Stocks’ Details 

Niu Technologies

Q4FY20 Update: Niu Technologies (NASDAQ: NIU) is a leading provider of smart urban mobility solutions. The company is mainly engaged in designing, manufacturing, and selling smart e-scooters. As on 14 January 2021, the market capitalization of the company stood at ~$2.93 billion. During December 2020 quarter, the company sold 149,705 e-scooters, representing a 40.9% year-over-year growth. In China alone, the company sold 137,586 e-scooters, up 35% on pcp, driven by retail network expansion and new products such as G0, MQi2 and MQiS. In the international markets, the company sold 12,1191 e-scooters, up 179.6% on pcp, driven by the demand recovery. In December 2020, Aurora Mobile Limited, a leading mobile developer service provider in China, entered into a partnership agreement with NIU to improve operational and service efficiency of the company to deliver an optimal user experience for their customers.

Q420 and FY20 e-scooters Data (Source: Company Reports)

Outlook: The company continues to work closely with its international distributors to fast growth track. Further, it is implementing cost optimization initiatives to improve its gross margin. For 4QFY20, the company expects revenues to be in the range of RMB 565 million to RMB 615 million, depicting a YoY rise of 5% to 15%.

Valuation Methodology: Price to Book Value Multiple Based Relative Valuation (Illustrative)

Price to Book Value Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All forecasted figures have been taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: Over the last six and nine-months period, the company has provided a return of 114.19% and 460.28%. The stock recently touched its 52-week high price of $41.50. On the technical analysis front, the stock has a support level of ~$33.1 and resistance of ~$39.27. We have valued the stock using the price to book value multiple based illustrative relative valuation method and arrived at a target price with limited upside (in % terms). For the purpose, we have taken peers like Arcimoto Inc (NASDAQ: FUV), Xpeng Inc (NYSE: XPEV), Electrameccanica Vehicles Corp (NASDAQ: SOLO), etc. Considering the steep increase in the stock price over the last few months, current trading levels, and valuation, we suggest investors to book profit and give a “Sell” rating on the stock at the closing price of $39.22, down by 0.13% as on 14 January 2021.

Neptune Wellness Solutions Inc.

Embarking the Widespread Distribution of Mood Ring™ Products: Neptune Wellness Solutions Inc. (NASDAQ: NEPT) is a diversified and fully integrated health and wellness company that provides turnkey product development and supply chain solutions across numerous health and wellness verticals. As on 14 January 2021, the company’s market capitalization stood at ~$249.92 million. The company recently announced the launch of its own in-house developed Cannabis brand Mood Ring™ products in British Columbia. These products are now available for purchase through the BC Cannabis Stores online and subsequently the brick-and-mortar locations. In November 2020, the company had secured the first purchase orders of its Mood Ring™ products to the British Columbia Liquor Distribution Branch (BCLDB).

September 2020 Quarter Highlights: During the September 2020 quarter, the company reported total revenue of $28.68 million, up 340% on pcp. Gross loss for the quarter decreased to $4.55 million compared to a profit of $3.25 million in the previous quarter, due to strategic investments to position the company for further distribution growth. As at 30 September 2020, the company had cash and cash equivalent of $9.08 million.

Q2FY21 Result Highlights (Source: Company Reports)

Outlook: Looking ahead, the company is focused on bringing the benefits of cannabis to the world to harness its wide range of benefits across wellness, beauty, and household products. The company is currently pursuing the development and manufacturing of many new cannabis product lines. NEPT is now looking to penetrate the U.S. and global markets with cannabis products upon potential legalization.

Stock Recommendation: The stock of NEPT has provided a return of 28.667% in the last one month. The stock has a 52-week high and low of $3.58 and $0.96, respectively. On the technical analysis front, the stock has a support level of ~$1.85 and resistance of ~$2.28. Considering the stock’s decent returns in the past one-month period, and looming investment risks, we suggest investors to book profit and give a “Sell” rating on the stock at the closing price of $1.93, up by 4.32% as on 14 January 2021.

Oragenics Inc.

Update on Terra CoV-2 Vaccine: Oragenics Inc. (AMEX: OGEN) is a health care company that is engaged in developing new antibiotics against infectious diseases. As on 14 December 2021, the company’s market capitalization stood at ~$87.17 million. The company is currently focused on the creation of the Terra CoV-2 vaccine candidate to combat the novel coronavirus pandemic. The company recently provided an update on the competitive positioning of Terra CoV-2 vaccine against SARS-CoV-2, wherein it assured that Terra CoV-2 vaccine would provide long-lasting protection from the SARS-CoV-2 virus with only one or two doses. OGEN recently held a successful pre-Investigational New Drug (IND) meeting with FDA and secured agreements that allow it to save three to six months on pre-IND development timelines. The company expects to file IND in 3Q21 with the commencement of patient enrollment in Phase 1 clinical study immediately thereafter.

September 2020 Quarter Update: For the quarter ending 30 September 2020, the company reported total operating expenses of $4.5 million and a net loss of $4.49 million. Net cash used from operating activities came in at $13.3 million. At the end of the quarter, the company had cash and cash equivalent of $10.04 million and total assets of $11.28 million.

Quarter Highlight (Source: Company Reports)

Outlook: In November and December of 2020, the company completed financing transactions, raising cumulative gross proceeds of $12.5 million which will be used to advance the company vaccine through IND-enabling studies, including immunogenicity, viral challenge studies and the toxicology study. The company is of the view that there will be plenty of demand for the Terra CoV-2 vaccine once development is successfully completed.

Stock Recommendation: The stock of OGEN has provided a return of 119.9% in the last one month and 64.93% in the last three months. The stock has a 52-weeks’ low and high price of $0.36 and $2.09, respectively. On the technical analysis front, the stock has a support level of ~$0.76 and resistance of ~$1.22. On a TTM basis, the stock is trading at a Price to Book multiple of 7.3x, higher than the industry median (Biotechnology & Medical Research) of 4.1x. Considering the stock’s decent returns in the last few months, and rising competition in the market for COVID-19 vaccines, along with TTM Valuation, we suggest investors to book profit and give a “Sell” rating on the stock at the closing price of $0.95, up by 23.65% on 14 January 2021, owing to the recent update on the competitive positioning of Terra CoV-2 vaccine against SARS-CoV-2.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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