Comvita - CVT

[Rawz]

CVT been trading basically $3.10 to $3.50 for a year now.

Due a leg up?

[winner69]

Is Comvita a design company these days

https://www.nzx.com/announcements/377294

[sb9]

CVT been trading basically $3.10 to $3.50 for a year now.

Due a leg up?

Potentially tomorrow's result should put the price in $4 range, sick of watching it in the $3s for such a long time...

[TheJudge]

Many have watched ATM fall from $21 to $6 in a few months. I wonder if the reverse could happen to CVT? Jump to $6 tomorrow and then grind up to $21 in 12 months. I guess we will know by 10:05 am Good luck.

[Balance]

Many have watched ATM fall from $21 to $6 in a few months. I wonder if the reverse could happen to CVT? Jump to $6 tomorrow and then grind up to $21 in 12 months. I guess we will know by 10:05 am Good luck.

Haha - hope so!

Realistically, the blue skies scenario for manuka honey & the hyper valuation associated with it are long over. Comvita will do well though over time - share price will follow.

[Joshuatree]

Mānuka honey battle: New Zealand, Britain, Australia in trademark fight
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12443

In my opinion NZ should win this. If this happens will be enormous for NZ Manuka and of course the leader Comvita..

Last I read (can't find it) it's looking better and better that we will win the trademark fight,if so this will be the rocket to the s/p.

[Mel]

Many have watched ATM fall from $21 to $6 in a few months. I wonder if the reverse could happen to CVT? Jump to $6 tomorrow and then grind up to $21 in 12 months. I guess we will know by 10:05 am Good luck.
Wishful thinking but hopefully a reasonable increase (50 cents) would be good start!

[Balance]

Last I read (can't find it) it's looking better and better that we will win the trademark fight,if so this will be the rocket to the s/p.

https://www.mondaq.com/australia/trademark/1101974/australian-trade-mark-decision-a-bugbear-for-new-zealand-honey-producers

First ruling in NZ’s favour a few years ago that manuka honey can be trademarked.

Now comes the second part :

https://www.newsroom.co.nz/manuka-honey-dispute-whats-in-a-macron

[Shareguy]

Thanks balance, great article. Lets hope it’s going to be a good one today.

[sb9]

Impressive set of numbers and cool slides in investor presentation pack.

[Balance]

Impressive set of numbers and cool slides in investor presentation pack.

Unlike ATM, CVT is executing its reset & transformative strategy (of shifting over-reliance on daigou sales & harvest vagaries) - successfully.

Turnaround is massive and management is upbeat about delivering on expectations.

Underpromise & overdeliver - as opposed to the old Overpromise & underdeliver CVT.

[percy]

Long term the business model is getting better with their strong growth in digital channels.
2022 they state "Digital to at least 38% of revenue."
Well on their way to achieving their target of 50%.

[Shareguy]

Impressive result. Will soon have cash in bank and be debt free. Margin improvement and NPAT result with large increase in marketing expense was a standout for me. I think the market will like this result. Great to see a CEO with a plan who has achieved the milestones. Was expecting a 3 cent dividend not four cents.

[sb9]

Impressive result. Will soon have cash in bank and be debt free. Margin improvement and NPAT result with large increase in marketing expense was a standout for me. I think the market will like this result. Great to see a CEO with a plan who has achieved the milestones. Was expecting a 3 cent dividend not four cents.

They've truly turnaround under Banfield direction and become transformational. Kudos to management, let the journey to $4 and beyond begin..

[Biscuit]

They've truly turnaround under Banfield direction and become transformational. Kudos to management, let the journey to $4 and beyond begin..

Will get past $4 today at this rate....

[sb9]

Will get past $4 today at this rate....

Should've been past $4 even before today's results on back of upgrades they kept issuing this year..

[Joshuatree]

Great stuff fellas .S/P responding $3.70 atm.

[Biscuit]

Should've been past $4 even before today's results on back of upgrades they kept issuing this year..

There has been steady accumulation going on since middle of last year but the share price been going nowhere as weaker holders sell out.

[Balance]

There has been steady accumulation going on since middle of last year but the share price been going nowhere as weaker holders sell out.

That’s how markets work - wealth transfer from the impatient and nervous, to the patient & experienced.

I see a lot more upside now for Comvita sp - China is a huge market and Comvita’s strategy is obviously working.

Plenty of margin improvements to come too.

[Biscuit]

That’s how markets work - wealth transfer from the impatient and nervous, to the patient & experienced.

...

Isn't that a great system!

[winner69]

Solid result but Operating Cash Flow down $15m on pcp (even with a $11m inventory reduction) is a bit disappointing.

Broken a multi year trend of ever increasing cash flows ….hope not getting back to the habit of struggling to generate cash out if a growing business.

[Habits]

A whopping 4cps divie... wow! (Sarc)

[winner69]

EBITDA to grow by 6% to 17% is guidance

Suppose current trading at 26 times trailing eps and under 20 times forecast eps is reasonable for a ‘company transforming itself’

[Biscuit]

Solid result but Operating Cash Flow down $15m on pcp (even with a $11m inventory reduction) is a bit disappointing.

Broken a multi year trend of ever increasing cash flows ….hope not getting back to the habit of struggling to generate cash out if a growing business.

Revenue is down though so are they really a growing business?

[nztx]

Revenue is down though so are they really a growing business?


Yeah / Nah .. I like to see more honey in any pot I'm looking at buying :)

and at least 2 years figures to confirm that any old tricks & bad habits are well & truly buried

[nztx]

A whopping 4cps divie... wow! (Sarc)


seem to have missed the imputation credits .. 1.556 cps must be worth a mention :)

others have managed none multiple times ..

[Shareguy]

Craigs have placed a target price of $4.20 and outperform rating with forecast y23 pe of 16

[winner69]

Craigs have placed a target price of $4.20 and outperform rating with forecast y23 pe of 16

That gives us some comfort ….even if they are just following the share price up.

[Beagle]

EBITDA to grow by 6% to 17% is guidance

Suppose current trading at 26 times trailing eps and under 20 times forecast eps is reasonable for a ‘company transforming itself’

Comvita has a really shocking track record of huge misses with its guidance and a track record of one good year being followed by a very bad year(s).
For my money, this is still an agricultural stock with all the risks associated with agriculture, (weather, drought, excess rain, disease, pestilence etc) and a healthy dose of skepticism needs to be applied to any forecast they make along with a realization of the risks applicable with argi stocks.

My yardstick for agri stocks is a no growth PE of 11.5 and adjust from there for their history and any other known factors and risks.

Paying a trailing PE of 26 for a stock with their track record is not for me.

[Balance]

That gives us some comfort ….even if they are just following the share price up.

Craigs have serious firepower when it comes too supporting their analysts' valuations and recommendations - FUM is over $25 billion and I understand discretionary FUM is over $5 billion of that.

They are only allowed to invest in stocks where their analysts have a BUY or HOLD recommendation.

CVT is a Craigs house broker stock to boot.

[Monarch]

Revenue is down though so are they really a growing business?

"Revenue in constant currency increased by 1.5% as strong performance in its focus growth markets of China +31% and USA +23% offset material headwinds in its Australia, New Zealand (ANZ) and Hong Kong segments. Underlying revenue grew 5.4%*."

[Biscuit]

"Revenue in constant currency increased by 1.5% .....

Hmmm, so not really a growing business?

[Balance]

Hmmm, so not really a growing business?

CVT has been rationalising its product lines so that the focus is on profitable sales, not growing sales only.

Growing sales for sales sake is the strategy of a cancer cell - ultimately kills the host.

[Biscuit]

CVT has been rationalising its product lines so that the focus is on profitable sales, not growing sales only.

Growing sales for sales sake is the strategy of a cancer cell - ultimately kills the host.

Yes, I totally agree with the strategy so far. It's still a small holding for me at moment. Added more recently but not convinced about their ability to deliver consistent growth in profit.

[Shareguy]

I can’t find anything on the partnership with TGH in the UK. Not listed as a product either that they sell on TGH website?

[sb9]

Share buy back of upto 350,000 shares should see further gains to sp, hopefully closer to $4 mark.

[Shareguy]

Agree sb9. Would of thought it would’ve been over $4 by now considering the result and broker upgrades. It was over $13 .

[Shareguy]

Good to see price moving up today and buyback does not start till the 6/9

[BlackPeter]

Good to see price moving up today and buyback does not start till the 6/9

I'd prefer they buy back cheap ... just saying :):

[winner69]

Good to see price moving up today and buyback does not start till the 6/9

These small share buybacks to hand out to staff anf suppliers haven’t had much impact on share price in the past

But hoping is good

[Shareguy]

From Craigs recent research note:
CVT made good progress toward these targets in FY21 and following today's result, we upgrade to Overweight with a $4.20 target price, for 6 key reasons: (1) we forecast an NPAT & EPS CAGR of 19% p.a. over the next four years, yet our forecasts still remain well below company targets (see pg 7), and leave CVT's forward P/E multiples vs. growth on our numbers looking modest (20x FY22F and 16x FY23F), (2) CVT has shown good execution toward its targets this result, with critical digital sales lifting an impressive +41% and +37% in CCy terms for China and North America respectively, (3) this sales growth is converting efficiently to margin even despite the increased marketing costs, with net segment contributions from China and North America lifting +25% and +18% CCy, (4) we think segments that are currently struggling (HK, ANZ) will eventually recover as vaccination rates lift and borders reopen, (5) the downside risk from a poor harvest appears capped as a result of CVT's new harvest model - the apiary division broke even despite one of the worst harvests on record (370 tonne honey vs. 700 tonne in pcp and 600 tonne in a normal year), and (6) CVT's balance sheet is in great shape and almost debt free ($4.6m net debt).
Solid FY21 result, strong FY22 guidance issued:
CVT reported NPAT of $9.5m for FY21, which was a touch ahead of CIPe ($8.9m), and much improved on the -$9.7m loss, including impairments, reported in FY20. The company has guided to FY22 EBITDA of $27m-$30m, a 12% lift at the midpoint on the $25.5m reported in FY21. Dividends have been reinstated with 4cps announced for FY21. CVT also signalled an increase in capex going forward (IT spend, plantation manuka, growth initiat

[Joshuatree]

Cheers looking good.The Rocket will be the courts deciding that thievin Oz will have to call it's teatree ,TEATREE:eek2::t_up:

[percy]

https://www.nutraingredients-asia.com/Article/2021/08/04/Legal-buzz-Australia-takes-to-courts-fight-back-against-New-Zealand-s-manuka-honey-trademark-attempt

[Shareguy]

Great article Percy. This will be a game changer for NZ and material for CVT. Can’t see how Australia can win this.

[percy]

Great article Percy. This will be a game changer for NZ and material for CVT. Can’t see how Australia can win this.

