BEIJING - Concord Medical Services Holdings Limited (NYSE:CCM), a China-based cancer care provider, has announced an upcoming change to the ratio of its American depositary shares (ADSs) to Class A ordinary shares. The adjustment will modify the current ratio from one ADS representing three Class A ordinary shares to one ADS for thirty Class A ordinary shares. This change is expected to take effect on July 30, 2024.
For shareholders, this change will function similarly to a one-for-ten reverse ADS split. ADS holders will need to exchange ten existing ADSs for one new ADS at the opening of business on the effective date of the change. JPMorgan Chase (NYSE:JPM) Bank, N.A., the depositary bank for Concord Medical's ADS program, will manage the exchange process.
No new fractional ADSs will be issued. Instead, any fractional shares will be aggregated, sold, and the resulting net cash proceeds, after fees, taxes, and expenses, will be distributed to the relevant ADS holders. The change in the ADS ratio will not affect Concord Medical's underlying Class A ordinary shares, with none being issued or cancelled as part of the adjustment.
The company anticipates that the ADS trading price will proportionally increase following the ratio change, although it cannot assure that the post-adjustment trading price will be equal to or greater than ten times the pre-change price.
Concord Medical operates a network of cancer hospitals and clinics across China, focusing on a full spectrum of oncology services, including diagnosis, treatment, education, and prevention. The company is known for utilizing advanced technology such as proton therapy systems in its care facilities.
This announcement includes forward-looking statements, which are subject to change and carry inherent uncertainties. Concord Medical does not commit to updating any forward-looking statement as required by law. This news is based on a press release statement from Concord Medical Services Holdings Limited.
InvestingPro Insights
In light of Concord Medical Services Holdings Limited's (NYSE:CCM) recent announcement regarding the change in their ADS ratio, a closer look at the company's financial health and stock performance is warranted. As per InvestingPro data, Concord Medical currently holds a market capitalization of 39.92M USD, indicating a relatively small size within the market.
The company's revenue for the last twelve months as of Q4 2023 stands at 75.71M USD, with a notable revenue growth of 13.84% during the same period. However, it is important to note that the company's gross profit margin is negative at -14.26%, reflecting challenges in maintaining profitability.
The stock's recent performance shows a significant 31.72% return over the last month and an even stronger 45.94% return over the last three months. Nevertheless, the one-week price total return as of a recent 2024 date indicates a sharp decline of -12.44%. This volatility is echoed in the InvestingPro Tips, which highlight the stock's tendency to trade with high price volatility and its frequent movement in the opposite direction of the market.
InvestingPro Tips also point out that Concord Medical operates with a significant debt burden, which may pose difficulties in making interest payments given the company's negative operating income margin of -86.15%. Moreover, the company's short-term obligations exceed its liquid assets, which could raise liquidity concerns for investors.
For investors seeking a comprehensive analysis, there are additional InvestingPro Tips available, providing deeper insights into Concord Medical's financial status and stock behavior. To explore these tips and make informed investment decisions, visit InvestingPro and consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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