VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 15, 2016) - Naturally Splendid Enterprises Ltd. (TSX VENTURE:NSP)(OTCQB:NSPDF)(FRANKFURT:50N) ("NSP") is positioning itself to export healthy foods and value added natural formulations globally. The global functional, allergen-free, organic and other healthy foods market will push through the $1 trillion (EUR770 billion) mark for the first time in 2017, as consumer interest in preventing illness via foods snowballs, says Euromonitor International. According to NSP:
"We looked at the history of hemp and came to one clear conclusion - it was time for a radical change."
In consideration of today's remarkable sales figures, which the market obviously didn't expect, NSP's share price potentially offers an outstanding opportunity at the very moment.
With only 57.4 million shares issued and outstanding, NSP is currently valued at $15.5 million CDN. If the sales figures of the first two quarters are any indication for the last two quarters, NSP may bag total sales of $11.2 million CDN in 2016: A spectacular sales increase of 3,609% over 2015.
With an implied enterprise value ("EV") of $15.5 million CDN and projected sales of $11.2 million in 2016, NSP enjoys an EV/Sales multiple of only 1.4x.
According to data from New York's Stern University, the following sectors had EV/Sales multiples significantly higher than NSP's current multiple of 1.4x:
|Average of all sectors:
Therefore, when applying a conservative EV/Sales multiple of 2.65x, NSP's stock would trade close to $0.54 CDN/shares (+89% from current price). When applying a multiple of 5x, as being the case with drugs, NSP would be fairly valued at $0.96 CDN/share (+257% from current level). In case management succeeds in growing Q3/4 sales figures stronger than Q1/2, an even higher valuation appears plausible. As per today's news, NSP may exceed expectations again. The hemp/cannabis and healthcare sector is gaining momentum again, not only in North America but on a global scale, and as such an increased investor's interest is expected in the foreseeable future.
CEO Craig Goodwin said in today's news release:
"We are off to a good start for Q3. Having already secured a Purchase Order for $1,450,000 for Q3, Naturally Splendid is on pace to equal the sales performance of Q2. Our goal is to exceed our Q2 sales figures through increased export activity, increased retail sales, as well as securing additional clients and optimizing operations at POS / BPC. We are definitely pleased with the increase in our gross sales throughout our divisions. More importantly, we believe the Company is reaching the stage of being cash flow positive on a consistent basis. This is due in fact to not only the increased gross sales, but also increasing margins as scales of economy begin to show a positive effect on our bottom line. As the Company approaches being cash flow positive, we can begin to focus more attention and resources towards the lucrative omega markets globally with HempOmega® and also begin to focus attention on the positively evolving cannabinoid opportunities in the United States, specifically focusing on the Cannabidiol (CBD) markets."
According to today's news:
"Naturally Splendid is experiencing growth in gross sales in many of its divisions. The most significant growth has been in the export division where South Korean exports have exceeded initial projections by over 400% to date. However, the overall increase in gross sales can be attributed to several factors including Naturally Splendid's retail lines NATERA®, Chii™ and Pawsitive FX™ which are showing consistent growth in sales. As reported earlier, the Company is pleased to confirm that in Q1 2016 their majority owned subsidiary, POS / BPC Manufacturing Corp. ("POS / BPC"), completed the preparation/training work to begin normal manufacturing status at this facility and has begun manufacturing for multiple clients. The POS / BPC facility will add additional revenue to Naturally Splendid in 2016. The 12,000-square-foot POS / BPC Facility - which is managed for POS / BPC by POS Bio-Sciences - is positioned to offer commercial-scale custom processing solutions for biological materials, such as functional foods and natural health ingredients to a wide range of clients. POS / BPC came on line March 28, 2016 having spent Q1 completing significant upgrades to the facility. In Q2, the first quarter that POS / BPC has been operational, the facility grossed in excess of $390,000 and is expected to be cash flow positive in 2016. Management expects gross revenue for POS / BPC to increase in Q3 and Q4."
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In a 2013 Nutraceuticals World article it was reported:
"Omega production is forecast to grow a mammoth 32.8% annually in volume (15.1% in value) by 2018, by which time 3.3 million metric tons worth $9.1 billion will be produced. "Plant omega 3 production value is expected to grow twice as fast as marine during the next five years," Mr. Bender predicted. "As a result, by 2018, plant omega 3s will account for 52% of production value compared to 48% for marine. Plant omega 3s will benefit from consumers' desire to get away from animal based products."
