United Time Technology Co., Ltd. (UTME) Stock Declining After a Hefty Wednesday, Here’s the Reason

United Time Technology Co., Ltd. (UTME), a company that designs, develops, manufactures, and sells mobile phones, accessories, and related consumer electronics, has declined 9.44% in the premarket trading session. As a result, UTME stock is trading at $3.07 at the time of the writing. The decline could be attributed to the profit-taking factor after UTME closed Wednesday’s regular trading session on $3.39 after rocketing 47.39% during the day. The massive surge has come due to a buy signal by stock analysts which caused the investors to buy UTME stock in huge volumes. For the moment, let’s discuss some developments related to the stock.

UTME Agreement with Government of Jiangnan

In early October, UTME announced that on the 6th of October, the Government officials of Jiangnan District in Nanning City and United Time Technology Co. signed an agreement related to the establishment of a production line of smart telecom devices. Following the agreement, the UTime SZ agreed to establish manufacturing facilities to produce smart telecom devices in Nanning, the People’s Republic of China. In exchange for this investment, the government agreed to provide certain incentives to the company.

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FY 2021 Operational Results

In July, UTME released the operational results for the fiscal year 2021. The year ended on 31st March 2021. The company generated net sales of $37.5 million during the fiscal year. The gross profit for the 12 months was $2.76 million. The total operating expenses for the year were $4.97 million. The net loss suffered by the company during the fiscal year stood at $2.53 million (or $0.56 per share).

FY 2021 Financial Results

Alongside the operational results, UTME also released the financial results for the 12 months. The company had cash and cash equivalents of $1.36 million on the 31st of March. The total assets in possession of the company on 31st March were $26.41 million, while the total liabilities stood at $22.5 million. The shareholder’s equity on 31st of March was $3.8 million.

Future Outlook for UTME

The last three months have seen UTME stock decline by more than 30%. The decline has come because it is based in the Peoples Republic of China, and the harsh policies by Chinese regulatory authorities have resulted in the abysmal performance of a number of Chinese stocks, including UTME. Analysts however are hopeful that the rising portfolio of the company would have a positive impact on stock performance in months to come.