Why Candy Club is a buy, page-136

I've done my due diligence and I like what I see here. I'm in.

For those who are unaware and new to this thread, Candy Club Holdings Limited (CLB) is a US-based confectionery company that is focused on its fast-growing B2B wholesale business. CLB operates through two main distribution channels — traditional brick and mortar stores and e-commerce.

In short, CLB has 266M shares on issue, circa $5M cash in hand (as at Dec 2020), no net debt and reported CY19 revenue of $6.9M, up 567% YoY. Annual sales in the US confectionary market are US$40B. The company's target is US$50M run-rate revenue within 24 months.

We believe short term fair value is 6x estimated CY20 sales (~$12.3M AUD), based on the growth profile of the business, for a market capitalisation of $75M AUD, corresponding to a current fair value share price of 28c. If the US$50M run-rate revenue target is achieved, the company will be worth many multiples of this ($250M+ AUD MC minimum).

Will share some detailed reflections and a valuation over the coming weeks.

T.E.P.