Naturally Splendid is positioned to be at the forefront of this opportunity and intends to capitalize on this shift for omega sources.
Our success exporting to South Korea is just the beginning. The South Korean opportunity secures Naturally Splendid a foothold in the growing Asian health and wellness market and we are experiencing increased interest for our products in Asia since attending tradeshows as official Members of the Canadian Trade Delegation in Singapore and Seoul and more recently as official Members of the Premier's Trade Mission to Seoul, Manila and Tokyo, which was lead by British Columbia's Premier Christy Clark. The success that we have had in South Korea creates the opportunity to increase our exporting sales by expanding to additional countries not only in Asia but globally, as well as adding additional product offerings such as hemp protein, hemp oil and HempOmega®. However, we are not limited to just hemp products. We are pursuing numerous opportunities to introduce additional food products outside of hemp into our exporting offerings, utilizing in part the same successful product launch strategy executed with our shelled hemp seed hearts in South Korea."
About Naturally Splendid Enterprises Ltd. ("NSP"):
NSP is a multifaceted biotechnology company that is developing, producing, commercializing, and licensing an entirely new generation of plant-derived, bioactive ingredients, nutrient-dense foods, and related products. Naturally Splendid is building an expanding portfolio of patents (issued and pending) and proprietary intellectual property focused on the commercial uses of industrial hemp and non-psychoactive cannabinoid compounds in a broad spectrum of applications.
NSP currently has six innovative divisions:
(1) Natera® brand of retail hemp superfood products currently distributed throughout North America and Asia;
(2) Chi Hemp Industries Incorporated (Chii) is selling natural and organic hemp products through e-commerce;
(3) PawsitiveFX® brand of pet care products;
(4) Simlpi Plant-Based Ingredients Division of plant-derived bulk ingredients including patent-pending HempOmega®;
(5) The 12,000-square-foot POS / BPC Facility - which is managed for Naturally Splendid by POS Bio-Sciences - is positioned to offer commercial-scale custom processing solutions for biological materials, such as functional foods and natural health ingredients to a wide range of clients;
(6) Hemp-based cannabinoid nutraceuticals. The company's advanced technologies, industry expertise, and strategic partners allow for the creation of customized solutions with a consistent focus on quality and sustainability.
The company's advanced technologies, industry expertise, and strategic partners allow for the creation of customized solutions with a consistent focus on quality and sustainability.
June 17, 2016: Q&A from Stockhouse Publishing
February 2016: Peter Epstein Article Part 1
March 13, 2016: Peter Epstein Article Part 2
Naturally Splendid Video Introduction 2016
Naturally Splendid - TSX-VENTURE 50 - 2016
HempOmega™ Informational Video
Naturally Splendid Korean Purchase Order 2016
Lotte Home Shopping Launches Paleo-NATERA® in Korea
CEO Craig Goodwin Interview with SmallCap-Investor TV
NSP was very active in 2015, completing several acquisitions and initiating multiple new revenue streams. NSP is forecasting substantial growth in all of its divisions in 2016, and the company has already exceeded internal expectations early in 2016.
February 3, 2016:
NSP announced having received a $924,000 CDN Purchase Order for hemp food products from a Korean company.
March 31, 2016:
NSP announced having exceeded total 2015 gross sales by 250% in the first quarter of 2016.
May 4, 2016:
NSP announced its Purchase Orders exceeded $3 million CDN to South Korea.
May 18, 2016:
NSP announced to accompany Premier Christy Clark on trade mission to key markets in Asia.
June 20, 2016:
NSP secured an additional $1.45 Purchase Order for export (export Purchase Orders to date exceeded $5.7 million CDN in 2016).
This is a great opportunity to be looking into NSP at an advanced stage of the company's development. The company's flagship ingredient (HempOmega™) is commercializing and beginning to create new opportunities and new revenue streams for NSP.
This adds to the existing revenue streams the company has established already with Natera™, PawsitveFX™, CHII Hemp, Laguna Blends Inc.(client), and bulk export of plant-based ingredients/food products through Simpli Ingredients, NSP's bulk division.
NSP is also generating revenue through their majority owned POS-BPC (Bio-Processing Centre) located in Saskatoon, Saskatchewan, where NSP has multiple clients processing in the facility for a toll.