Let's hope you are right.
Maybe they should call their honey "Ngooka" honey as Ngooka is the Aboriginal name for honey.according to Google?

[Getty]

So MAnuka must be the mother of all Ngooka?

[Shareguy]

https://www.theguardian.com/world/2021/sep/04/new-zealand-and-australia-prepare-to-do-battle-again-over-treasured-and-lucrative-manuka-honey

[sb9]

The story keeps getting better and better.

[winner69]

The story keeps getting better and better.

...and as we should know by now the story is a better guide to value than fundamentals

[percy]

...and as we should know by now the story is a better guide to value than fundamentals

Off course the story keeps getting better.
"Our David" is the best story teller in the country.
Learnt his trade well at Methven.
Why do a one page presentation when "our David" can pad it out to over 50 pages.!.
And it really works.......................lol.

[Balance]

Off course the story keeps getting better.
"Our David" is the best story teller in the country.
Learnt his trade well at Methven.
Why do a one page presentation when "our David" can pad it out to over 50 pages.!.
And it really works.......................lol.

And the good story gets an additional chapter :

https://www.nzx.com/announcements/378586

Excerpt : "Comvita, global market leaders in Mānuka Honey, are delighted to announce a strategic partnership with Caravan, a Joint Venture with entertainment and sports agency, Creative Artists Agency (CAA).

Central to this partnership is the formation of a celebrity-backed lifestyle brand, using the natural healing properties of Mānuka Honey and Propolis for topical use."

Makes sound strategic sense to get more celebrity endorsements (free endorsements from Venus Williams & Novak Djokovic were great) as well as diversify market more into US & Europe.

[BlackPeter]

Sometimes it is interesting to look back in ones records.

Is it really already five years that Comvita signed this amazing MoU with China resources Ng Fung? Share Price at that stage above $10 and annual revenue (FY2016) of $202m;

https://www.nzx.com/announcements/291306

They talked at that stage (at the AGM) as well about doubling their revenue in 5 years (which would have been north of $400m in 2021). Talk is cheap, isn't it?

Well, we know how the story went. Annual revenue in 2021 actually was $192m (i.e. it did shrink, not rise over five years) and now it is the Americans who are supposed to pump the company fortunes up ... they must love these joint ventures ... just teach the Americans how they taught the Chinese ...

Lets hope this time is different, shall we :):

Discl: I had recently a wee stake in Comvita, but sold out after the AGM, not convinced by the execution of their health strategy and didn't like their (Rest of - LOL) Asia strategy.

Anyway, good luck to holders.

[Rawz]

Sometimes it is interesting to look back in ones records.

Is it really already five years that Comvita signed this amazing MoU with China resources Ng Fung? Share Price at that stage above $10 and annual revenue (FY2016) of $202m;

https://www.nzx.com/announcements/291306

They talked at that stage (at the AGM) as well about doubling their revenue in 5 years (which would have been north of $400m in 2021). Talk is cheap, isn't it?

Well, we know how the story went. Annual revenue in 2021 actually was $192m (i.e. it did shrink, not rise over five years) and now it is the Americans who are supposed to pump the company fortunes up ... they must love these joint ventures ... just teach the Americans how they taught the Chinese ...

Lets hope this time is different, shall we :):

Discl: I had recently a wee stake in Comvita, but sold out after the AGM, not convinced by the execution of their health strategy and didn't like their (Rest of - LOL) Asia strategy.

Anyway, good luck to holders.

CVT really did one over on Ng Fung..? 2million shares at 10 bucks. Well done CVT

[BlackPeter]

CVT really did one over on Ng Fung..? 2million shares at 10 bucks. Well done CVT

I guess this is as well a way to see it. Question is - is it sustainable to sell overpriced shares promising the moon and the sun but delivering so little?

But hey - this used to be 5 years ago ... punters have short memories ;):

[bottomfeeder]

And the good story gets an additional chapter :

https://www.nzx.com/announcements/378586

Excerpt : "Comvita, global market leaders in Mānuka Honey, are delighted to announce a strategic partnership with Caravan, a Joint Venture with entertainment and sports agency, Creative Artists Agency (CAA).

Central to this partnership is the formation of a celebrity-backed lifestyle brand, using the natural healing properties of Mānuka Honey and Propolis for topical use."

Makes sound strategic sense to get more celebrity endorsements (free endorsements from Venus Williams & Novak Djokovic were great) as well as diversify market more into US & Europe.

Ho hum, anything for an announcement. Has market been moved by this, up one cent.

[sb9]

Solid Q1 performance despite lockdown, well one CVT. Can we get to $4...+

[winner69]

Solid Q1 performance despite lockdown, well one CVT. Can we get to $4...+

They said ‘strong’ …better than ‘solid’ eh

[sb9]

They said ‘strong’ …better than ‘solid’ eh

For sure, could've been another $4Mln more but for lockdown..

"This was despite $4m of goods scheduled for delivery in September being impacted by Covid related shipping delays (will be invoiced in October)."

[Rawz]

For sure, could've been another $4Mln more but for lockdown..

"This was despite $4m of goods scheduled for delivery in September being impacted by Covid related shipping delays (will be invoiced in October)."

It's a bit confusing... the revenue includes the delayed shipments but the EBITDA doesnt?? Or does one assume the EBITDA growth does include the delayed shipments because the revenue does? Would they do that even though its not invoiced?

Not much growth in top line including the delayed shipments.. covid doing its best to slow them down.


This was despite $4m of goods scheduled for delivery in September being impacted by Covid related shipping delays (will be invoiced in October). Including these delayed shipments, revenue was improved by 4.5%.

[winner69]

It's a bit confusing... the revenue includes the delayed shipments but the EBITDA doesnt?? Or does one assume the EBITDA growth does include the delayed shipments because the revenue does? Would they do that even though its not invoiced?

Not much growth in top line including the delayed shipments.. covid doing its best to slow them down.

I reckon ebitda doesn’t include the $4m sales not invoiced

The sales growth does include the $4m so at face value stuff all growth ……but is compared to a ‘strong pcp’

One thing …modest sales growth but strong ebitda growth means higher margins ….that’s good


Just need to be last years amazing 11/11 sales and it is really hunky dory

[Balance]

CVT into a nice earnings upgrade trajectory. More to come over 2022.

[Rawz]

Why is it 'especially encouraging' that they increased brand investment by 50% but only increased rev 4.5% :confused:

[winner69]

Why is it 'especially encouraging' that they increased brand investment by 50% but only increased rev 4.5% :confused:

Increased brand investment means higher expenses …..so ebitda could easily have been lower than pcp on stuff all sales growth.

Investment in brands takes a little while to flow through to top line as well as bottom line

Be patient …things going well

[Rawz]

Increased brand investment means higher expenses …..so ebitda could easily have been lower than pcp on stuff all sales growth.

Investment in brands takes a little while to flow through to top line as well as bottom line

Be patient …things going well

Oh yes of course. Thanks W69.

Hopefully the brand investment pulls through to higher than 4.5% revenue increase in time.

[Shareguy]

A profit upgrade is coming by the look of it. Still well off the 5 year high of $11.40. Craigs currently have a outperform rating at $4.20

[winner69]

Full year operating EBITDA guidance is maintained at between $27M and $30M.

Not much higher than the $25,5m last year

Upgrade at next weeks ASM?

[Muse]

Full year operating EBITDA guidance is maintained at between $27M and $30M.

Not much higher than the $25,5m last year

Upgrade at next weeks ASM?

maybe but if I were management I'd hold off - one great quarter under the belt 3 more to go in a business with seasonal fluctuations. While obviously I'd like the price to pop I'd rather continued nice affirmations like this in lieu of an upgrade until management had absolute conviction. and then surpassing that guidance. Kind of the track record Scales Corporation have going. I hate yo yoing.

[Balance]

maybe but if I were management I'd hold off - one great quarter under the belt 3 more to go in a business with seasonal fluctuations. While obviously I'd like the price to pop I'd rather continued nice affirmations like this in lieu of an upgrade until management had absolute conviction. and then surpassing that guidance. Kind of the track record Scales Corporation have going. I hate yo yoing.

CVT imo has enough earnings tucked away to deliver one earnings upgrade after another.

Name of the game when companies are going through an upgrade cycle.

[pg0220]

maybe but if I were management I'd hold off - one great quarter under the belt 3 more to go in a business with seasonal fluctuations. While obviously I'd like the price to pop I'd rather continued nice affirmations like this in lieu of an upgrade until management had absolute conviction. and then surpassing that guidance. Kind of the track record Scales Corporation have going. I hate yo yoing.
I like it because it also lets me keep my money there for a period of time so that I don't need to sell shares at profit at a shorter time and I can avoid being trapped as a "trader" ;). With my such a small holding ird won't even give a care though haha

[Muse]

I like it because it also lets me keep my money there for a period of time so that I don't need to sell shares at profit at a shorter time and I can avoid being trapped as a "trader" ;). With my such a small holding ird won't even give a care though haha

I hear ya. Bloody IRD - if they want to tax capital gains then we should introduce a capital gains tax. and if not hands off.
and because of that I am very christian about my investing. Long term, put in the bottom drawer, collect the divs, and don't sweat the market.
Wait: maybe the IRD are doing us a favour because those all sound like sensible things to do.

[Shareguy]

Agm next Wednesday. We might see the first upgrade for the new year. Not long to wait.

[Shareguy]

Great article https://www.newsroom.co.nz/hive-to-home-comvitas-tough-turnaround-road?amp=1

[Mel]

Great article https://www.newsroom.co.nz/hive-to-home-comvitas-tough-turnaround-road?amp=1
Thanks for sharing, a worthwhile read

[percy]

Great article https://www.newsroom.co.nz/hive-to-home-comvitas-tough-turnaround-road?amp=1

I really enjoyed it too,so also thanks for sharing.

[Shareguy]

Will be interesting to see if the daigou channel has been good for CVT like it has for Bubs on the asx, which has also boosted A2 share price.

[sb9]

Will be interesting to see if the daigou channel has been good for CVT like it has for Bubs on the asx, which has also boosted A2 share price.

They may provide more colour next Wed at the time of ASM and by the way thanks for that nice article, very compelling read for shareholders or those keen to join.

[Biscuit]

Great article https://www.newsroom.co.nz/hive-to-home-comvitas-tough-turnaround-road?amp=1


I wonder how true is the oft-repeated idea that consumers want to know the "origin" and "story" behind the products they are consuming. I guess it must be true as all the marketing gurus say the same thing. But I've spent some time in China and those guys literally eat anything. Also, when it comes to health products, aren't they the world's biggest consumers of endangered animal parts?

[Shareguy]

Having a read through AGM presentation. Apart from Q1 up 10 percent on PCP. Also states material opportunities being explored. Exciting and looks good for a upgrade .

