Shares of Nu Skin Jump Following AIC China Review Update
Nu Skin Enterprises (NYSE: NUS) announced an update on the Administration of Industry and Commerce's (AIC) regulatory reviews in Shanghai and Beijing on Monday.
Following the regulatory reviews, the press release states that Nu Skin was fined US $524,000 for the sale of products that were not registered for the direct selling channel. The company was also penalized $16,000 for product claims that lacked sufficient documentary support. Six of Nu Skin's sales employees were fined for unauthorized promotional activities for a combined amount of $241,000. The company was asked to “enhance the education and supervision of sales representatives.”
On January 21, 2014, Nu Skin China announced that it “voluntarily suspended business promotional meetings and applications for new sales representatives to fully cooperate with the regulatory reviews.” The company noted that it is working on sale representative training and supervision and “will seek direction from the Chinese government with respect to resuming normal business activities.”
Stifel Nicolaus reported that the China update is a “positive” for the company. The analyst noted that this may indicate a path toward the resumption of normal activities in China. Stifel currently has a Hold rating on Nu Skin shares.
Nu Skin's president of global sales and operations Dan Chard commented, “We continue to believe in the potential of China's large and growing market. We remain committed to working cooperatively with the Chinese government to ensure the healthy, long-term growth of our business.”
Shares of Nu Skin closed at $75.00 on Friday. The stock was up more than 33.15 percent in pre-market trading and is currently at $95.08 shortly after the opening bell, up 26.77 percent.
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