Cellmid Limited

CDY Details

Cellmid Limited (ASX: CDY) deals in a healthy beauty-tech business. It has global distribution and sales its propriety brands of differentiated clinically validated anti-aging solutions.

Result Performance – For the third quarter ended 31 March 2021 – (Q3FY21)

For the third quarter ended 31 March 2021, consumer health sales grew 12% YoY led by a rise in eCommerce sales on Cellmid’s evolis branded platforms and through eCommerce retail partners. Further, net cash burn from operating activities decreased to $153K for the quarter. Meanwhile, operating expenditure was reported lower than pcp as staff and R&D costs, as well as general operating expenses have been reduced.

The company completed a $4.5 million capital raise in March 2021, totaling cash reserves to around $8.3 million after costs that will be also used for eCommerce growth plans and manage orders under its Chinese distribution agreements.

Key Data (Source: Company Reports)

Recent Updates

• As per the release dated 8 June 2021, the wholly-owned consumer health subsidiary of the company, Advangen International Pty Ltd has signed a Supply and Collaboration Agreement with Pump Haircare Pty Ltd. As per the agreement, the company will supply Cellmid’s FGF5 inhibitor hair growth products under the PUMP brand and will collaborate with Pump on new products.
• As per the release dated 17 June 2021, the TSV sales event held on 12 June 2021 on Japanese television shopping channel QVC reported a record wholesale revenue of JPY 117.14 million for the Company ($1.38 million). This is 36% higher than the $1.01 million achieved on the same TSV event in June 2020 and 23% higher from June 2019 event.

Risk:

Global regulations are the biggest compliance risk for the company, followed by testing and ingredient sourcing, and claims substantiation. Further, the company is exposed to several financial risks that include credit risk, liquidity risk, market risk, and Interest rate risk.

Outlook:

The company plans to capture the e-commerce market share; hence, it is investing heavily in its e-commerce infrastructure and digital marketing capabilities, alongside building distribution partnerships with online retailers. The company generates over 70% of US sales and 50% of Australian sales through online channels. Further, the company plans to grow its business in China through cross-border e-commerce, social commerce, and import approval for Jo-Ju and Lexilis shampoos. The USA and Australia sales growth is anticipated to be led by new products, new brand partnerships, and eCommerce. Japanese sales growth will follow the export of heritage brands from Japan to other Asian markets. The launch of evolis in Korea and third-party distributors of the same in FY22 is forecasted to drive growth.

Technical Overview:

Weekly Chart –

Source: REFINITIV 

Note: Purple colour lines are Bollinger Bands® with the upper band suggesting overbought status while the lower band oversold status, and yellow lines are Fibonacci retracement lines which measure price rebound and backtrack. https://www.bollingerbands.com/

The stock had been in a downtrend, experiencing low volatility. However, for past three weeks, it has been consolidating with a bias on the upside. The technical indicator RSI with a reading around 34 and a curve at the end pointing up, suggests gaining of positive momentum.

Going forward, the stock may have resistance around the upper Bollinger band of $0.098 whereas support could be around the lower Bollinger band of $0.054.

Stock Recommendation:

The stock declined by ~16.4% in 3 months. It has made a 52-week low and high of $0.056 and $0.172, respectively. Over the time span of 1 year and 9 months, the stock declined by ~38.3% and ~25.3%, respectively.

Considering the aforesaid facts, current trading levels, management thrust on e-commerce sales, decent cash position, better Q3FY21 result, focused strategies in key geographies, we give a ‘Speculative Buy’ rating on the stock at the current market price of $0.066 per share, up 1.538% on 18^th June 2021.

Stemcell United Limited

SCU Details

Stemcell United Limited (ASX: SCU) is an Australia-based biotechnology and pharmaceutical company with a focus on the development, reproduction, culture, and extraction of plant stem cells for TCM medicinal, health, beauty, and anti-aging applications through patented technology.

Result Performance – For the third quarter ended 31 March 2021 – (Q3FY21)

For the third quarter ended 31 March 2021, receipts from customers were reported at ~A$2.78 million, primarily driven by the aquaculture operations and supported by the resumption of the sale of resina products. As of 31 March 2021, SCU retained A$2.55 million cash at the bank, providing the required financial flexibility to accomplish near-term growth and commercialization initiatives. This will be further supported with A$3.8 million from the placement in April 2021. Further, it raised ~A$1 million through the issue of ~67 million new fully paid ordinary shares at A$0.015 per share. With this, it has raised a further A$3.8 million through the issue of ~200 million new fully paid ordinary shares at A$0.019 per share and 110,000,000 options.

Key Data (Source: Company Reports) 

Risk:

The company is exposed to various risks relating to financial instruments. The core risks are credit risk, liquidity risk, interest rate risk, and foreign exchange risk.

Outlook:

The company made sound progress during the period, which has strengthened the foundation for the company to further cement its position as one of the leading plant-based biotechnology companies in the Asia Pacific region. Further, the company has appointed Mr. David Plattner as a strategic advisor who will ensure progress on sustainable development initiatives with his wide experience and established network. Post completion of the recent capital raise, the company is well funded to take up new opportunities including partnerships in the cannabis and hemp sector and grow its vertically integrated marine cultivation initiatives. The MOU with Terrenus and UMS are prime examples of this, and the company looks forward to gaining strength further.

Technical Overview:

Weekly Chart –

Source: REFINITIV

Note: Purple colour lines are Bollinger Bands® with the upper band suggesting overbought status while the lower band oversold status, and yellow lines are Fibonacci retracement lines which measure price rebound and backtrack. https://www.bollingerbands.com/

The stock was caught under selling pressure, the date it made an all-time high of $0.049, and the trend since then is continuing. For the ongoing week, it has given close at its weekly low price of $0.016 thereby opening the door for the further downside. The technical indicator RSI with a reading around 43 and a curve at the end pointing down, suggests neutral to weak momentum for the stock.

Going forward, the stock may have resistance around $0.020 whereas support could be around $0.010.

Stock Recommendation:

The company’s stock has fallen by ~38.4% in 3 months and ~11.11% in 6 months. Considering the movement of stock price in the past few months, we advise the market players to liquidate and book profits.

Thus, considering the continued net loss in H1FY21, and the associated business risks, we give a “Sell” rating on the stock at the current market price of A$0.016 per share on 18^th June 2021.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

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