Why Is Yimutian Stock Gaining Tuesday?

Yimutian Inc. (NASDAQ:YMT) stock is gaining in Tuesday’s premarket session after the company disclosed an update on its stockholders’ equity and Nasdaq listing compliance.

Yimutian Says Equity Meets Nasdaq Requirement

In a September Form 6-K filing, Yimutian said it believes its stockholders’ equity is now at least $2.5 million, meeting the requirement under Nasdaq Listing Rule 5550(b)(1).

The company said it is awaiting formal confirmation from Nasdaq that it has regained compliance with the rule. The equity update follows three acquisition transactions completed in September.

Yimutian acquired control of Qingdao Xingongguan Holiday Hotel Co. for $5.8 million and purchased certain land, buildings and equipment from Zhaodong Guohe Animal Husbandry Co. for about $21.16 million.

The company also completed the first phase of its acquisition of a 33.33% stake in Qingdao Quanao Supply Chain Technology Co. for $25 million.

Yimutian paid for the transactions through the issuance of Class A ordinary shares, representing about 24.44 million ADSs in total.

Trading Volume Surges

Yimutian’s session volume has climbed to about 13.72 million shares, compared with its 100-day average volume of roughly 523,650 shares.

The company had a market capitalization of about $202.45 million based on the previous close.

As a micro-cap ADR, Yimutian can experience sharp price swings. Lower liquidity can amplify moves in either direction, especially when trading volume rises sharply.

What Does Yimutian Do?

Beijing-based Yimutian describes itself as an agricultural digital services company operating in China. The company’s business is focused on using digital technology to connect participants across the agricultural supply chain.

The recent acquisitions also show the company expanding its asset base beyond its core digital platform operations. The transactions include hotel assets, land and equipment, as well as an investment in a supply-chain technology business.

YMT Price Action: Yimutian shares were up 21.51% at $2.15 during premarket trading on Tuesday, according to Benzinga Pro data.

Photo via Shutterstock