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      MF Stock: Why Missfresh Has Continued The Rally?

      By Fahim Awan

      Published on

      August 7, 2023

      1:02 PM UTC

      MF Stock: Why Missfresh Has Continued The Rally?

      Missfresh Limited (NASDAQ: MF) is making waves today, experiencing a remarkable 62.12% surge to reach $3.21 in premarket trading. Just recently, the company’s shares leaped an astonishing 284.54% on Friday, concluding the trading day at $1.98.

      This impressive spike follows the disclosure of Missfresh Limited’s annual results. Although these figures weren’t particularly dazzling, the firm’s strategic maneuvers have instilled a sense of confidence among investors. Furthermore, the company executed a series of calculated moves to fortify its position.

      Missfresh (MF) recently submitted its annual report on Form 20-F for the fiscal year that concluded on December 31, 2022, to the U.S. Securities and Exchange Commission (SEC). Emerging as a pioneer in China’s local retail landscape, Missfresh initiated its on-demand DMW retail venture in October 2014.

      Its foray into the intelligent fresh market business in late 2020 and the subsequent launch of the retail cloud business in 2021 further solidified its digital transformation of the neighborhood retail sector.

      In 2022, a pivotal restructuring of MF’s strategy aimed for sustainability resulted in the cessation of the on-demand DMW retail sector, staff optimization, and discontinuation of the Next-Day Delivery BU.

      Remarkably, these adjustments, accounting for around 90% of Missfresh’s net revenue and total cost of revenue from 2020 to 2022, have wielded substantial influence on its overall business, financial performance, reputation, and prospects.

      March 2023 marked another strategic shift for MF, leading to the termination of both the intelligent fresh market business and the retail cloud business, as the company focused on its recently launched private label product retail venture in January 2023. Since July 2022, Missfresh has been actively redefining its business strategy, with these changes shaping its trajectory.

      In terms of financials, Missfresh’s total net revenue surged from RMB 6,130.4 million in 2020 to RMB 6,951.5 million in 2021, but then dipped to RMB 2,761.3 million (equivalent to US$400.4 million) in 2022. Across the same period, MF incurred net losses of RMB 1,649.2 million, RMB 3,849.8 million, and RMB 1,523.6 million (equivalent to US$220.9 million) in 2020, 2021, and 2022, respectively.

      Missfresh has inked dual share purchase deals with investors and a separate one with Mejoy Infinite Limited and its shareholder. These agreements, spanning Financing and Business Acquisition, secured the nod from the Company’s board and special committee.

      The Financing pacts involve investors subscribing to 5,400,000,000 Class B ordinary shares for $27.0 million, pending specific closure criteria. Post-transaction, these investors will hold 88.1% of total shares, ceding voting rights to Chairman and CEO Mr. Zheng Xu. In the Business Acquisition pact, the Company aims to acquire all Mejoy Infinite Limited shares for $12.0 million cash, set to close within 45 days, conditions permitting.

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