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BEIJING - Quhuo Limited (NASDAQ:QH), a workforce operational solutions platform in China with a current market capitalization of $9.24 million, announced on Wednesday it will change its American Depositary Shares (ADS) ratio from one ADS representing ten Class A ordinary shares to one ADS representing 900 Class A ordinary shares. According to InvestingPro data, the company’s stock has experienced significant volatility, declining over 92% in the past six months.
The change, which effectively functions as a 1-for-90 reverse ADS split, is expected to take effect on August 25, 2025, pending regulatory approval. Quhuo will continue trading on the Nasdaq Global Market under the symbol "QH" but with a new CUSIP number. InvestingPro analysis reveals the stock is currently trading at just 0.14 times book value, suggesting potential undervaluation despite operational challenges. Subscribers can access 15 additional ProTips and comprehensive financial metrics through InvestingPro’s detailed research report.
According to the company’s press release statement, ADS holders will be required to surrender and exchange every 90 existing ADSs for one new ADS. Deutsche Bank Trust Company Americas, the depositary bank for Quhuo’s ADS program, will manage the exchange process.
No fractional ADSs will be issued during the exchange. Any aggregate fractions will be sold with net proceeds distributed to entitled ADS holders after deducting fees, taxes, and expenses.
The company noted that while the ADS trading price is expected to increase proportionally following the ratio change, it cannot guarantee the new trading price will equal or exceed 90 times the previous trading price.
Quhuo provides technology-enabled operational solutions to consumer service businesses in China, primarily in sectors with significant e-commerce exposure including food delivery, mobility services, housekeeping, and accommodation. The company maintains a current ratio of 1.4, though InvestingPro analysis flags concerns about cash burn rates and weak gross profit margins of 2.42%.
The company has filed a post-effective amendment to its ADS Registration Statement on Form F-6 with the U.S. Securities and Exchange Commission to reflect the ratio change.
In other recent news, Quhuo Limited announced a strategic partnership with NIU World to establish a chain brand incubation platform focused on fresh beef in China. The collaboration is designed to create a vertically integrated supply chain ecosystem that spans from slaughterhouses to end-user dining and retail channels. This move is part of Quhuo’s efforts to expand its operations and enhance its market presence. The company aims to leverage this partnership to streamline processes and improve efficiency across the beef supply chain. This development highlights Quhuo’s strategic initiatives to diversify its business operations. The announcement was made through a company press release, underscoring the importance of this partnership in Quhuo’s growth strategy. This partnership is expected to impact the company’s operations significantly, although specific financial details were not disclosed.
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