In 2015 NSP secured a CBD distribution agreement with from Medropharm, a Swiss supplier of high grade CBD (Cannabidiol) which NSP has already begun marketing in the USA. NSP also finalized the 51% acquisition of the POS-BPC (Bio-Processing Centre) a manufacturing facility in Saskatoon, Saskatchewan, a 12,000 square foot facility located on the university grounds, where the company can conduct extraction and formulation of its own products and technology, and also toll process for other client's requirements.
NSP also announced its first major purchase order last year for $100,000 CDN from Laguna Blends, which incorporates the companies Omega technology and is part of a $1.6 million sales agreement with Laguna Blends.
NSP announced at the end of 2015, that it finalized the acquisition of Chi Hemp Industries Inc., an online hemp company with over $300,000 CDN in yearly revenues that is cash flow positive today.
NSP announced in early 2016, it has entered into an (LOI) with the Coco's Pure Beverage Company, to co-develop a unique product line of coconut based retail products infused with HempOmega™.
On February 3rd, 2016, NSP announced a Purchase Order for hemp food products worth $924,000 CDN, with a South Korean based distributor (Korean Beauty & Health Care Co.). Delivery of the $924,000 CDN Purchase Order has been finalized as of the end Q1, March 2016.
NSP was recently pleased to announce that it has exceeded its total 2015 gross sales by +250% in the first quarter of 2016.
NSP announced on May 4, 2016, that its Purchase Orders to South Korea have exceeded $3 million CDN since February 3, 2016. The company also announced that it will be expanding its operations with a move to a larger facility in July of 2016.
On June 20, 2016, NSP announced it secured an additional $1.45 million CDN Purchase Order for export, and export Purchase Orders to date have exceeded $5.7 million CDN.
The company is projecting it can increase its revenues and build shareholder value, by obtaining new clients in the food/food ingredient, beverage, nutraceutical, cosmeceutical, pet food/pet care, and livestock feed industries.
NSP is a multifaceted biotechnology company developing, commercializing, producing, selling, and licensing an entirely new generation of hemp-derived, high quality, nutrient-dense Omega foods, nutritional food enhancers, and related products.
NSP and its partners are building an expanding portfolio of patents (issued and pending) and proprietary intellectual property focused on the commercial uses of Cannabis Sativa, industrial hemp, and cannabinoid (CBD) compounds in a broad spectrum of applications.
NSP is currently innovating in five related industries: nutritional biotechnologies, cannabinoid pharmaceuticals and nutraceuticals, and retail superfood and supplement consumer products under its NATERA™ brand, also wholesale hemp products sold via e-commerce through CHII Hemp Industries, and premium pet food and care products under its PAWSITIVE FX™ brand.
As well through hemp and plant-based bulk sales though NSP's Simpli Ingredients division, and plant to product processing through its majority owned POS Bio Processing Centre (POS-BPC).
1. HempOmega™ & Nutritional Biotechnologies (100% owned by NSP)
NSP is producing scientifically proven, functional plant-based Omega 3-6-9 ingredients. These plant-based Omegas directly solve major issues inherent in marine-sourced omegas, including bioavailability, environmental sustainability, taste, and smell. In addition, these plant-based omegas can be added to virtually any food as a powder, aqueous solution, or as an ingredient added to stand alone products, thereby markedly enhancing the nutrient value. NSP's plant-based omega offerings include HempOmega™, H2Omega™, ChiaOmega™, FlaxOmega™, CanolaOmega™, and AlgaeOmega™. Potential product categories include pet foods, body products, livestock feeds, cosmeceuticals, and CBD infused pharmaceuticals and nutraceuticals. Chickens that were fed HEMPOMEGA™ as an additive in their feed, had tests that produced the following highlight results: 527% increase in the omega-3 content of the eggs; 272% increase in the omega-3 content of the meat; lowered trans fats in the chickens by 5%.
