Gulf Resources Receives Government Notice to Temporarily Close Bromine Facilities in Shouguang
December 23, 2023
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Gulf Resources ($NASDAQ:GURE) Inc. is a chemical manufacturer and distributor that specializes in bromine and crude salt production. The company is listed on the NASDAQ and is based in Shouguang, China. Recently, the company has been served a notice from the local government to temporarily close their bromine facilities in Shouguang. The closure of these facilities will put the production of bromine on hold, leading to a decrease in Gulf Resources’ revenues. Furthermore, it could potentially lead to a decrease in share prices, depending on how long the closure lasts. Gulf Resources is taking proactive steps to ensure compliance with the government’s notice. The company will be working with the local government to discuss the issue and come up with a plan for reopening the facilities. In the meantime, Gulf Resources will be redirecting its resources towards other projects to ensure that it continues to be profitable. The temporary closure of Gulf Resources’ bromine facilities in Shouguang is likely to have an impact on its business operations.
However, the company is doing its best to ensure that all necessary steps are taken to comply with government regulations and to minimize any potential losses.
Price History
On Friday, Gulf Resources, Inc. announced that its subsidiary, Shouguang Yuxin Chemical Co., Ltd., received a notice from the Shouguang Environmental Protection Bureau, ordering it to temporarily close its bromine facilities in Shouguang, Shandong province, effective immediately. This news came shortly after the company’s stock opened at $1.4 and closed at the same price, up by 3.6% from the previous closing price of $1.4. This marked the second consecutive day of gains for the stock, following a 1.4% rise on Thursday.
Gulf Resources is expected to appeal the order and issue an official statement to shareholders soon. In the meantime, investors are watching closely to see how the situation develops. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Gulf Resources. More…
| Total Revenues | Net Income | Net Margin |
| 41.76 | -5.71 | -16.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Gulf Resources. More…
| Operations | Investing | Financing |
| 23.92 | -19.54 | -0.25 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Gulf Resources. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 278.89 | 18.17 | 24.99 |
Key Ratios Snapshot
Some of the financial key ratios for Gulf Resources are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 36.6% | 13.3% | -10.2% |
| FCF Margin | ROE | ROA |
| 10.5% | -1.0% | -1.0% |
Analysis
At GoodWhale, we have conducted an analysis of GULF RESOURCES‘s fundamentals. Our Star Chart has classified GULF RESOURCES as an ‘elephant’, a type of company which is rich in assets after deducting off liabilities. We believe that such a company will be of great interest to value investors who are looking for long-term stability and potential to generate income. GULF RESOURCES has a high health score of 7/10 considering its cashflows and debt, indicating that it is capable of sustaining operations even in times of crisis. Based on our analysis, GULF RESOURCES is strong in asset, medium in profitability and weak in dividend and growth. This reveals GULF RESOURCES as a company that focuses more on capital gain and steady income, rather than aggressive growth. More…
Peers
Competition between Gulf Resources Inc. and its competitors, Suzhou Jinhong Gas Co Ltd, Ise Chemicals Corp, and Mitsubishi Gas Chemical Co Inc, is fierce. These four companies are all vying for a spot in the gas and chemical industries, and each is bringing their own competitive products and strategies to the table. With each company striving to be the best, customers are sure to benefit from the competitive pricing and innovative offerings that the competition is sure to bring.
– Suzhou Jinhong Gas Co Ltd ($SHSE:688106)
Suzhou Jinhong Gas Co Ltd is a vertically integrated natural gas company that produces, processes, and distributes natural gas to commercial, industrial, and residential customers in China. The company has a market capitalization of 11.73 billion US dollars as of 2023, making it one of the largest companies in the industry. They have a Return on Equity of 6.0%, which is slightly lower than the industry average; however, this still indicates a strong financial performance from the company. Additionally, the company has seen consistent growth since its inception in 2008, and its stock price has also shown strong performance in recent years.
– Ise Chemicals Corp ($TSE:4107)
Ise Chemicals Corporation is a chemical company based in Japan. It specializes in the development, manufacture, and sale of chemicals for industrial use. The company has a market cap of 40.63 billion as of 2023, making it one of the largest companies in its sector. Its Return on Equity (ROE) is also impressive at 7.77%, suggesting that the company is profitable and able to generate returns on its investments. This is indicative of the company’s strong business model, efficiency, and profitability.
– Mitsubishi Gas Chemical Co Inc ($TSE:4182)
Mitsubishi Gas Chemical Co Inc is a large Japanese chemical company with a market capitalization of 392.18B as of 2023. The company has a Return on Equity of 8.1%, which is relatively high for the industry. Mitsubishi Gas Chemical Co Inc produces a wide range of chemical products, including polymers, resins, specialty chemicals, and pharmaceuticals. The company also provides research and development services related to chemicals, synthetic materials, and biotechnology. Mitsubishi Gas Chemical Co Inc is one of Japan’s leading chemical companies and has been in business for over 70 years.
Summary
Gulf Resources, a chemical manufacturer based in Shouguang, China, recently received a notice from the local government requiring it to temporarily close its bromine facilities. This unexpected news caused the company’s stock price to jump the same day, providing a potential opportunity for investors. While the move may be a short-term gain, it is important to consider the long-term effects of the closure. In the short-term, investors should investigate how the closure will affect production and profitability. There may also be questions about how long the closure will last and if it will require any additional capital investments to resume operations.
In the long-term, investors should research if any new regulations or laws are in the works that further affect Gulf Resources’ operations. It is also important to consider how these changes may impact the overall business landscape in Shouguang. With an understanding of these factors, investors can make informed decisions about their involvement in Gulf Resources.
