.5 million deal

SHANGHAI - Nisun International Enterprise Development Group Co., Ltd. (NASDAQ: NISN), a provider of integrated supply chain solutions, has announced strategic partnerships with three companies, marking its entry into the rubber supply chain market. The agreements involve initial orders worth about $13.5 million, through which Nisun International will supply 6,484.8 tons of rubber products.

The partnerships with Shandong Hi-Speed Qingdao West Coast Port Co., Ltd., Shanneng (Qingdao) Smart Industrial Technology Co., Ltd., and Ningbo Weiduoduo New Material Technology Co., Ltd. aim to address the growing demand in China's rubber industry. This sector serves a wide range of applications, including industrial, transportation, agricultural, and healthcare fields.

Xin Liu, CEO of Nisun International, highlighted the strategic significance of this move, stating that the partnerships will enable the company to deliver high-quality rubber products and contribute to the industry's drive toward efficiency and scale. Liu also emphasized the collaboration with Shandong Hi-Speed Group, a Fortune Global 500 state-owned enterprise, as evidence of Nisun International's strong business capabilities.

This expansion into the rubber supply chain is part of Nisun International's broader strategy to diversify and enhance its supply chain services, with a focus on quality, sustainability, and operational excellence. The company's commitment to these values is expected to bolster consumer confidence and shareholder value.

Nisun International, through its subsidiaries, provides technology supply chain management solutions, technology asset routing, and digital transformation services for tech and financial institutions. The company continues to integrate industry and finance, aiming to support the industrial supply chain's upstream and downstream segments and assist with supply-side sub-sector reform.

This information is based on a press release statement from Nisun International. The forward-looking statements in the press release reflect the company's expectations for future growth and collaboration, although actual results may vary due to several factors, including market conditions and the company's ability to execute its business plans.

In other recent news, Nisun International Enterprise Development Group Co., Ltd reported a 52% surge in revenue for the first half of 2024, expecting to report approximately $192.5 million. The company also anticipates earnings per share for the same period to be around $2.61. Furthermore, Nisun International has launched a share repurchase program with the authorization to buy back up to $15 million of its outstanding Class A common shares over the next 12 months.

The company has also announced its entry into the traditional Chinese medicine (TCM) supply chain through a strategic cooperation agreement, expanding its sourcing to include more TCM ingredients. In addition, the company's gold trading business has achieved a significant milestone, generating approximately $240 million in cumulative revenue.

The company's principal shareholder, Mr. Bodang Liu, has increased his stake from 19.36% to 21.92%, acquiring an additional 102,700 shares. Nisun International has also regained compliance with Nasdaq's periodic filing requirements, resolving previous concerns regarding its listing on the exchange. Lastly, Nisun International has secured a procurement deal for over 50,000 tons of corn, marking a substantial expansion of its grain business. These are recent developments for Nisun International Enterprise Development Group Co., Ltd.

InvestingPro Insights

Nisun International's strategic move into the rubber supply chain market aligns with its impressive financial performance and growth trajectory. According to InvestingPro data, the company has shown remarkable revenue growth of 86.06% over the last twelve months as of Q2 2024, with quarterly revenue growth of 51.67% in Q2 2024. This robust growth underscores the potential impact of the new partnerships on Nisun's financial outlook.

Despite the company's strong growth, InvestingPro Tips reveal that Nisun is trading at a low Price / Book multiple of 0.18 and a low P/E ratio of 2.2. These metrics suggest that the stock may be undervalued relative to its financial performance and growth prospects. The low valuation multiples could present an opportunity for investors as the company expands into new markets like the rubber supply chain.

It's worth noting that Nisun has been profitable over the last twelve months, with a gross profit of $37.98 million. However, an InvestingPro Tip indicates that the company suffers from weak gross profit margins, which stood at 8.4% for the last twelve months as of Q2 2024. This could be an area for improvement as Nisun scales its operations in the rubber supply chain market.

For investors seeking more comprehensive analysis, InvestingPro offers 14 additional tips for Nisun International, providing deeper insights into the company's financial health and market position.

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