[kiora]

https://stocknessmonster.com/announcements/cvt.nzx-381307/
Inventory only down 10%
Stock turn still only 1.9 times
What is not known and likely a baddy is the stock turn on their low value honey. From others I have hear it can't be sold as no market for it. Market value of this honey $3/kg?. What is it valued in CVT books at? What % of inventory is it?
Key milestones
730 bps increase in GP
Looking forward
150 bps improvement in GP (second half weighted)
Inventory & net debt

• Inventory reduced by $11.7m vs. 30 June 2020
• Reduction in non-Mānuka honey inventory
holding through bulk sales
Share of Revenue
2020 Bulk honey 6%
2021 Bulk Honey 7%

[Shareguy]

On conference call. Chairman says good times ahead for CVT.

[winner69]

No profit upgrade today

Suppose we have to wait longer for that

As $27m for F22 isn’t much more than $25.5m in F21

[Shareguy]

I missed a good part of the conference call . Was there any mention of any improvement in the Daigou Australian/Nz market? Overall nothing new since the Q1 update. I guess a little early after only 3 months for a profit upgrade.

[Shareguy]

Chair Brett Hewlett was asked about the company’s share price, which is currently $3.75, having remained largely static over the year despite the positive full-year earnings announcement.
“The one thing that keeps me awake at night is that our share price poorly reflects the true capability of this organisation,” Hewlett said.
“We just have to just focus on business fundamentals and be ... focused on improving earnings growth as well as we can, while also investing in our brand story – there’s value to be had from CVT.”

[winner69]

Chair Brett Hewlett was asked about the company’s share price, which is currently $3.75, having remained largely static over the year despite the positive full-year earnings announcement.
The one thing that keeps me awake at night is that our share price poorly reflects the true capability of this organisation,” Hewlett said.
“We just have to just focus on business fundamentals and be ... focused on improving earnings growth as well as we can, while also investing in our brand story – there’s value to be had from CVT.”

That’s one reason why they got the PR people to co-opt the series of articles in Newsroom linked above (otherwise known as a content series)

Good move to get more punters interested in investing in Comvita

Good move

[Shareguy]

Another great article. Well worth a read.

https://www.newsroom.co.nz/multi-million-dollar-manuka-industry-faces-mandatory-tests?amp=1 (https://www.newsroom.co.nz/multi-million-dollar-manuka-industry-faces-mandatory-tests?amp=1)

[winner69]

Another great article. Well worth a read.

https://www.newsroom.co.nz/multi-million-dollar-manuka-industry-faces-mandatory-tests?amp=1 (https://www.newsroom.co.nz/multi-million-dollar-manuka-industry-faces-mandatory-tests?amp=1)

Yes, great article' Comvita doing a good PR job ... more to come

[Muse]

No profit upgrade today

Suppose we have to wait longer for that

As $27m for F22 isn’t much more than $25.5m in F21

Patience winner, patience!

[Shareguy]

According to asx update demand for Bubs infant formula has surged in the Daigou channel up to 6.5 times on prior year. And up 265 percent quarter on quarter. This has got to be good news for CVT as Australia re opens. I also hear that the Manuka season looking good.

[Shareguy]

I’m thinking of topping up. Be interested in your thoughts?

[percy]

I’m thinking of topping up. Be interested in your thoughts?

After reading pages 6 to 9 of SEK's recent presentation, I decided to sell my CVT and recycle the funds into SEK,as their growth and dividends looked a lot healthier than CVT's.

[BlackPeter]

I’m thinking of topping up. Be interested in your thoughts?

Actually - I sold out after reading their Rest of Asia strategy earlier this year (I think it was in their FY presentation), i.e. I can't sell you mine anymore :): Still - hype may or may not lift them at some stage and if somebody can sell the Chinese that Manuka honey is better than deer penis, than all bets are off, but otherwise I think they are just another boring agricultural company on an already rather high PE.

[Shareguy]

Craigs have a PE YE23 of 16. Chairman says good times ahead. First quarter earning up 10 percent. Good chance of an upgrade I think. Cash in bank this year with no debt and $80m of product. So on that basis I’m in..

[Habits]

Actually - I sold out after reading their Rest of Asia strategy earlier this year (I think it was in their FY presentation), i.e. I can't sell you mine anymore :): Still - hype may or may not lift them at some stage and if somebody can sell the Chinese that Manuka honey is better than deer penis, than all bets are off, but otherwise I think they are just another boring agricultural company on an already rather high PE.

Hi BP I hate to bring up your FBU comments when they were around 3 to 4 dollars, it was a similar frame of mind though.

[Balance]

Hi BP I hate to bring up your FBU comments when they were around 3 to 4 dollars, it was a similar frame of mind though.

It is very helpful imo to have dissenting opinions about stocks and what they are likely to head to.

It is also very helpful for all posters to observe who are making the right or wrong calls, and take heed accordingly.

That's what I do and it has made me heaps and save me heaps.

[BlackPeter]

Hi BP I hate to bring up your FBU comments when they were around 3 to 4 dollars, it was a similar frame of mind though.

Absolutely - nobody can predict the future, not me and not even you!

The difference between the two of us is that I do understand my and any humans limitations about predicting the future, while you obviously don't :p; I don't try to predict the future, i.e. you are just demonstrating your inability to read and digest posts ...

I did point to some risks with FBU and I do point to some observations here; Obviously - there are always risks and there are always opportunities, which one of these are winning is up to the future and to a degree up to the whim of the market.

Anyway - I tend to get it right more often than I get it wrong ... and this is all what counts. If you can say the same about your investing skills, than you should be happy instead of trying to put others down.

[Shareguy]

https://www.apiaristsadvocate.com/post/honey-a-winner-in-uk-trade-deal?fbclid=IwAR2Idhp0Ox70d3jmfe6f-kcf3nJrSMIc6tFF9HFvT8_V5LjU6L-CAGxBwNI

Interesting article. Uk not currently a big market for CVT. 16 percent to 0

[Balance]

https://www.apiaristsadvocate.com/post/honey-a-winner-in-uk-trade-deal?fbclid=IwAR2Idhp0Ox70d3jmfe6f-kcf3nJrSMIc6tFF9HFvT8_V5LjU6L-CAGxBwNI

Interesting article. Uk not currently a big market for CVT. 16 percent to 0


And knowing our exporters, they will pocket part of the tariff erased by the UKTA. Improvement in the margin on the way.

[Rawz]

CVT had a halloween snap deal on last night. Buy an item and receive a second for free. Got myself 2x 500g manuka honey tubs for the price of 1.

50% off essentially. Bet they moved some product! Cant be good for margins thou.. i guess Briscoes does it all the time and they make heaps of money. all good

[TheJudge]

CVT will report on Singles Day 11/11 sales. Record sales for CVT last year. Assuming the same or slightly better sales this year could see the SP return to $3.80 or even higher. I purchased my first jar of CVT honey recently and although expensive I'd never go back to cheapies from the supermarket. At $30-$40 they also make great gifts for extended family for Christmas. 🐝

[nztx]

The inside on what's happening within the Honey industry

https://www.nzherald.co.nz/hawkes-bay-today/news/local-focus-boom-to-bust-manuka-honey-producers-cant-sell-some-of-their-stock/JSMTPUKS5I3NOI45DD3HJ6NCFU/

Local Focus: Boom to bust? Mānuka honey producers 'can't sell' some of their stock



Havelock North third-generation beekeeper John Berry says the quest for more mānuka honey is a cost borne by all beekeepers.

"There are about half-a-million hives too many in New Zealand at the moment," he said.


This guy has been in the industry for a long time


The prices for honey have come back considerably, including for mānuka despite all the hype you hear.



"There are hundreds of tonnes of mānuka sitting in beekeepers' sheds at the moment, that they can't sell."



"Everybody had their areas, everybody behaved themselves, but when the corporates moved in they just dumped thousands of hives right beside everybody else.

"I've got a yard down Tikokino I run 16 hives on. I came there one day and two paddocks away there were 180 hives. It just doesn't work."

Rare New Zealand's owners have been in the honey industry for seven years.

They left another mānuka-chasing Hawke's Bay honey company to start their own.


IMO .. safer to sit on the side line watching, if this is any indication of whats going on ;)


Discl: Currently not a holder of either CVT or the other Honey outfit MEE

[tommy_d]

I purchased my first jar of CVT honey recently and although expensive I'd never go back to cheapies from the supermarket.

what was the difference you noticed that made the comvita honey stand out?

[TheJudge]

The smell, consistency but mainly the taste. It is sweet but not sugary sweet. I really look forward to my one teaspoon a day on nice toast. A real treat. In addition the super powers of feeling awesome.

[TheJudge]

The smell, consistency but mainly the taste. It is sweet but not sugary sweet. I really look forward to my one teaspoon a day on nice toast. A real treat. In addition the super powers of feeling awesome.

This is how it has worked for me. Finally purchased the most expensive jar of honey I have ever bought in my life. I suspect COVID lockdown had something to do with it and I thought stuff it, kind of just wanted to buy something. Initial thoughts where I'll never do that again. However, I did. However, this time I bought 3 jars. Now I intend to buy for my extended family for Christmas. I'm sure they will love it and buy it for their friends and extended family next Christmas.

I don't think we can underestimate the power of COVID, the need to spend and to treat ourselves so why not buy something that tastes good and should be good for you.

That is why I'm forecasting even more sales for Singles Day, 11/11 this year.

I guess we'll see once the report comes out. 🐝

[TheJudge]

In the same article Apiculture New Zealand chief executive Karin Kos said "The global retail honey market is forecast to grow 30 per cent in the next five years [from $11.1bn to $14.6bn] and mānuka honey is a nascent category globally and has more room to grow. To the end of June honey exports totalled $482 million, up from just $98m in 2010".

I have more confidence in Karin's forecast than John's.

[TheJudge]

Alibaba posts record sales - https://edition.cnn.com/2021/11/10/business/china-singles-day-intl-hnk/index.html.

Posted 2020 on November 25 Comvita reports strong China market sales during 11:11 event (Singles Day)

Just saying a good time to pick up some discounted shares. Currently $3.55. I'm forecasting back to $3.80 on 11/11 news. 7% increase. Go CVT ��������

[sb9]

Alibaba posts record sales - https://edition.cnn.com/2021/11/10/business/china-singles-day-intl-hnk/index.html.

Posted 2020 on November 25 Comvita reports strong China market sales during 11:11 event (Singles Day)

Just saying a good time to pick up some discounted shares. Currently $3.55. I'm forecasting back to $3.80 on 11/11 news. 7% increase. Go CVT ��������

Nice prediction, they're tracking well.

"The high double digit growth through domestic trade was especially encouraging and was enabled by the quality of our in market execution. In addition, Comvita was also the only international brand that made it on the honorary list of the Top 10 healthy foods on Tmall."

