Will TuanChe ADR (USA Stocks:TC) be in financial trouble before March?

TC Stock

USD 0.59 0.018 3.16%

Macroaxis Story

TuanChe ADR is scheduled to announce its earnings tomorrow. TuanChe ADR Earnings Before Interest Taxes and Depreciation Amortization EBITDA are projected to increase significantly based on the last few years of reporting. The past year's Earnings Before Interest Taxes and Depreciation Amortization EBITDA were at 431.94 Million. The current year Earnings before Tax is expected to grow to about 376.3 M, whereas Average Equity is forecasted to decline to about 1.8 B. While some millenniums are indifferent towards communication services space, it makes sense to digest TuanChe ADR as a unique investment alternative. Let's discuss the possibilities of TuanChe ADR maintaining its debt level in March.

Published over a month ago

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Reviewed by Michael Smolkin

The entity reports 15.88 M of total liabilities with total debt to equity ratio (D/E) of 0.11, which may suggest TuanChe ADR is not taking enough advantage from financial leverage. The firm has a current ratio of 1.18, indicating that it may have difficulties to pay its debt commitments in time. Debt can assist TuanChe ADR until it has trouble settling it off, either with new capital or with free cash flow. So, TuanChe ADR's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like TuanChe ADR sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for TuanChe to invest in growth at high rates of return. When we think about TuanChe ADR's use of debt, we should always consider it together with cash and equity.

Will TuanChe ADR (USA Stocks:TC) be in financial trouble before March?

TuanChe ADR financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of TuanChe ADR, including all of TuanChe ADR's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of TuanChe ADR assets, the company is considered highly leveraged. Understanding the composition and structure of overall TuanChe ADR debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.

Please read more on our technical analysis page.

Watch out for price decline

Please consider monitoring TuanChe ADR on a daily basis if you are holding a position in it. TuanChe ADR is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as TuanChe ADR stock to be traded above the $1 level to remain listed. If TuanChe ADR stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

Understanding TuanChe Total Debt

TuanChe ADR liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. TuanChe ADR has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on TuanChe ADR balance sheet include debt obligations and money owed to different TuanChe ADR vendors, workers, and loan providers. Below is the chart of TuanChe main long-term debt accounts currently reported on its balance sheet.

You can use TuanChe ADR financial leverage analysis tool to get a better grip on understanding its financial position

How important is TuanChe ADR's Liquidity

TuanChe ADR financial leverage refers to using borrowed capital as a funding source to finance TuanChe ADR ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. TuanChe ADR financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between TuanChe ADR's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.

It is good to see analyst projects for TuanChe ADR, but it might be worth checking our own buy vs. sell analysis

Is TuanChe ADR valued correctly by the market?

TuanChe ADR generated the yearly revenue of 357.55 M. Annual Net Loss to common stockholders was (101.94 M) with gross profit of 272.26 M.

Asset Breakdown

2.1 B

Assets Non Current

627.5 M

Current Assets

	Total Assets	2.57 Billion
	Current Assets	627.53 Million
	Assets Non Current	2.1 Billion
	Goodwill	42.05 Million

Another small dip for TuanChe ADR

Latest skewness is at -4.32.

As of the 15th of February 2023, TuanChe ADR has the coefficient of variation of (518.42), and Risk Adjusted Performance of (0.18). In relation to fundamental indicators, the technical analysis model makes it possible for you to check existing technical drivers of TuanChe ADR, as well as the relationship between them. In other words, you can use this information to find out if the company will indeed mirror its model of past prices and volume data, or the prices will eventually revert. We were able to break down nineteen technical drivers for TuanChe ADR, which can be compared to its competition. Please validate TuanChe ADR variance, as well as the relationship between the value at risk and skewness to decide if TuanChe ADR is priced more or less accurately, providing market reflects its prevalent price of 0.71 per share. As TuanChe ADR is a penny stock we also advise to double-check its total risk alpha numbers.

The Bottom Line

Although some firms in the internet content & information industry are either recovering or due for a correction, TuanChe may not be as strong as the others in terms of longer-term growth potentials. While some shareholders may not share our view we believe it may be a good time to exit TuanChe as the risk-reward trade off is not appealing enough to hold a position. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to TuanChe ADR.

Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of TuanChe ADR. Please refer to our Terms of Use for any information regarding our disclosure principles.

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