Cellmid Limited

CDY Details

Cellmid Limited (ASX: CDY) researches, develops and commercializes diagnostic and therapeutic products for cancer and multiple chronic inflammatory conditions in Australia, the United States, and Japan.

Result Performance – For First Half Ended 31 December 2020 – (H1FY21)

• Fall in Revenue: Revenue from contracts with customers stood at $2.79 million, down 24% YoY. This can be primarily attributed to the timing of major orders, in particular, the Chinese export orders have since shipped and will be accruing in H2FY21.
• The rise in Net Loss: The loss for the company after providing for income tax increased by 71% to $2.39 million from $1.395 million in H1FY20.

Key Data (Source: Company Reports)

Quarterly Activity Report for the Quarter ended 30 June 2021 (Q4FY21)

• Significant sales result from QVC Japan in June 2021 at AU$1.38 million for the Jo-Ju RED EX branded hair loss products.
• Completed sale of biotech subsidiary Lyramid and collected $500k in upfront payment in FY2021, in addition to sharing in future upside in the midkine asset portfolio through a license agreement
• The company remained on track to achieve operational profitability in FY22 with planned revenue growth in e-commerce, new distribution channels to China, new product launches, and strengthening operational expenditures.

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 tap the e-commerce market share hence it is investing 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. 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:

Chart:

Source: REFINITIV

Note: Purple Color Line Reflects RSI (14-Period)

Stock Recommendation:

The stock posted 6-month and 1-year returns of ~-45.2% and ~-50.2%, respectively. It is currently trading below the average of 52-week high price of $0.135 and 52-week low price of $0.050.

Considering the aforesaid facts, current trading levels, rise in an e-commerce business, decent cash position, focused strategies in key geographies, we give a ‘Speculative Buy’ rating on the stock at the current market price of $0.051 per share on 16^th August 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.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.