2. POS-BPC Manufacturing Corp. (a Processing and Manufacturing Facility; 51% owned by NSP)
Based in Saskatoon, Saskatchewan NSP's POS Bio Processing Centre (POS-BPC) is the perfect platform for launching products that leverage the company's proprietary omega extraction and formulation technologies. POS-BPC operates its 12,000 square foot facility containing approximately 60,000 liters of tankage, a fractional distillation system, evaporation equipment, spray drying equipment, a ring dryer, and various other pieces of complementary and auxiliary equipment. POS-BPC is capable of processing a variety of products, including plant-based omega technologies such as Naturally Splendid's own HempOmega™. Additionally, the BPC facility is designed to produce plant-based extracts, tinctures, and dry ingredients in order to serve a wide variety of client requirements. NSP also has in place a strategic cooperation agreement with Nature's Health Products Canada Corp., a member of the POS Group of Companies based in Saskatoon. This important partner has been in business for over 35 years and has over 600 major customers worldwide. NSP has gained the ability to seamlessly coordinate entire plant-to product processes. From sourcing bio-active, plant-based ingredients to overseeing toll processing, formula development, and the creation of custom ingredient solutions, NSP offers its clients the convenience and advantages of a comprehensive, "one-stop" service provider.
3. Simpli Ingredients (100% owned by NSP)
Simpli Ingredients is NSP's wholesale ingredients division, specializing in hemp and plant based ingredients, which are globally and ethically source and processed in Canada in state of the art bio-sciences and dedicated hemp processing facilities in Saskatoon.
4. Naturally Splendid USA (100% owned by NSP)
Naturally Splendid USA is a wholly owned U.S. subsidiary of Naturally Splendid Enterprises Ltd. NSP-USA is a provider and distributor of products and ingredients derived from industrial hemp. They are dedicated setting new industry standards for sustainability, safety, and quality. NSP encourages an educated, scientific approach to the industrial hemp and cannabinoid industries to develop a clearly defined regulatory environment that will promote consumer safety and corporate accountability.
5. Cannabinoid Nutraceuticals (under development)
The potential value of the hemp crop for medicinal purposes is virtually undiscovered. Industrial hemp is known to be the best source of cannabidiol (CBD), which is known to provide relief from symptoms such as anxiety, stress, seizures, etc. It has been used to treat epilepsy, convulsions and inflammation. In partnership with Boreal Technologies and Full Spectrum Laboratories, NSP is bringing to market a comprehensive suite of CBD-related market-disruptive technologies, including CBD water solubility (a major breakthrough that facilitates major advances in the production of CBD-based medicines and supplements).
6. NATERA™ Superfoods (100% owned by NSP)
The NATERA™ line was launched in 2013. NATERA™ features a broad spectrum of hemp based food products including flavoured hemp seed and protein powders. NATERA™ products are available in retail outlets in Canada and the US.
7. Pawsitive FX™ Pet Care (100% owned by NSP)
Pawsitive FX™ is a Canadian company dedicated to improving the health and happiness of your furry family members. The Pawsitive FX™ line launched in 2015 and features a wide of range of pet care products including a line of nose and paw balms, and will be launching a line of all natural shampoos. NSP proudly ensures that their products use 100% natural ingredients that are not only healthy and safe for pets, but that are also sustainable for the environment. Pawsitive FX™ products are currently available in retail outlets in Canada, and will be expanding into the US market.
8. CHII - Chi Hemp Industries Inc. (100% owned by NSP)
Chi Hemp Industries Incorporated (CHII) is an International Limited Liability Corporation physically headquartered in Victoria, British Columbia, Canada, with warehousing operations in both Victoria, Burnaby, Winnipeg, Manitoba, Canada. This corporation is in the business of growing, supplying, facilitating and diversifying the commercial hemp industry, while encouraging a 100% sustainable approach to all aspects of the agriculture industry and commerce associated with it. CHII was incorporated in May of 1998 and has been actively working to promote the Canadian hemp industry ever since through a grassroots movement to re-educate the public on the many wonderful and beneficial virtues of the hemp seed plant. NSP has worked tirelessly at thousands of live events communicating one on one with tens of thousands of people from all over the world.
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The author(s) who produced this research note, Mike Rodgers, are/is employees of SkyCapitalReport. Naturally Splendid Enterprises Ltd. has not been visited by the authors. SkyCapitalReport and/or its employees and/or directors and associates hold equity positions in Naturally Splendid Enterprises Ltd. and reserve the right to acquire or dispose of such positions in the future. SkyCapitalReport has, or will, receive a cash compensation from Naturally Splendid Enterprises Ltd. to feature the company.
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Naturally Splendid Enterprises Ltd. is a Canadian company with a global focus on redefining hemp and CBD via bio technology.