[winner69]

That news should be adding a few million to the bottom line

Good stuff

[sb9]

That news should be adding a few million to the bottom line

Good stuff

Doesn't bother the seller though, they're happy to sell down further..

[pg0220]

Alibaba posts record sales - https://edition.cnn.com/2021/11/10/business/china-singles-day-intl-hnk/index.html.

Posted 2020 on November 25 Comvita reports strong China market sales during 11:11 event (Singles Day)

Just saying a good time to pick up some discounted shares. Currently $3.55. I'm forecasting back to $3.80 on 11/11 news. 7% increase. Go CVT ��������

Where did you keep your crystal ball?

[Sideshow Bob]

Where did you keep your crystal ball?

Comvita reports record China market sales during 11:11 - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/382940)

11:11 is the World’s biggest shopping event and is a key event in our focus growth market of China. As such, we are delighted to advise that in this year’s event we recorded record sales in line with our forecasts despite a very strong result in the prior corresponding period (PCP) and ongoing pandemic challenges. This result underpins our confidence in our Focus strategy and highlights the benefit in our unique business model of having a highly capable team on the ground. The high double digit growth through domestic trade was especially encouraging and was enabled by the quality of our in market execution. In addition, Comvita was also the only international brand that made it on the honorary list of the Top 10 healthy foods on Tmall.
Commenting David Banfield Comvita Group CEO said “I am delighted that we are able to report another record 11:11 (singles day) result. The teamwork from across the company was extremely encouraging despite many Covid related challenges but I would particularly like to recognise the work on the ground in China lead by Regional CEO Andy Chen and our China market leadership team. We are also delighted and proud to be recognised by Tmall again as being in the Top 10 healthy food brands and the only international brand”.

[Balance]

Doesn't bother the seller though, they're happy to sell down further..

Not to worry.

Treat it as an opportunity.

[nztx]

Hope things don't get too sticky further down the track ;)

when others are saying things are "sticky" and stockpiles abound - I know where I would
be looking for an informed sounding board ;)

[Balance]

Hope things don't get too sticky further down the track ;)

when others are saying things are "sticky" and stockpiles abound - I know where I would
be looking for an informed sounding board ;)

Nothing new about stockpiles.

https://www.stuff.co.nz/business/114774477/unsold-gold-beekeepers-stockpiling-honey-as-prices-drop-in-saturated-market

There has been plenty of sub-standard manuka honey around since the certification process kicked in. I personally know a couple of beehive keepers who were doing very well until the UMF certification kicked in. Their multi flora manuka honey used to fetch top prices but now, sell for less than half of what they used to get.

In contrast, the price of mono flora high umf manuka honey has soared.

Comvita is one of the beneficiaries of the certification process, weeding out the fly by nighters and substandard manuka honey.

[Shareguy]

[QUOTE

Comvita is one of the beneficiaries of the certification process, weeding out the fly by nighters and substandard manuka honey.[/QUOTE]

To me that hits the nail on the head. Comvita are the largest manuka growers in the country, either directly or leased which gives them a much higher chance of high yielding crops. The certification process is a game changer for Comvita. Over time the smaller players will find the costs outweighs the rewards.

[Balance]

[QUOTE

Comvita is one of the beneficiaries of the certification process, weeding out the fly by nighters and substandard manuka honey.

To me that hits the nail on the head. Comvita are the largest manuka growers in the country, either directly or leased which gives them a much higher chance of high yielding crops. The certification process is a game changer for Comvita. Over time the smaller players will find the costs outweighs the rewards.

We were offered drums of manuka honey 5 years ago for investment by a Gisborne honey group. The idea was that their prices would keep on increasing, such was the trajectory of manuka honey prices at that time, and the UMF would increase over time as well.

We decided against the investment mainly because we had no ability to sell the honey to anyone else save the Gisborne group.

Luckily we did! A shipment of their manuka honey ( beautifully packaged) was stuck in Germany after the Germans tested the UMF and found it to be substantially less than what was labelled!!!! Last I heard they had to get the honey relabelled at huge costs and they lost money.

We also found out that heating the honey could increase the umf for a short period.

Such was the state of the industry 5 years ago.

[Shareguy]

The money is in Manuka and the certification process controls the quality when exported which is great. So I’m thinking the smaller players will find it harder to comply with the standards and leave the export market. There is still an issue in NZ with non complying manuka being sold in deceptive ways. You only need to go to your local market and see unlabeled jars, or honey being sold as manuka when it would not meet the standard. It needs to be sorted.

[BlackPeter]

The money is in Manuka and the certification process controls the quality when exported which is great. So I’m thinking the smaller players will find it harder to comply with the standards and leave the export market. There is still an issue in NZ with non complying manuka being sold in deceptive ways. You only need to go to your local market and see unlabeled jars, or honey being sold as manuka when it would not meet the standard. It needs to be sorted.

Never mind certification ... just wondering whether there is any independent scientific evidence that Manuka Honey is really healthy (or at least healthier than other honey)?

Just curious - are they selling a story or are they selling a fact?

[Rawz]

Never mind certification ... just wondering whether there is any independent scientific evidence that Manuka Honey is really healthy (or at least healthier than other honey)?

Just curious - are they selling a story or are they selling a fact?

Never let the facts get in the way of a good story, BP

[BlackPeter]

Never let the facts get in the way of a good story, BP

True ... and hey, it often does work, doesn't it?

[william67]

The high double digit growth? What's that mean?

[Balance]

Never let the facts get in the way of a good story, BP

I used to travel a lot to Asia on business. Used to bring NZ produce & products as gifts to customers - wine, honey, seasonal fruits (cherries & strawberries) and seafood.

Over time, I was requested to only bring manuka honey and it had to be Comvita UMF 20+. I thought paying $45 for a 250g jar was expensive at the time but hi, if it made them happy and appreciative, why not.

I then asked them out of curiosity why they preferred manuka honey and the reply was that it worked wonders for treating sore throats, colds and stomach ulcers.

I invested in Comvita shares on the back of my experience and did very well first time round but regretted not staying in longer when the sp soared above $10.00.

This is my second foray into Comvita and I have high expectations it will do very well over the next 5 years.

[Sideshow Bob]

True ... and hey, it often does work, doesn't it?

There have been many scientific studies, but regardless the old placebo effect - if you think it works, it works.

[Balance]

There have been many scientific studies, but regardless the old placebo effect - if you think it works, it works.

Chinese people pay $1000+ for 1kg of dried ling fish maw because it is good for health.

Then, they pay US$5,000+ for 1 kg of high grade birds' nest (swiftlet's dried saliva) because it is very good for females and enhances skin tone.

What does that tell us?

[Sideshow Bob]

Chinese people pay $1000+ for 1kg of dried ling fish maw because it is good for health.

Then, they pay US$5,000+ for 1 kg of high grade birds' nest (swiftlet's dried saliva).

What does that tell us?

Traditional Chinese Medicine has been around thousands of year - but Chinese have more of an emphasis and value on health and wellbeing in their medicine, rather the looking for a curative remedy once things go wrong, like Western medicine. While probably not much western-style efficacy studies on these products, consumers buying believe in the product.

Also with their gifting culture, these sorts of items are highly prized as no greater sign than gifting someone health.

From a western perspective, our idea of value is completely different to that other cultures.

[Balance]

Traditional Chinese Medicine has been around thousands of year - but Chinese have more of an emphasis and value on health and wellbeing in their medicine, rather the looking for a curative remedy once things go wrong, like Western medicine. While probably not much western-style efficacy studies on these products, consumers buying believe in the product.

Also with their gifting culture, these sorts of items are highly prized as no greater sign than gifting someone health.

From a western perspective, our idea of value is completely different to that other cultures.

Excellent perspective.

Explains why Manuka honey is so sought after as a health product & gift in China.

[pg0220]

Hi Bal, so I understand the company is improving its structure and margins which is excellent and why I've been in since last year. But in terms of competitions and CVT's manuka honey's competitiveness in terms of their prices with other producers, how do you assess CVT's growth perspective?

[Shareguy]

My research indicates that Comvita is generally the dearest product if you compare same same. The point of difference though is that Comvita owns its distribution channel in China. China is the largest market currently. Competitors sell through resellers. Owning the distribution channel direct to consumers enables Comvita to sell the Manuka story and obtain a premium.

[william67]

If look at SP of CVT last three days, could feel some kind of misunderstanding about CVT announcement. It is very good sales result in China during 11:11, the growth rate maybe over 50% if according "high double digit growth" . So what happened? "high double digit growth" , those kind words sound very strong political skills, but the problem is we ordinary people don't trust politicians, try to "smell" the real facts.

[Shareguy]

All the news this year has been very positive, yet the share price is in the doldrums. With 1/2 year nearly done an update would be good.

[Balance]

All the news this year has been very positive, yet the share price is in the doldrums. With 1/2 year nearly done an update would be good.

Will be like STU - upgrades come in a series and if properly managed, allow long term investors to buy off traders when traders sell down their positions due to 'loss of sp momentum'.

Relax and enjoy the ride.

[Balance]

Hi Bal, so I understand the company is improving its structure and margins which is excellent and why I've been in since last year. But in terms of competitions and CVT's manuka honey's competitiveness in terms of their prices with other producers, how do you assess CVT's growth perspective?

In addition to what share guy wrote which I agree with, CVT's other key competitiveness are well covered in this well-written article, do have a read of it :

https://www.newsroom.co.nz/hive-to-home-comvitas-tough-turnaround-road

Excerpts : "Just shy of its 50th birthday, Comvita is now the biggest UMF (unique mānuka factor) honey brand in the world, and the number one brand in China, the world’s biggest honey market."

"Comvita still controls the whole of its supply chain, from its own mānuka cultivars and mānuka forests, to hives, beekeepers, extraction and production facilities, an independently-accredited testing laboratory and more than 550 staff worldwide, including almost 350 on the ground in seven markets outside New Zealand."

" .... this end-to-end approach gives it a big competitive advantage with customers who increasingly want to know exactly where their food comes from."

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Will take a bit more time for CVT to tell its story to seal in its competitive advantages, but it will.

[william67]

CVT is better than what I think. 5+UMF 1KG CVT manuka honey cost USD50 at COSTCO USA online, is more expensive than Sylvia Park Pak'nSav supermarket's NZD59. Today's exchange rates is 1USD =1.48NZD.

[Shareguy]

Music to my ears. The US is an important growing market. A good turn around storey after a shocking few years. Under the new CEO plan there has been plenty of good news. The share price has gone backwards lately for no real reason. An update would be good. Either way I think we will be rewarded.

[sb9]

Staring to look more like a Dog stock of 2021...

[Balance]

Staring to look more like a Dog stock of 2021...

Started the year at $3.15, paid a 4c dividend, been as high as $3.80 and currently being sold down on low volume.

Buying opportunity imo and I am there for a few more.

