Now this is one to watch. Blackmores onboard as of today, Coles onboard since late June, and a pattern of strong exponential revenue before either of these behemoths were on-boarded.
Introduction:
Fiji Kava is a supplement/biotech company with a market cap of $14M, that sells a range of natural supplements for mood, anxiety, stress and sleeping aid, using the Fijian Kava root.
Kava has been used by Pacific Islanders for centuries and has traditional ceremonial origins.It is highly effective for mild anxiety, providing a feeling of slight euphoria and calmness, making it also useful as a sleeping aid. In a world where consumers are leaning away from over-prescribed and often more damaging than helpful SSRIs, opting for natural solutions, instead Fiji Kava is perfectly positioned for the biggest explosion in anti anxiety products we have likely ever seen.
Following Covid-19, mental health has remained a focus as many are struggling to see extended family and friends, have been placed in an enforced solitary confinement for weeks (aka lockdown) and many have lost their jobs - the demand has never been greater for natural alternatives for mood and anxiety.
The Growth Story BEFORE Coles and Blackmores Partnership:
The evident growth of FIJ revenue is a sight to be seen. A micro cap that has exponentially growing revenue, all before major partnerships are in place.
From their publicly traded inception in early 2019, FIJ have placed a focus on vertical integration for their production, greatly improving margins. They have also obtained Fijian rights to sustainably farm the Kava themselves. All these initial fixed costs are now complete, now directing attention to the market penetration in Australia, New Zealand, US and soon to be Hong Kong.
- Enter Coles and Blackmores.
Q3/Q4 MAJOR Revenue Catalysts:
In late June, Fiji Kava (FIJ) products hit the shelves of Coles, in 812 stores across Australia. The revenue from this placement is yet to be recognized on quarterly reports, with Q3 likely being the beneficiary of this initial revenue. One can imagine what this will do to the above graph, and what type of revenue we could expect. This in itself is a major catalyst for FIJ and once the market realizes the revenue that this sales channel is providing FIJ, a rerate will undoubtedly occur from the measly $14M it resides at today. Therefore marking a perfect entry point into FIJ as an attractive short term trade, 3-6 month holding period.
Although, it is only Australia's market being penetrated with this partnership.Which is where the Blackmores owned Bioceuticals partnership announced today is incredibly exciting for the unfolding growth story of FIJ. This grants access to international markets, namely USA. I imagine revenue will be recognized as of late Q3 and early Q4. For a miniscule $14M market cap company, to have landed two major partnerships like this within 3 months is commendable.
This following the previous five quarters of exponential growth, the Q3/Q4 recognized revenue from these partnerships will act as a major catalyst and transformation of FIJ.
- The Fiji Kava Capsule range currently available in Coles.
Management:
CEO/Founder: Zane Yoshida: 2010-2018: Founded South Pacific Elixirs, which has now become FijiKava (FIJ) a company producing a range of farm to shelf kava supplements and complementary medicines that are manufactured to HACCP/GMP standards and launched in various international markets under the TakiMai brand. These countries include, Australia, New Zealand, USA and Fiji.
COO: Simon Pothecary: 1996-2018: Held LEAD Sales and Brand roles in some of the biggest pharmaceutical companies in the world, namely Pfizer, GlaxoSmithKline and most recently CHIEF SALES OFFICER at Comvita Ltd. In terms of sales class in this industry, there isnt much more you could expect for a $14M company. This is positioned for fast global market penetration.
Notable Non-Executive Board Member: Nicholas Simms Ex-BUBS CEO: Nicholas headed BUBS as CEO from a $20M private insitution to an ASX300 company with a +$500M market cap. He is all too familiar with consumer goods and has the contacts required to assist FIJ enter global partnerships with other major distributors of health consumer goods. He is an asset to have in an advisory role.
Targets:
Over the coming week I will look at doing an indepth revenue analysis speculation thread, with a model built out following trends from previous 4 quarters and include revenue assumptions regarding these major partnerships. With blackmores onboard, in duo with Coles, I estimate a fair value of ~25c, representing a $25M market cap with strong revenue growth assumptions incorporated for the following four quarters.
I see a medium term target of 50c for Q2 2021, representing a market cap of ~$50M, upon expected further market penetration with major distributors in USA, EU and China.
As always, DYOR, not financial advice. Although I think we are onto something special here, and a perfect time for entry prior to Q3 recognition of revenue from these partnerships. GLTAH.
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