GigaCloud Technology Inc

GigaCloud Technology Inc (NASDAQ: GCT) is a holding company mainly engaged in the business to business (B2B) electronic commerce (e-commerce) business for large parcel merchandise. The Company is engaged in the operation of e-commerce platform named GigaCloud Marketplace which integrates product discovery, payments, and logistics tools.

Recent Financial and Business Updates:

• Financial Highlights for the Second Quarter of 2023:
• Total revenues for the second quarter of 2023 amounted to USD 153.1 million, indicating a substantial increase of 23.5% compared to the same period in 2022.
• Gross profit during the second quarter of 2023 reached USD 40.4 million, reflecting an impressive surge of 137.1% from the second quarter of 2022. Furthermore, the gross margin improved, rising to 26.4% in the second quarter of 2023, up from 13.7% in the second quarter of 2022.
• Net income for the second quarter of 2023 stood at USD 18.4 million, marking a remarkable increase of 201.5% in comparison to the second quarter of 2022.
• As of June 30, 2023, the company held cash amounting to USD 181.5 million and restricted cash totaling USD 0.9 million. This represents an increase from the figures reported as of December 31, 2022, which were USD 143.5 million in cash and USD 1.5 million in restricted cash, respectively.
• Adjusted EBITDA for the second quarter of 2023 amounted to USD 24.9 million, demonstrating a substantial increase of 219.3% from the second quarter of 2022.

• Financial Highlights for the First Half of 2023:
• Total revenues for the first six months of 2023 reached USD 280.9 million, marking a notable 18.8% increase from the first six months of 2022.
• Gross profit during the first half of 2023 amounted to USD 69.9 million, reflecting a significant increase of 106.4% from the first half of 2022. Additionally, the gross margin improved, reaching 24.9% for the first half of 2023, compared to 14.3% in the first half of 2022.
• Net income for the first half of 2023 totaled USD 34.3 million, indicating a substantial increase of 216.7% compared to the first half of 2022.
• Adjusted EBITDA for the first half of 2023 amounted to USD 44.7 million, demonstrating a remarkable increase of 203.9% compared to the first half of 2022.

• Operational Highlights:
• GigaCloud Marketplace GMV for the 12 months ending June 30, 2023, amounted to USD 607.5 million, showcasing a substantial increase of 32.4% from the 12 months ending June 30, 2022.
• The number of active 3P sellers reached 665 for the 12 months ending June 30, 2023, marking a significant increase of 47.1% from the 12 months ending June 30, 2022.
• Active buyers numbered 4,351 for the 12 months ending June 30, 2023, reflecting a 7.1% increase from the 12 months ending June 30, 2022.
• Spending per active buyer amounted to USD 139,629 for the 12 months ending June 30, 2023, showing a notable increase of 23.6% from the 12 months ending June 30, 2022.
• GigaCloud Marketplace GMV attributed to 3P sellers was USD 324.7 million for the 12 months ending June 30, 2023, marking a substantial increase of 65.1% from the 12 months ending June 30, 2022. 3P seller GigaCloud Marketplace GMV represented 53.4% of the total GigaCloud Marketplace GMV for the 12 months ending June 30, 2023.
  

Technical Observation (on the daily chart)

Currently, the stock has given a return of 250.84% from its 52- week low dated November 03, 2023. The RSI (14 period) momentum indicator is at an overbought value of 75.22, with expectations of some consolidation or some short-term correction. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels.

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As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to GigaCloud Technology Inc (NASDAQ: GCT) at the current market price of USD 14.55 as of September 05, 2023, at 08:10 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 05, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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