[william67]

“Chinese consumers, in particular, use Mānuka honey to soothe digestive symptoms, but how it does this is unknown. Research points to the recently discovered natural compound, Comvita Lepteridine™, as playing a key role in the inhibition of enzymes involved in the development of gastrointestinal inflammation and pain. "Look at reviews from online shops such as jd.com, kaola.com, Tmall.com etc.. Chinese consumers use 10+,15+ CVT Mānuka honey to treat infections of Helicobacter pylori.

The weighted mean prevalence of H. pylori infection was 66 % for rural Chinese populations and 47 % for urban Chinese populations. Main reason is sharing food without serving chopsticks.

https://www.nytimes.com/2020/05/25/world/asia/china-coronavirus-chopsticks.html

Helicobacter pylori(H. pylori) is a type of bacteria. These germs can enter your body and live in your digestive tract. After many years, they can cause sores, called ulcers, in the lining of your stomach or the upper part of your small intestine. For some people, an infection can lead to stomach cancer.

[ralph]

Interesting wee fact that William ehmm:eek2:

[Habits]

Announcement

"Comvita share buy-back programme

CVT
15/12/2021 09:51
ADMIN
PRICE SENSITIVE
REL: 0951 HRS Comvita Limited

ADMIN: CVT: Comvita share buy-back programme

In accordance with Listing Rule 4.14.2, Comvita Limited (CVT) announces its
intention to acquire up to 300,000 of its ordinary shares in relation to
proposed share scheme arrangements for employees.

Offer date: The maximum period which offers will be made is from and
including 20 December 2021 (being three clear business days after the date of
this Notice) to 31 March 2022."

300k is a very significant and influential volume... sp heading to $4

[winner69]

Habits ... have other buyback programs done much for the share price

Good staff encouraged to be shareholders

[Habits]

Well going on the earlier buybacks in march and sept sp surge to 3.60 and 3.80. It could do so again, heres hoping, and that is added incentive to staff recipients.

[Shareguy]

After the last buy back sp drifted down. Good buying opportunity in my opinion that I have taken advantage of. All the news under new ceo has been positive, but the market does not forget fast the dismal performance of the past.

[IAK]

New Zealand producers' effort to trademark words 'Manuka honey' rejected by UK. Interesting decision.

https://www.rnz.co.nz/news/country/457989/new-zealand-producers-effort-to-trademark-words-manuka-honey-rejected-by-uk from RNZ.

[BlackPeter]

New Zealand producers' effort to trademark words 'Manuka honey' rejected by UK. Interesting decision.

https://www.rnz.co.nz/news/country/457989/new-zealand-producers-effort-to-trademark-words-manuka-honey-rejected-by-uk from RNZ.

To be fair - makes a lot of sense. I guess while Manuka happens to be the name some natives from Aotearoa used to call a shrub commonly growing in parts of the southern hemisphere ... there is no precedence for other people not being allowed to use foreign names for whatever they choose to produce.

Actually - we do this all the time. We call our pine trees "pine trees" (actually a name native to the Romans - pinus), we call our sheep "sheep" (an expression native to the British Islands) and sell it as such all over the world, we call our beef "beef" (dto) ... and so on. Actually - the British would have much more reason to complain, given that we produce lots of stuff we took from the British Islands and we even stole their name for the respective products we are now marketing.

Ever thought about whether we are allowed to market some of our pit fruit as apples? Neither our name nor our fruit ... some Germanic tribes came up with this name (aplaz) and the British used to steal it from them. What right would we have to use this expression to market our no name products? Sure - we could sell NZ aporos ... but than - this word is stolen from the British as well, the Maori didn't knew this fruit before the Europeans arrived ...?

Do we really want one law for the Maori and a different law for everybody else? Makes much more sense to stop being precious about Maori expressions ... everybody is allowed to use them, same as everybody is being allowed to use English, German or Chinese expressions for whatever they like.

If we really want to make sure that other people don't use the same name we use for our honey, than maybe we need to call it "New Zealand Manuka Honey". Easy as that.

[Balance]

To be fair - makes a lot of sense. I guess while Manuka happens to be the name some natives from Aotearoa used to call a shrub commonly growing in parts of the southern hemisphere ... there is no precedence for other people not being allowed to use foreign names for whatever they choose to produce.

Actually - we do this all the time. We call our pine trees "pine trees" (actually a name native to the Romans - pinus), we call our sheep "sheep" (an expression native to the British Islands) and sell it as such all over the world, we call our beef "beef" (dto) ... and so on. Actually - the British would have much more reason to complain, given that we produce lots of stuff we took from the British Islands and we even stole their name for the respective products we are now marketing.

Ever thought about whether we are allowed to market some of our pit fruit as apples? Neither our name nor our fruit ... some Germanic tribes came up with this name (aplaz) and the British used to steal it from them. What right would we have to use this expression to market our no name products? Sure - we could sell NZ aporos ... but than - this word is stolen from the British as well, the Maori didn't knew this fruit before the Europeans arrived ...?

Do we really want one law for the Maori and a different law for everybody else? Makes much more sense to stop being precious about Maori expressions ... everybody is allowed to use them, same as everybody is being allowed to use English, German or Chinese expressions for whatever they like.

If we really want to make sure that other people don't use the same name we use for our honey, than maybe we need to call it "New Zealand Manuka Honey". Easy as that.

Aotearoa Manuka honey to be PC these days but watch that as a brand go down like a lead balloon in the overseas markets.

[Habits]

SP today is up 2 percent on volume of 20k shares. I would say there is a fair bit more upside as a guess

[william67]

Why don't the Australians name their honey "Tea Tree honey" or "Ngooka honey", since the Australians more commonly call Mānuka shrub "Tea Tree" or Ngooka", do they really like the word "Mānuka"?
It is kind of cunning! More like all sorts of companies use "A2 protein milk" to compete with the a2 milk company. "Borrow" your name to make my money!
That's why branding "Comvita" not "Mānuka ", not "MGO" not any chemicals.

The concept of “UMF” is good.1200 different compounds in pure manuka honey, make "UMF" exactly what we need, no need to emphasize one chemical "MGO", so on, Bad guys could make fake honey by mixing up "MGO" with bush honey to justify, but nobody mix 1200 different compounds to make manuka honey.

[BlackPeter]

Why don't the Australians name their honey "Tea Tree honey" or "Ngooka honey", since the Australians more commonly call Mānuka shrub "Tea Tree" or Ngooka", do they really like the word "Mānuka"?
It is kind of cunning! More like all sorts of companies use "A2 protein milk" to compete with the a2 milk company. "Borrow" your name to make my money!
That's why branding "Comvita" not "Mānuka ", not "MGO" not any chemicals.

The concept of “UMF” is good.1200 different compounds in pure manuka honey, make "UMF" exactly what we need, no need to emphasize one chemical "MGO", so on, Bad guys could make fake honey by mixing up "MGO" with bush honey to justify, but nobody mix 1200 different compounds to make manuka honey.

I suppose you don't realize that the aboriginal word "Ngooka" means "honey", it has nothing to do with "Manuka".

So - why should they call their Manuka honey "honey honey"? But more importantly - why should they care?

[william67]

I suppose you don't realize that the aboriginal word "Ngooka" means "honey", it has nothing to do with "Manuka".

So - why should they call their Manuka honey "honey honey"? But more importantly - why should they care?

this article explained "Ngooka" means "honey", but they still use "Ngooka honey” ？

https://www.foodnavigator-asia.com/Article/2020/09/29/On-par-with-manuka-Aboriginal-Ngooka-honey-aims-for-premium-positioning-due-to-health-benefits

[Balance]

Why don't the Australians name their honey "Tea Tree honey" or "Ngooka honey", since the Australians more commonly call Mānuka shrub "Tea Tree" or Ngooka", do they really like the word "Mānuka"?
It is kind of cunning! More like all sorts of companies use "A2 protein milk" to compete with the a2 milk company. "Borrow" your name to make my money!
That's why branding "Comvita" not "Mānuka ", not "MGO" not any chemicals.

The concept of “UMF” is good.1200 different compounds in pure manuka honey, make "UMF" exactly what we need, no need to emphasize one chemical "MGO", so on, Bad guys could make fake honey by mixing up "MGO" with bush honey to justify, but nobody mix 1200 different compounds to make manuka honey.

Manuka in honey is like Champagne to wine - premium pricing.

[BlackPeter]

this article explained "Ngooka" means "honey", but they still use "Ngooka honey” ？

https://www.foodnavigator-asia.com/Article/2020/09/29/On-par-with-manuka-Aboriginal-Ngooka-honey-aims-for-premium-positioning-due-to-health-benefits

You are right - they do. Well, I guess it is probably a bit like "Lake Ellesmere" (which means "lake pond pond").

Still - no reference to Manuka.

[winner69]

Habits and shareguy mentioned buybacks probably boost the share price. Positive announcements from the company probably help as well.

SO I've charted CVT share price this year - red marks are times of price sensitive (positive) announcements and the yellow shaded bit buy back periods

So 7 price sensitive announcements and 2 buybacks has seen share price go up and down over the year -- at least current 3.47 is up from 3.13 at beginning of the year. I can sense punters frustration at it not being over 4 bucks by now

Wonder what will happen next year

[Shareguy]

Thanks for sharing that Winner69. Agree $4 by now was my expectation, the news has all been positive so no real reason. Disappointing that the Uk ruled against NZ in the trademark battle. I blame politics. I’m more interested in the NZ and China applications.

Those Australians love to steal our stuff. They stole Pharlap our beloved Pavlova, The Lamington, Lord and now they want our Manuka. It’s just not “fair dinkum”..

[BlackPeter]

Thanks for sharing that Winner69. Agree $4 by now was my expectation, the news has all been positive so no real reason. Disappointing that the Uk ruled against NZ in the trademark battle. I blame politics. I’m more interested in the NZ and China applications.

Those Australians love to steal our stuff. They stole Pharlap our beloved Pavlova, The Lamington, Lord and now they want our Manuka. It’s just not “fair dinkum”..

Hmm - don't really want to make a case for the Ossies - hey, they even return our crooks, don't they? However "Leptospermum scoparium" (that's what some NZ natives call Manuka) is native to Australia AND New Zealand. The Ossies didn't steal it from us ... it is theirs as well as ours since they used to share Gondwana land with us.

[Shareguy]

Hmm - don't really want to make a case for the Ossies - hey, they even return our crooks, don't they? However "Leptospermum scoparium" (that's what some NZ natives call Manuka) is native to Australia AND New Zealand. The Ossies didn't steal it from us ... it is theirs as well as ours since they used to share Gondwana land with us.

Ha ha. Yes and no BlackPeter. Our good friends can call thier honey what ever they like except use the word “Manuka” which is our word and no one else’s. So those fellas better stop the underarm tactics and claiming something that’s not fair dinkum.

