Gulf Resources Expands Salt Business with New Acquisitions Author: Investing.com

In a strategic move to expand its operations, Gulf Resources, Inc. (NASDAQ:GURE) has entered into multiple agreements to acquire significant salt deposits in China, according to its latest SEC filings. The transactions, which were completed during the week of June 26, 2024, include the purchase of land lease rights for a total area of ​​5,141,000 square meters of salt deposits, with transfer prices ranging from RMB 54.00 to RMB 55.70 per square meter.

On June 26, 2024, Gulf Resources subsidiary Shouguang Hengde Salt Industry Co. Ltd (“SHSI”) agreed to acquire 2,380,000 square meters from Shouguang Qingshuibo Farm Co., LTD for RMB 129,472,000. On the following day, SHSI secured additional agreements with four separate economic cooperatives to purchase crude salt deposits totaling 2,761,000 square meters, with a total transfer price of RMB 151,290,000.

The acquisition transactions, which are expected to close by June 28, 2044, assume that 80% of the payment will be made upon signing of the agreements, with the remaining 20% ​​in Gulf Resources common shares within three months of SHSI’s inspection and acceptance of the deposits.

In related news, Gulf Resources has received an extension from NASDAQ to regain compliance with its filing requirements. The company, which has delayed filing its 2023 and 2024 first-quarter annual and quarterly reports, must now file the outstanding reports by October 14, 2024 to avoid delisting.

The latest SEC filing also revealed that Gulf Resources is not in compliance with NASDAQ’s reporting requirements as of April 18, 2024. The company intends to resolve this issue by meeting the new NASDAQ deadline and thereby maintaining its listed status.

InvestingPro Insights

In light of Gulf Resources’ strategic acquisitions and ongoing efforts to regain NASDAQ compliance, a look at the company’s financial health and market performance provides valuable context. Gulf Resources currently has a market capitalization of $12.52 million and has more cash than debt on its balance sheet, which is a positive sign for investors concerned about the company’s financial stability. Additionally, the stock has been trading at a low price-to-book multiple of 0.04 for the trailing twelve months ending in Q3 2023, which could suggest that the stock is undervalued relative to its assets.

However, investors should note that Gulf Resources has not been profitable over the past twelve months, with a negative P/E ratio of -2.04, revised to -1.99 over the same period. Furthermore, the company’s gross profit margins are a poor 7.74%, indicating challenges in maintaining profitability. Despite a significant return of 27.49% over the past week, the stock has seen a significant decline over the past month, three months, and six months, down -36.99%, -23.78%, and -36.07%, respectively.

For those considering Gulf Resources as an investment opportunity, there are additional InvestingPro tips to consider, including the company’s high price volatility and lack of dividend payments to shareholders. For deeper analysis and more tips, investors can check out the full set of insights available at InvestingPro. Get access to this valuable resource with a special offer using the coupon code PRONEWS24 to get up to 10% discount on an annual Pro subscription and an annual or two-year Pro+ subscription and gain comprehensive knowledge about the investment potential of Gulf Resources.

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