AGH is on track to deliver their timeline in terms of entering the German market in December 2020, with their line of medicinal cannabis products, and claim to be the first Australian company to make it to market there.
Peak Processing Solutions, their brand new Canadian processing facility, is racking up contracts at a clip roughly 4-5 times faster than they guided for. From current orders, they expect up to $4.65M CAD in revenue for their first year: all this within 2 months of receiving their Canadian license to operate as a processor of cannabis products. They have announced more orders are on their way, and I think it is reasonable to expect they are going to susbstantially outperform their targets in their first year.
AGH expects to break even in 2021, which I believe could make it the first Australian cannabis company to turn profitable: an event that would seriously raise the company's visibility and all-around mojo.
With operations in 4 countries (Australia, UK, Canada and Germany), and with its Australian home market possibly poised to make CBD products available without a prescription, 2021 is looking very, very favourable for AGH.
The company is currently rated as 35% undervalued by Morningstar. The share price at the time of writing is 0.48; Morningstar would see it at 0.72, and this without considering yesterday's news of Peak's order growth outperformance, and today's news of a green light for German sales to commence by January.
How quickly do you expect the market to rerate AGH?
Where do you expect the share price to be in June 2021?
Any ideas about what the company's next move might be once they have consolidated their current markets, and are ready to enter a new one? Or do you see them diversifying within their current markets, and putting new efforts into branding?
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