[Balance]

Ha ha. Yes and no BlackPeter. Our good friends can call thier honey what ever they like except use the word “Manuka” which is our word and no one else’s. So those fellas better stop the underarm tactics and claiming something that’s not fair dinkum.


If the French can trademark Champagne, it beggars belief why NZ cannot trademark Manuka.

Be that as it may, NZ still has the UMF standard which is a trademark and recognized now in the world.

[BlackPeter]

Ha ha. Yes and no BlackPeter. Our good friends can call thier honey what ever they like except use the word “Manuka” which is our word and no one else’s. So those fellas better stop the underarm tactics and claiming something that’s not fair dinkum.

Hmm - so you propose as well that we are not anymore allowed to export lamb, deer and beef using these names? Remember - we just stole these words (and actually the produce as well) from an ancient and pretty dilapidated culture on the other side of the world.

Pretty ridiculous if people insist that we would "own" Maori words and nobody else is allowed to use them if it seems to be absolutely ok for us to use stolen and borrowed (but never returned) words of Latin, Greek and Germanic origin to market products we produce here in Aotearoa.

I guess even the use of the word New Zealand should be banned using this logic. We just stole it from the Dutch ...

[Shareguy]

Got to admit BlackPeter you have a strong argument with some good points . However being a “one eyed” kiwi I say NZ should have exclusive rights to the word mānuka, as it is a Māori name inextricably tied to New Zealand, like the term champagne is to a region in France.

The UK market is not the prize, it’s China. So there is a lot at stake if the fight goes our way. I have no doubt if things were reversed our friends would be doing the same thing.

[ralph]

Champagne is a type of fizzy overpriced wine invented / developed & produced in an area of France .
Manuka is the name of a native bush that as said grows in other parts of Australasia .
I think its a fair call that we cannot TM flora & fauna . But the advantage is in the Quality of the manuka honey that is produced in New Zealand & always will be

[Shareguy]

https://www.newsroom.co.nz/govts-risk-throwing-good-honey-after-bad

[ralph]

https://www.newsroom.co.nz/govts-risk-throwing-good-honey-after-bad
Collaboration & mandatory testing ,would be the way forward not paying sharks to drag this war out for their profit ,especially with government funding .

[Shareguy]

Good to see that Jarden have included in share pics for 2022.

[Shareguy]

From Jardens research note summery 15/12

CVT: 12m TP $4.00 (+8%), up to Overweight. The early stages of transformation are promising as CVT aims to transition from a volatile agri to an FMCG brand stock. The new harvest model stood up after a poor 2021 harvest and brand investment is showing signs of working in China, during a period of industry consolidation after catalysts including strict NZ export standards, oversupply and COVID- 19. We like recent progress and the added appeal of ESG potential from the reforestation project

[Shareguy]

Thought this was interesting

https://i.stuff.co.nz/business/industries/127357500/premium-nz-mnuka-honey-snapped-up-as-collectors-items-by-buyers-from-china-to-uae

Anyone heard how the season is going?

[Mackap]

Hi, long time reader first time poster. I'm not too sure in what areas comvita have their hives. But from what I've heard Northland didn't do so well. East Cape has done well. Central plateau flowering really well and good weather. Taranaki area just starting now. In general, Manuka has flowered really well. Weather was patchy early in the season, but been good since. My pick is an above average season. Whatever that means. I am a beekeeper north island east coast region and chase Manuka. Don't hold any comvita yet.

[winner69]

Probably old news but good article

https://businessdesk.co.nz/sponsored/comvita-to-transform-retail-experience-with-virtual-reality


I love it when companies start playing around with the creation of an immersive multi-sensory consumer experience to connect with consumers world wide

One day one might even be able to taste the product virtually

[winner69]

Suppose we will get the half year numbers soon

As long as ebitda is more than $15m they can say transformation remains on track


Even so that 370 mark seems a tough nut for the CVT share price to break ..... one day it will .... be patient

[Shareguy]

Thanks for posting. Good intel. I’m a holder and expecting another good result. The company has been a bit unloved due to some disastrous results over the years. The new CEO has turned things around and all the updates so far have been positive. I think it’s a great product with huge potential outside the current main markets of North America and China.


QUOTE=Mackap;935228]Hi, long time reader first time poster. I'm not too sure in what areas comvita have their hives. But from what I've heard Northland didn't do so well. East Cape has done well. Central plateau flowering really well and good weather. Taranaki area just starting now. In general, Manuka has flowered really well. Weather was patchy early in the season, but been good since. My pick is an above average season. Whatever that means. I am a beekeeper north island east coast region and chase Manuka. Don't hold any comvita yet.[/QUOTE]

[Shareguy]

Yes Winner69 $3.70 seems to be the level to break. We will no in a few weeks I guess. I’m picking it will be tested sooner than later.

[winner69]

Yes Winner69 $3.70 seems to be the level to break. We will no in a few weeks I guess. I’m picking it will be tested sooner than later.

I've had this morbid fascination with Comvita for decades .... go get the man in the white coat and take me away

Picture tells a 1000 words eh and the one below sure does

They were great times when the share price last took off --- glorified exuberance and I made a few bob .... but it was all exuberance because even on the way up and on the way down Comvita was never worth anymore than 4 bucks at best .... and to think it got to around 12 bucks ... and fortunately some mates listened to me and got out before the share price collapsed.. That's what talk and hype does.

Anyway I agree there are signs that the transformation is on track but still to be proved .... and there is always the possibility of the Chines taking them over ....so there's hope that if the share price breaks through 370 it'll go quite high ..... you never know maybe 12 bucks ....only joking

I will continue to be fascinated with Comvita

[Shareguy]

Great chart winner. Yes I love the product. Interesting that Jarden have as one of their share pics this year. Like you, also see this as a possible takeover play. It’s food though, so a lot could go wrong.

[BlackPeter]

Great chart winner. Yes I love the product. Interesting that Jarden have as one of their share pics this year. Like you, also see this as a possible takeover play. It’s food though, so a lot could go wrong.

Actually, if the market considers them as food producer, they are in trouble (i.e. they will stay on the plateau winners graph nicely shows). Food companies don't grow that fast, you know, and their PE is not cheap at current SP.

The question is - are they able to fascinate the markets imagination again with telling a story about selling health and beauty? If they are successful in that venture, their SP will rise ... and if & when the bubble bursts, it will drop again.

So - boring and slightly overpriced food producer or exciting story teller driven by hype and bust?

Time will tell.

[Joshuatree]

Yes ,A2 milk anyone,similarities re health benefits.

[Shareguy]

https://www.newsroom.co.nz/how-comvita-went-from-two-to-200-staff-in-china

[BlackPeter]

https://www.newsroom.co.nz/how-comvita-went-from-two-to-200-staff-in-china

Well, they sure tell a story and it entails the words health and beauty as well as good looking women.

Clearly - this is the stuff money spinners are made from :):

Personally - I feel the story rhymes a bit too much with the A2 story (agricultural product with questionable health benefits, relying on the consumer habits of only one big market with lots of geopolitical risks) ... and not sure yet how that story will end.

Putting most of the honey jars into the one big China basket might end up in a big sticky mess ... particularly given the geopolitical context.

As well a bit concerned about Comvita's "Rest of Asia" strategy. So many opportunities and so many potentially great markets they don't follow up.

Anyway - hope it goes well for them. Already the old Romans said "Pecunia non olet" ... so, if it all works out and we can extract it from China, why not?

[william67]

The strategy of FOCUS is what I invested for. I am happy with CVT' achievement in China. I don't depend on CVT to diversify my whole portfolio.
The predicament is the most of CVT NZ shareholders don't have touch with the growth markets, and have a heavy historical burden.(SP and business stories)
The following information from CVT FY2021 Presentation
Focus on growth markets of China and North America, STRUCTURED LONG-TERM INVESTMENT TO GROW T.A.M AND MARKET SHARE
The rest of Asia-- Japan, Korea, south east Asia. SELF FUNDING PROFITABLE GROWTHEMEA--UK,EUROPE, MIDDLE EAST, AFRICA ,SELF FUNDING PROFITABLE GROWTH
Australia and NZ, BUILDING DOMESTIC STRENGTH AND DISTRIBUTION

[Mel]

Half year results:
https://www.nzx.com/announcements/387848

[Sideshow Bob]

Half year results:
https://www.nzx.com/announcements/387848

Reads pretty well, although NPAT essentially flat.

[winner69]

Reads pretty well, although NPAT essentially flat.

High tax rate ,,,, which will normalise they say

A profit upgrade to come in a few months time .... low end of current range 27m to 30m means a very slack second half of the year with hardly any ebitda growth

[Mel]

Reads pretty well, although NPAT essentially flat.
Didn't like reading that net debt (largely inventory) had increased by nearly $22m

[Walter]

Yes, inventory up to try and compensate for supply chain issues. They say they will reduce this by about $25 million when logistics normalises.

[Mel]

Yes, inventory up to try and compensate for supply chain issues. They say they will reduce this by about $25 million when logistics normalises.
Thanks, lets hope they've got the buyers for the product!

[Monarch]

Amazing how many halfs of record growth one can have and yet see sweet fa making it to NPAT. What would this be valued at if they didn't meet growth targets one year? Probably wouldn't be pretty.

[Shareguy]

Amazing how many halfs of record growth one can have and yet see sweet fa making it to NPAT. What would this be valued at if they didn't meet growth targets one year? Probably wouldn't be pretty.

Yes I’m disappointed. They had plenty of inventory unless the 2nd half really is going to be a game changer. What’s the bet that they did due diligence on king honey. If so we have had a lucky escape.

I will give them the benefit of the doubt but if second half is more of the same then I’m out.

[winner69]

Cash is king they say ---- you're in business to generate decent cash flows. After all valuations are essentially what cash flows a business can generate over time.

My morbid fascination with Comvita's cash flows continues. Tracking this has done we well over the years. Share price was 12 bucks not that long but they were burning cash big time so not a good investment .... once they demonstrated that generating decent cash flows was good it was a good time to buy (cheap).

What worries me is the hype coming out of the company these days echos that of pre 2018. You'd think record quarters, things going well around the world blah blah would see them having strong cash flows. OK stockpiling inventory but they were doing that when the share price was 12 bucks.

Hope that they haven't gone the hyping the company up but not generating any cash path again - invariably ends in tears

But this time they've got the metaverse and virtual reality so things will be OK .... won't it?

Anyway - here's our their cash flows are tracking - operational cash flows and free cash flows excluding acquisitions (which have been $16m over the last 4 years). Welcome to draw your own conclusions.

[Beagle]

Yes Winner, you did say much the same back in 2015/2016 when the share price was well over $10 with all the hype and getting into the NZX50, I'm glad I listened to you back then and cashed in my profits before the share price collapsed.

