Dehaier Medical Systems Ltd. (NASDAQ:DHRM) Exploded on a New Distribution Contract

[[tagnumber 0]]Yesterday the share price and the trading volume of Dehaier Medical Systems Ltd. (NASDAQ:DHRM) stock exploded as the company announced a new contract for the delivery of its proprietary devices. DHRM still trades far below book value of equity, yet there could be good reason for the low interest in the stock.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]DHRM closed the last trading session at $1.94 for a share which represents a 31.08% gain from the previous close. The trading volume of around 1 million traded shares was ten times higher than the average and the highest for at least one year. Since technical indicators just crossed some critical levels on DHRM chart, the stock could make more gains today, yet longer–term the value of the shares may not be sustainable.[[tagnumber 1]] [[tagnumber 0]]Latest available financial report for the year 2014 was rather negative in terms of operational performance. Revenues and net profit have declined consistently over the last three years though the operating cashflow for 2014 turned positive again. For 2014 only, total revenue dropped nearly 29% which the management attributes to worsening general market conditions.[[tagnumber 8]][[tagnumber 1]] [[tagnumber 0]]Also according to the report, DHRM management sees more potential in the sleep respiratory business where it plans to allocate more resources, though the reported low cash reserves do not allow for much of flexibility and higher capital investments. The major part of the company‘s revenues comes from the medical device line which includes products like X–ray systems, anesthesia machines etc.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]The press release from yesterday is also related to that part of DHRM business. The company announced it had won a medical device distribution bid a for a new healthcare project in Mongolia that is supported by China Development Bank Corp. According to the PR, the contract is for the delivery of C–arm X–ray machines and defibrillator monitors, however, no financial data whatsoever has been given to investors.[[tagnumber 1]] [[tagnumber 16]] [[tagnumber 1]]