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Nova Wellness - Highest Profit Margin among peers

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Publish date: Sun, 05 Jul 2020, 10:14 PM
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NOVA WELLNESS
 
Core Business
1) Pharmaceutical company.
2) Selling of supplements, functional food, skin care products.
3) Selling of hand sanitizer
 
Income Statement
Revenue RM8.7 mils+21%
PBT RM 3.6 mils +11%
Net Profit RM 2.7 mils +33%
1) Revenue increase due to higher sales contribution from house brand segment resulted from introduction of new products, increase in new customer, and overall sales from existing customer.
2) Operating expenses increase about RM 1.18 mils due to provision for doubtful debt. 
3) Increase in selling and distribution expenses about RM 0.93 mils due to higher accrual of marketing campaign expenses, upward of staff cost, accrual of sales commissions. 
 
Balance Sheet
Cash & cash equivalent = RM 33.6 mils with zero debt.
Placement additional RM 24 mils into money market fund, 
 
Cash Flow Statement
Cash from operation = RM 6.7 mils
Cash used for capex = (RM 6.3 mils)
Cash from government grant = RM 1.17 mils
Positive cash flow. 
 
Prospect
1) Gross profit margin of about 70%, much higher than peers which average about 30%.
2) Continue grow of house brand product sales. 
3) New factory completed on 8 May 2020. This will enhance the production capacity of the company by five times.
 
Summary
Nova forms a support at 0.625, we will continue to hold and accumulate this stock. 
 
Disclaimer
The above information solely based on personal opinion for research, discussion and educational purpose only. The above information is never intended to be a buy/sell call.
 
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Discussions
1 person likes this. Showing 2 of 2 comments

VenFx

Agree !
The best beneficiary of Sanitizer & supplement foods via its retailing chain/

2020-07-06 02:48

VenFx

Whereas,
Hexza the cola biz alike via its biggest ethanol manufacture facility in malaysia .Thus , the only cash com. benefit most from sanitizing boon !

2020-07-06 02:52

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