[winner69]

Market on fire today ....and Comvita share price still on way down

[alokdhir]

Market on fire today ....and Comvita share price still on way down

Maybe Jarden will answer your this question ...after all its their Pick for the year :p

[Balance]

Free trade deal with UK - a win for honey exports to UK. NZ’s 3rd biggest honey export market and UK’s second largest honey supplier behind China(!).

"Our largest export to the UK is wine – approximately $500 million. Overnight $14m of wine tariffs will evaporate. New Zealand's honey exporters will no longer face a $16 duty for every $100 worth of honey they send to the UK,"

[Shareguy]

You would of thought the UK market was a big opportunity. I asked a question on the conference call last year and David stated the UK was not a focus. It seems all thier eggs are in China and North America. In fact latest Uk, Europe ect half year sales reported went down to $2.9m.

[Balance]

Yes I’m disappointed. They had plenty of inventory unless the 2nd half really is going to be a game changer. What’s the bet that they did due diligence on king honey. If so we have had a lucky escape.

I will give them the benefit of the doubt but if second half is more of the same then I’m out.

Interesting about the inventory increase.

Talked to a honey exporter (to China) from Hamilton over the weekend. He said that the market is picking up for manuka honey there and even to a certain extent for multi flora manuka. Problem is sourcing enough manuka honey as the big boys (presumably this includes Comvita) have been buying from under financial stress beekeepers and building up their stock. He finds the situation frustrating as his company is a small player and does have the financial resources to carry too much inventory.

So I am with you - let’s see if Comvita has strategically taken the opportunity of surplus supply in the market to build up stock and realise the stock in the next 6 months.

[sb9]

You would of thought the UK market was a big opportunity. I asked a question on the conference call last year and David stated the UK was not a focus. It seems all thier eggs are in China and North America. In fact latest Uk, Europe ect half year sales reported went down to $2.9m.

Disappointed with their latest report. Not much happening really, just the usual glossy presentation with no real momentum. I got out soon after the results.

[Walter]

You would of thought the UK market was a big opportunity. I asked a question on the conference call last year and David stated the UK was not a focus. It seems all thier eggs are in China and North America. In fact latest Uk, Europe ect half year sales reported went down to $2.9m.
As I recall the UK did not give consumer protection around Manuka honey. I think every Tom Dick and Harry was calling their honey Manuka to sell it at a higher price. I could be wrong, but that is why I think they ditched the UK.

[winner69]

Disappointed with their latest report. Not much happening really, just the usual glossy presentation with no real momentum. I got out soon after the results.

Beginning to agree with you there sb9

Many rave about David Banfield ... seen as the Messiah to lead Comvita to great glory.

As far as I'm concerned the jury is out re Banfield.

Methven were famous for their presentations - a joy to behold and pretty amazing things that made abysmal performance look fantastic. Banfield loved presenting these glossy presentations and he loved doing innovative 'things' and attending award functions to collect Best of Awards etc etc etc .... and all the time shareholders were left lamenting, year after year, never delivering on promises. Get the gist of what I'm saying.

But in saying that Banfield did an incredible job in dressing Methven up for sale and got GWA to acquire them. Shareholders finally got some sort of return and they were put out of their misery.

Maybe that's the path Banfield is taking again .... hoping for a $4 offer later in the year

[BlackPeter]

Beginning to agree with you there sb9

Many rave about David Banfield ... seen as the Messiah to lead Comvita to great glory.

As far as I'm concerned the jury is out re Banfield.

Methven were famous for their presentations - pretty amazing things that made abysmal performance look fantastic. Banfield loved presenting these glossy presentations and he loved doing innovative 'things' and attending award functions to collect Best of Awards etc etc etc .... and all the time shareholders were left lamenting, year after year, never delivering on promises. Get the gist of what I'm saying.

But in saying that Banfield did an incredible job in dressing Methven up for sale and got GWA to acquire them. Shareholders finally got a bit of a decent return.

Maybe that's the path Banfield is taking again .... hoping for a $3 offer later in the year

$3 you recon? - Ouch. I have no clues, but glad I sold out (months ago).

But are you sure David can do that that fast? With Methven it took him from memory five years or so to get the ship moving and the books looking good enough for a sell :scared: ;

To be honest - I had more hopes in Nigel Greenwood (their CFO - he used to look after Synlait while this was still a company to be proud of looking after), but not so sure anymore. Honey is more sticky than milk, i.e. maybe more difficult to get rid off ... ?

[Shareguy]

Can understand why some of us have lost faith. I’m going to continue to hold and will reassess next results. If I don’t see some decent growth in npat with some of that extra honey sold then I’m out.

Craigs are certainly positive. Extract from latest note.

Maintain Overweight - #1 agri sector pick
Reuters
CVT.NZ
Bloomberg
CVT NZ
Ticker
CVT
Exchange
NZX
3.30 4.10
Following CVT's 1H22 result we maintain our Overweight recommendation and rank the stock as our #1 agri sector pick. We believe CVT offers the best earnings growth prospects (23% EPS CAGR over next 3 years) relative to its current earnings multiple (18.5x FY22 EPS) vs. the other profitable agri names under our coverage. Key to the bull thesis is the achievement of management's FY25 targets (60% gross margins, 20% EBITDA margins, led by higher margin digital sales in China and North America). FY25 is clearly some way out but if these targets are achieved it would leave CVT trading on just 8.7x FY25 earnings and looking materially undervalued. In 1H22 CVT made good progress toward these objectives with gross margins lifting an impressive +760bps vs. pcp to 56.6%, and strong growth was reported in Mainland China (net contribution +40%) and North America (net contribution +75%). The effects of the pandemic are still being felt in some divisions however with Hong Kong, Japan, and ANZ markets still needing to recover, and they present a drag on earnings for the time being.
A record interim result; FY22 guidance unchanged
CVT reported EBITDA of $12.1m for 1H22, a record interim result and up +14% on pcp. NPAT however was flat on pcp at $3.5m, due to non tax-deductible DD expenses on an acquisition that did not eventuate. Guidance for FY22 EBITDA of $27m-$30m was reiterated, though a more informed guidance update is usually provided in April after the honey harvest.
Forecasts largely unchanged
We make only minor tweaks to forecasts, and now expect FY22/23 NPAT of $12.7m/$16.5m, compared to $12.1m/$16.1m previous. Medium term, we forecast $40m EBITDA by FY25, which is below the company's target EBITDA level (c.$50m) to account for execution risk.
Target price -2% to $4.10
Our 12-month target price falls -2% to $4.10, with minor upward tweaks to our forecasts offset by revisions to DCF assumptions to better align with those used for our other companies under coverage. Key DCF assumptions are now WACC 8.8% and TGR 3.0% (7.6% and 2.0% previous). Key downside risks include slower than expected execution toward targets, harvest risk, daigou

[BlackPeter]

Can understand why some of us have lost faith. I’m going to continue to hold and will reassess next results. If I don’t see some decent growth in npat with some of that extra honey sold then I’m out.

Craigs are certainly positive. Extract from latest note.

Maintain Overweight - #1 agri sector pick
Reuters
CVT.NZ
Bloomberg
CVT NZ
Ticker
CVT
Exchange
NZX
3.30 4.10
Following CVT's 1H22 result we maintain our Overweight recommendation and rank the stock as our #1 agri sector pick. We believe CVT offers the best earnings growth prospects (23% EPS CAGR over next 3 years) relative to its current earnings multiple (18.5x FY22 EPS) vs. the other profitable agri names under our coverage. Key to the bull thesis is the achievement of management's FY25 targets (60% gross margins, 20% EBITDA margins, led by higher margin digital sales in China and North America). FY25 is clearly some way out but if these targets are achieved it would leave CVT trading on just 8.7x FY25 earnings and looking materially undervalued. In 1H22 CVT made good progress toward these objectives with gross margins lifting an impressive +760bps vs. pcp to 56.6%, and strong growth was reported in Mainland China (net contribution +40%) and North America (net contribution +75%). The effects of the pandemic are still being felt in some divisions however with Hong Kong, Japan, and ANZ markets still needing to recover, and they present a drag on earnings for the time being.
A record interim result; FY22 guidance unchanged
CVT reported EBITDA of $12.1m for 1H22, a record interim result and up +14% on pcp. NPAT however was flat on pcp at $3.5m, due to non tax-deductible DD expenses on an acquisition that did not eventuate. Guidance for FY22 EBITDA of $27m-$30m was reiterated, though a more informed guidance update is usually provided in April after the honey harvest.
Forecasts largely unchanged
We make only minor tweaks to forecasts, and now expect FY22/23 NPAT of $12.7m/$16.5m, compared to $12.1m/$16.1m previous. Medium term, we forecast $40m EBITDA by FY25, which is below the company's target EBITDA level (c.$50m) to account for execution risk.
Target price -2% to $4.10
Our 12-month target price falls -2% to $4.10, with minor upward tweaks to our forecasts offset by revisions to DCF assumptions to better align with those used for our other companies under coverage. Key DCF assumptions are now WACC 8.8% and TGR 3.0% (7.6% and 2.0% previous). Key downside risks include slower than expected execution toward targets, harvest risk, daigou

I understand that selling something with alleged health benefits to China can be a great money spinner, no matter whether it works or not.

Just wondering, though what happens if & when China attacks Taiwan? Of course - this is not a given, but under the circumstances it is clearly a risk.

Fonterra stopped already selling milk to Russia ... would Comvita still be allowed and willing (brand damage) to sell anything into China if Xi turns into Putin make 2?

I suppose loosing the Chinese market would be material for Comvita if it happens?

[Balance]

I understand that selling something with alleged health benefits to China can be a great money spinner, no matter whether it works or not.

Just wondering, though what happens if & when China attacks Taiwan? Of course - this is not a given, but under the circumstances it is clearly a risk.

Fonterra stopped already selling milk to Russia ... would Comvita still be allowed and willing (brand damage) to sell anything into China if Xi turns into Putin make 2?

I suppose loosing the Chinese market would be material for Comvita if it happens?

Losing the China market would be material to the whole of NZ economy - period.

Imagine no dairy, meat, seafood, timber, fruit and services (tourism & education) exports. Then, NZ will have to stop importing from China as well.

In other words, it’s not going to happen.

But what a delicious thought to short the NZ$ & China RMB however!

[Balance]

Can understand why some of us have lost faith. I’m going to continue to hold and will reassess next results. If I don’t see some decent growth in npat with some of that extra honey sold then I’m out.

Craigs are certainly positive. Extract from latest note.


