While finance and corporate services company Greenpro Capital’s (GRNQ) recent announcement that it will form a joint venture to develop a GEO-LEO integrated satellite network has raised investors’ hopes for the stock, the company’s meager profit margin and the risky investment strategy could be concerning. Furthermore, given that GRNQ’s current valuation is not justified by its weak financials, is the stock worth owning now? Read on. Let’s find out.Based in Hung Hom, Hong Kong, Greenpro Capital Corp. (GRNQ) offers investment planning, financial and corporate services to small- and medium-sized businesses in Hong Kong, Malaysia, and China. Last week, GRNQ’s Angkasa-X formed a strategic partnership with Silkwave Holdings to develop the world's first GEO-LEO integrated satellite network. While investors are optimistic about the partnership’s goal of establishing a space technology ecosystem in Malaysia and ushering in a new era of digital transformation in the ASEAN market, its shares are down 13.1% in price over the past month and 62.9% year-to-date. GRNQ is currently trading 81.7% below its 52-week high of $4.15.
Although its strategic investments to promote internet connectivity through Angkasa-X's "LEO" satellite constellation and intensify its digital transformation journey could strengthen its business portfolio, its negative profit margin could be concerning.
Furthermore, GRNQ’s current valuation is not in sync with its staggering losses and rising expenses. So, here is what we think could influence GRNQ’s performance in the near term: