So, the market has woken up to this sleeping giant and emerging growth story.
Some people have made some big money on NZS over the past month. It is hard to believe we were trading in the 1 cent range only 4 weeks ago.
This last week seen a lot of profit takers and fair enough to them. It is only natural after such a quick run up that people will take profits.
Well played to those who sold at 8 cents and bought back at 5 cents.
I would be lying if I said the thought of taking profits didn’t cross my mind earlier this week, but I’ve never been any good as a trader and my style is to go long on a great business.
Boring, I know!
I am long on NZS and I do not have a price target. I have been an investor for a long time and have never been able to get in this early of what appears to be an emerging growth story that can be a life changing investment over time if you are patient.
But that’s not why I created this thread.
There have been previous threads created from some very knowledgeable people about fair value estimates and we thank them for their very detailed and helpful contribution and wish them luck since they have now exited after their initial price targets were exceeded in such a short amount of time.
But those price estimates were done before some recent announcements including the Quarterly and the Strategic Supply Agreement into Europe.
With many expecting NZS to retrace hard since the high of 8.4 cents earlier in the week and given that retrace was met with rather surprisingly good resistance as well as good volume in a late Friday surge tells us there is a new floor and an abundance of new investors over the past week.
Welcome to those new investors!
Now let’s chat about what is upcoming for NZS that maybe the market has not fully priced in yet:
I have listened to both the webinar and ****** interview multiple times and transcribed the entire thing and after some further research which culminated in an email to Aldo Miccio (Exec Director) yesterday - he confirmed NZS are far from maximum output.
The current through put can be increased 5-fold on current resources, its only a matter of time before more deals, purchase agreements and strategic partnerships are announced.
There has been some debate about a CR from some people during the week.
I will point out that I made a post as to my beliefs in another thread yesterday about why a CR may not occur right now.
It was based on listening to the webinar multiple times and reading between the lines which was liked by a very senior person of the company.
Not sure if anyone else has had the pleasure of receiving a like from this individual on here but they are here keeping an eye on shareholder sentiment which is once again another incredible sign of a company with management that have a lot of skin in the game and that care for its shareholders.
I remember when they purchased on market a couple weeks back for a very minor amount and people pointed out then that it was a sign to us shareholders.
Feel free to click on my profile and see my post from yesterday where I copied the email response from Aldo where he specifically mentions "Itsimportant sales pull through expansion" among other things. I’ll let you draw your own conclusions as to what that could mean.
Now, I have collated all potential upcoming announcements we can expect in the not to distant future that could drive the share price further and justify NZS as a major player moving forward.
This is info coming from senior management and there is always the potential for other agreements or orders that can be made at any time also don’t forget.
I’m not a financial expert and couldn’t tell you what these contracts once they are signed may be worth to the bottom line exactly but I think its fair to say if they knock these deals over, fair value could be much higher than where we are now.
It would be good to see some people with the ability to crunch numbers jump in and contribute to this discussion.
No-one knows the values of these potential upcoming deals, one can only speculate, but it would be interesting to see what the market believes is fair value if NZS pull off the following:
In no particular order:
1. Additional sales with Dr Behr that sit outside current minimum 430k order contract for green lip mussels:
a.Undaria (seaweed) a new product NZS are developing and said to be very close to having finalised, expected this year.
b.Oyster Powder – expected this year
c.Marine Collagen – expected this year
d.Oils – there is an order already from Dr Behr.
NZS currently need to use a 3rd party to extract oils for now and are looking to bring this in house in the near future only once more agreements are signed. This would ultimately improve the margins for oil extract products. $300-$500k NZD expected to be spent for this equipment and installation only once new contracts are signed.
NZS expects to grow sales with Dr Behr beyond year one which are not yet accounted for in the current contract. Aldo mentioned a few in the interview in addition to above:
e.Astaxanthin
f.Abalone extracts
g.Sea cucumber extracts
Expect further market announcements on this, they would love to keep us updated once the new products have been finalised and ready to be sent to Germany telling us the fine details about the dollars involved IMO.
2.Signing additional Strategic Supply Agreementslike the Dr Behr one in other regions including Asia and North America.
Aldo mentioned Japan and USA specifically in the webinar for this style of potential agreement. These type of clients prefer long term contracts and it seems they are trying to de-risk the business further with multiple deals in multiple regions across the world.
When asked in the webinar about North America, Aldo had this to say: “NorthAmerica, USA is at the top of the list for us and I believe we've got a fewclients, KDI clients, based in that market. And so that's one of the marketsthat we've got ongoing negotiations to wrap up some supply agreements”Seems to me that maybe there could be more than one deal brewing for USA.
There was also a trial order that recently went to Japan last month as well noted in the Quarterly that could be a potential partner announced soon also.
Now, we seen the Dr Behr agreement cause a Trading Halt and some serious attention which caused the share price to gap up incredibly. One would think if similar deals are signed with USA and Japanese businesses then this could cause immense interest and put us on the radar even more than we are now.
3.Further sales to KDI clients - NZS have access to a wide range of clients that were on KDI’s book. Some of these orders have been disclosed in the Quarterly After Date section but the opportunity here is massive.
The point that interests me the most here is what Aldo mentioned in the webinar that 90%of KDI’s sales to these global clients in the past were for Astaxanthin only. He could not disclose the number of clients exactly in the email response I received but NZS have the opportunity to “Bolt on other products from their range”including Marine Collagen, Abalone, Oyster & Mussels just to name a few. They have such a wide range to offer these clients.
Not sure if they will announce some of these deals officially. They have often just showed up in the summaries of their financial reports or a news article but it no doubt will continue to contribute to their strong revenue growth.
Expect an announcement if orders are large or recurring in nature from particular clients IMO.
4.“Ongoing discussions with a couple top 10 Chinese pharmaceuticalcompanies” -As mentioned in the interview, Aldo states that these discussions are happening now.
There is no timeframe mentioned as to when we may expect anything announced but as other people have pointed out in the Webinar & Interview thread, those top 10 Chinese pharma companies are ridiculous in size.
Not one but a couple of potential deals to come from this!
We could be looking at two future trading halts and further announcements if they strike a deal with not one but both top 10 Chinese companies they are currently talking to IMO.
Thanks to @mufc20for this:
5.Entering the UK Market-Aldo answered a question specifically about the UK Market in the webinar about the exciting opportunity UK presents being outside EU.
There are ongoing discussions with a couple UK firms as well.
Not sure if there could be a similar strategic partnership agreement here as well or just simple purchase agreements, but their intention is clear. They are leaving no stone unturned and seem to be chatting to a number of clients in all regions.
Potential announcements and or future trading halts cannot be ruled out here IMO.
6.Hong Kong client turning into a purchase agreement? –Ling Maw Trial Order $148k -Andrew Peti (CEO) was asked specifically about this order and the HK client in the webinar.
His response was that this was the largest trial order for DriedLing Maw they have had.
Not sure how big this deal could end up being if they do sign some kind of future purchase agreement but $148k as a trial order for the month of July was deemed to be significant.
Hong Kong do have an enormous market (as does most of Asia) for Dried Seafood fish maw some $2billion pa worth has been reported. This would be different to SMB agreement as that was for Frozen Ling Maw.
From Andrew Peti: “So the quality and I guess the product that we'reputting to that particular purchaser is very good. I'm sure they're going to behappy with it. And I think it will lead to bigger and better things with thatparticular client”If it’s a small purchase agreement – expect an announcement only.
If it’s a large purchase agreement – expect a Trading Halt followed by an announcement as per SMB deal IMO.
The Next Financial Report is likely to showcase that weare in a profitable position and display strong quarter on quarter revenue growth– This could be priced in already but I thought its important to mention.
Andrew & Aldo clearly stated NZS will be at breakeven point within this financial year. Optimistically that could be as soon as 3-6 months away. He was sure to be cautious with COVID in his calculations as well which is on record as having some impact to sales but they are still able to trade through even in a NZ Stage 4 lockdown.
The last quarterly report showed the After Balance Date Events which highlighted that July revenues alone are almost larger than that of the previous quarter total already.
I believe @Jimmyspark213 may have broken down expectations for the September quarter revenues (excluding any potential new announcements) with an estimation of at least a 300% revenue increase for this upcoming quarter. Maybe post it here for everyone to see mate.
Feel free to add to this discussion. I am not ramping. I am interested in hearing other opinions but please don’t down ramp without any substance.
A lot of the above is now going to come down to the company’s execution.
I will also point out to those newbies who read this. The biggest money is made when you have the conviction to hold your winners. That is not financial advice but rather years of experience being shared to those that are here for a quick buck and constantly chasing their tails.
If you are reading this it means you have found a Micro-Cap company that ticks most if not all of the boxes which is quite rare. The only thing I have heard negative about NZS to date (other than complete unsubstantiated rubbish by nolife downrampers) is talk about a CR. Their supply is a non-issue, they have shown strength during COVID and anybody trying to compare this to other seafood companies haven't done their research properly. They arent selling seafood into Woolies or Coles. These guys have repositoned themselves to be a Marine Bio-Tech ready to capitalise on the NZ green image for the highly valued Nutraceuitcal market.
No-one can rule out a CR, but rest assured, if it does come, it is for good reason and will be done in a smart manner by a management team that is on the ball with significant skin in the game. That would then propel us onwards and upwards to greater heights.
Goodluck to those that try to time this stock. I know I wouldn’t want to be on the sidelines waiting for a lower re-entry if NZS team announce something new to the market. In the past 4-5 weeks I have seen multiple people left behind as this train well and truly has departed the platform.
Do your own research, don’t base your investment decisions off Hot Copper, there are a lot of sharks out there. If there are any gaps in your research, then contact management for an accurate response!
GLTA!
Stinger6
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