Stocks’ Details

Atomo Diagnostics Limited

Additional Order for COVID-19 Test Devices: Atomo Diagnostics Limited (ASX: AT1) is a medical device company which supply its rapid test device technologies to the global diagnostic market. As on 17 April 2020, the market capitalization of the company stood at $218.82 million. The company has recently announced that it has received second purchase order from NG Biotech, SAS for an additional 550,000 integrated blood test devices for testing of antibodies produced in response to COVID19.

Significant Increase in Revenue and Gross Margin: During 1H20, product sales exceeded the full year FY19 and stood at $937k. This was driven by the acceleration of registrations and in-country rollout of HIV products and the launch of OEM RDT products in Europe. In the same time span, gross profit margin more than doubled to 42.0% driven by economies of scale and more regular production scheduling.


Growth in Revenue (Source: Company Reports)

Stock Recommendation: As per ASX, the stock of AT1 has recently been listed on ASX and is inclined towards its 52-week high level of $0.630. Growth of the company is accelerating with a wider range of opportunities, with the current focus on commercializing COVID-19 rapid antibody tests globally. During 1H20, gross margin went up to 42%, up from 16.3% in 2H19 and net margin witnessed a significant improvement over the previous half. Considering the current trading levels and decent financial performance, we have a watch stance on the stock at the current market price of $0.520, up by 33.333% on 17 April 2020.

ClearVue Technologies Limited

Collaboration Agreement with eLstar Dynamics BV: ClearVue Technologies Limited (ASX: CPV) is engaged in the research and development activities for the world leading solar glass technology. As on 17 April 2020, the market capitalization of the company stood at $12.23 million. The company has recently entered into a collaboration agreement with eLstar Dynamics B.V to produce a market leading, wireless smart window, which is capable of energy production and lighting control. 

During 1H20, revenue of the company went down by 47.95% to $378k and loss witnessed a decline of 54.33% to $1.21 million. During the half year, the company has also received UL 61730 certification, IEC 61730 certification and IEC 61215 certifications which will allow it to focus on sales outreach activities into the US and Europe.


1H20 Financial Highlights (Source: Company Reports)

Manufacturing Agreement with YY Windows: The company has signed a new OEM Manufacturing Agreement with Jiangsu YY Windows and Curtain Wall System Co. Ltd, China where YY Windows will make IGU panels and finished window products for CPV. 

What to Expect: The company is focused on delivering long term shareholder value and on an aggressive global growth strategy to expand into global markets. CPV is expecting its first orders from U.A.E., Asia Pacific, US Licensee and South African / European Licensees.

Stock Recommendation: As per ASX, the stock of CPV is trading close to its 52-weeks’ low level of $0.050, proffering a decent opportunity for accumulation. During 1H20, EBITDA and net margin of the company witnessed an improvement over the previous half. This indicates that the company is managing its costs well and is capable of converting its revenue into profits. Considering the trading levels, improvement in margins and decent outlook, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.105, down by 4.545% on 17 April 2020. 

Wellness and Beauty Solutions Limited

WNB signs JV to scale up production of MICRO19 Sanitiser: Wellness and Beauty Solutions Limited (ASX: WNB) is a non-surgical medical aesthetics services company providing anti-aging cosmetic and body-sculpting treatments. As on 17 April 2020, the market capitalization of the company stood at $13.02 million. The company has recently executed a binding agreement with Piggott Investments Pty Ltd and Glegra Pty Ltd, to form a MICRO 19 Pty Ltd for producing hand sanitiser products for sale.

Financial Highlights: During 1H20, revenue of the company went up by 28.9% to $7.54 million and witnessed a decline in loss by 6.8% to $6.9 million. Growth in revenue was driven by strong contribution from the sale of products segment.


1H20 Financial Highlights (Source: Company Reports)

WNB Temporary Closure of Clinics: The company has taken a decision to close its nine Immersion Clinical Spas following the social distancing rules. It is however, focused on delivering on its recently announced MICRO19 sanitiser range.

Stock Recommendation: As per ASX, the stock of WNB gave a return of 62.5% in the past three months but a negative return of 31.58% in the past six months. During 1H20, gross margin of the company was 29.6%, lower than the industry median of 67.5%. On the TTM basis, the stock is trading at a price to book value multiple of 2.4x, higher than the industry median (Healthcare Providers and services) of 1.7x. Considering the volatility in returns, lower gross margin, closure of clinics and higher price to book value multiple, we have a watch stance on the stock at the current market price of $0.013 on 17 April 2020.  

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