Target price -2% to $4.10
Our 12-month target price falls -2% to $4.10, with minor upward tweaks to our forecasts offset by revisions to DCF assumptions to better align with those used for our other companies under coverage. Key DCF assumptions are now WACC 8.8% and TGR 3.0% (7.6% and 2.0% previous). Key downside risks include slower than expected execution toward targets, harvest risk, daigou

Craigs is CVT's house broker so their recommendation must be treated with caution. Having written that, Craigs is one firm with huge FUM (via clients' portfolios) - so a positive recommendation from them means their advisors can invest & add CVT to the portfolios. Potentially a lot of buying there.

Jarden picking CVT as one of their picks for 2022 interests me for obvious reason - M & A being Jarden's principal driver in many of their recommendations over the years.

Meanwhile, here's a recent example of CVT's strategy at work in the US :

https://www.womenshealthmag.com/food/a38831810/what-makes-manuka-honey-different-than-normal-honey-again/

[Balance]

Interesting article about Comvita in China & profile of Andy Chen, Asia CEO.

https://www.newsroom.co.nz/how-comvita-went-from-two-to-200-staff-in-china

Keeping up with what Banfield calls “the most dynamic market in the world” is never going to be easy, Andy Chen says. But he’s optimistic his new Asia team can meet Comvita’s goals of double-digit top and bottom line growth in China this year. That’s up on sales of $73 million in 2021.

Maybe they can do even better in the future, Chen says. He is lining up new strategic partners to sell and distribute Comvita products in its four main markets - Beijing, Shanghai, Shenzhen and Guangzhou. "Watch this space," he says.



Chen says major plantings of mānuka forest in New Zealand (the company has put in 10 million trees over the last few years) will secure supply for a potential big expansion in the Chinese market, and promote the company’s environmental credentials to its newly eco-conscious consumers.

The potential is mind-blowing, and a little overwhelming, he says.

[winner69]

CVT share price still going nowhere ….at least it’s not going down (much)

Probably need a bit more news to hype it up again

Come on David …tell us something

[Shareguy]

Yes an update would be good. At least the stars will be getting some free honey. Shame some of them have no idea where NZ is

https://www.nzherald.co.nz/entertainment/oscars-2022-new-zealand-manuka-honey-in-goodie-bag-gift-for-stars/FBANX7IWMROD7R2GZI4YLMG5TU/

[Sideshow Bob]

Comvita’s resilience despite global supply chain disruption - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/391913)

Given the significant amount of market commentary regarding the ongoing impact of global supply chain disruption and the effect of inflation on performance, Comvita is pleased to give an update on its trading performance to the end of April.

In the 10 months to the end of April Comvita reported an unaudited EBITDA of $23.9M (c.93% of FY21 full year actuals) and is still forecasting to deliver in line with its guidance of EBITDA $27-$30M for the full year ending June 2022. Unaudited operating profit to the end of April increased by 29% versus PCP. It is forecasted that any impacts of continued supply chain disruption due to Mainland China lockdowns will be manageable. Given that Hong Kong was previously locked down and suffered from supply chain disruption, Comvita is very pleased to report that demand in its Hong Kong SAR subsidiary is strong and that underlying demand has returned to pre Covid levels. This gives Comvita confidence that the impact of any further supply chain disruption in Mainland China will also be temporary. Group Inventory has been increased in order to maintain service levels to markets.

Inflationary pressures are modest and are not impacting current performance additionally, given the high share of digital sales and its premium FMCG positioning, Comvita is well placed to pass on any price increases as and when they occur.

Commenting David Banfield, Group CEO stated “Two and a half years ago we set out our plan to build long term resilience and growth at Comvita. We are really pleased with the progress we are making despite material supply disruption in China and around the world. Our ability to mitigate supply chain disruption and offset inflationary pressure proves that we are on the right track. The team and I remain confident in our ability to continue to deliver results befitting the global market leader and set us up to deliver our short-term goals and most importantly our longer term 2025 strategic plan. We look forward to updating the market on our full year performance after our financial year closes in June”.

Ends.

[winner69]

Announcement -- that's a big relief

Good on David for keeping us updated

[Shareguy]

Lots to like. Guidance maintained. Costs importantly kept under control. Ability to pass on price increases. Little impact with Chinese issues .Has not traded on such low multiples for many years. Estimated eps forecast fy22 $.17 to $.19

[BlackPeter]

Lots to like. Guidance maintained. Costs importantly kept under control. Ability to pass on price increases. Little impact with Chinese issues .Has not traded on such low multiples for many years. Estimated eps forecast fy22 $.17 to $.19

Hmm - that's at todays SP still a PE of 17.7 ... does not sound that cheap to me for a cyclical agricultural one trick pony with plenty of macroeconomic risks attached.

Which part exactly did you like?

[Monarch]

What a timely announcement. I sold out of this on Tuesday at break even. Oh well. Does unsold stock count towards ebitda? I recall a build up in inventory at last results, is ebitda being driven by unrealised sales?

[Shareguy]

Hmm - that's at todays SP still a PE of 17.7 ... does not sound that cheap to me for a cyclical agricultural one trick pony with plenty of macroeconomic risks attached.

Which part exactly did you like?

There has been concerns that supply disruptions would have a major impact, which is not the case.

Also. Inflationary pressures are modest and are not impacting current performance additionally, given the high share of digital sales and its premium FMCG positioning, Comvita is well placed to pass on any price increases as and when they occur.

Yes Pe is high but not when you look at historical and the potential ….

[BlackPeter]

There has been concerns that supply disruptions would have a major impact, which is not the case.

Also. Inflationary pressures are modest and are not impacting current performance additionally, given the high share of digital sales and its premium FMCG positioning, Comvita is well placed to pass on any price increases as and when they occur.

Yes Pe is high but not when you look at historical and the potential ….

Looks like the markt is currently just re-rating "potential". Look at companies like e.g. XRO or FPH. I know, both of them are not in the honey industry, but growth is growth and nothing else justifies a premium over standard PE ...

[Shareguy]

Looks like the markt is currently just re-rating "potential". Look at companies like e.g. XRO or FPH. I know, both of them are not in the honey industry, but growth is growth and nothing else justifies a premium over standard PE ...

Can see your point however Xero and Fph are being punished with profit going backwards. CVT saying 29 percent growth in profit versus pcp.

[BlackPeter]

Can see your point however Xero and Fph are being punished with profit going backwards. CVT saying 29 percent growth in profit versus pcp.

Well yes, they turned a big loss in 2019 into a smaller loss in 2020 and a quite mediocre profit (14 cts/share) in 2021. Average EPS over the last 9 years would be 11 cents per share. Not really exciting, isn't it?

Sure - if you do a linear extrapolation over only the last three years than the future must look bright. Problem is just ... Earnings CAGR over the last 9 years (since listing) is negative, CVT is one of these agricultural cyclicals with huge added geopolitical risks (China market) and it is already in the upper earning quadarants (20 cents predicted this year vs 11 cents average) :scared:

Anyway ... sure - they might be good for another hype peak, but than one could as well trade crypto or lotto tickets.

[william67]

This video played 21 million in China yesterday 17/may/2022
https://weibo.com/5873553397/Ltopq2OJ7#repost

[Shareguy]

Thanks for posting. Yes we can all look beautiful and young again with the elixir of life.

[william67]

Branding
https://www.m2woman.com/claudia-li-collaboration-creativity-and-comvita/
https://www.comvita.co.nz/blog/claudia-li

[Shareguy]

Takeover.. Will no more tom

[Shareguy]

https://www.bnnbloomberg.ca/cr-capital-mulls-take-private-of-manuka-honey-maker-comvita-1.1772518.amp.html

[winner69]

That'll end the frustrating times for Comvita shareholders

Probably a get out of jail card as well as share price was sinking into the 200's

[bull....]

or maybe its just fake news to help the share price

[Muse]

Takeover.. Will no more tom

aye China Resources
Big shareholder in Scales Corp
apparently CR had a crack at Manuka Health ~5 years ago, and always liked the space.

[Balance]

That'll end the frustrating times for Comvita shareholders

Probably a get out of jail card as well as share price was sinking into the 200's

Always right to buy at $3.05 :D:t_up:

[Mel]

Trading halt, so material announcement forthcoming
https://www.nzx.com/announcements/393054

[Balance]

Let’s hope it’s NOT a takeover or at least, NOT a full takeover.

NZ cannot afford to lose yet another iconic agribusiness company to overseas owners.

Hope it’s like PGW - major offshore owners (say 50%) and public listing remains.

Personally will be gutted if Comvita is taken over and gets delisted.

[Muse]

aye China Resources
Big shareholder in Scales Corp
apparently CR had a crack at Manuka Health ~5 years ago, and always liked the space.

China Resources already own ~6.5% and have a director on the board

The tauranga mafia (IE craigs and their friends) will be influential to the outcome given they hold particular sway over the retail shareholders.

Remember in 2011 when cerebos craigs launched a takeover for the company? Then chairman Neil Craig went into battle and lived his happiest days fending off the takeover

register looks a lot different now, with many offshore/asian domiciled shareholders on the register.

bit of a shame - nzx companies are dropping like flies.

OIO could be a real hurdle for this one

[winner69]

Always right to buy at $3.05 :D:t_up:

Better buying than China Resources who bough millions at 10 bucks and more at 7 bucks

Think that Li Wang paid a heft price for his big shareholding as well

[Balance]

Better buying than China Resources who bough millions at 10 bucks and more at 7 bucks

Think that Li Wang paid a heft price for his big shareholding as well

So a high possibility they could be offering $5.00+ per share. Averaging down for them in a company they obviously feel as having a great future vs NZ investors whose investment horizon tends to be very short.

[Muse]

Better buying than China Resources who bough millions at 10 bucks and more at 7 bucks

Think that Li Wang paid a heft price for his big shareholding as well

I'm not sure that Li Wang is associated with China Resources.

Li Wang is the wife of Zhu Guangping, who was the Chinese JV distributor partner of Comvita. Comvita bought out his business in 2019 for script. And looks like some other JV interests in 2016.

[Muse]

Oooh Comvita is saying the bloomberg article is a dirty rumour

https://www.nzx.com/announcements/393056

[Balance]

Oooh Comvita is saying the bloomberg article is a dirty rumour

https://www.nzx.com/announcements/393056

Good.

Live another day!

[bull....]

or maybe its just fake news to help the share price

just as we thought , somebody got to off-load a few lol

[winner69]

Maybe where'sthere smoke there's fire

[Muse]

Maybe where'sthere smoke there's fire

thats what I was thinking.

[Balance]

Maybe where'sthere smoke there's fire

Read the Bloomberg article and Comvita’s announcement carefully.

[Shareguy]

Interesting. There is a bit of detail in the Bloomberg announcement and I suggest someone has been talking out of turn before any deal is done. I guess the story could be complete rubbish but where there is smoke theres generally fire.

At the end of the day Comvita is trading well below it’s historical ratios. Under new leadership the CEO has turned things around and the updates have been generally positive since.

I don’t want to see a full take over and another company departs from the NZX. However It is not surprising with our low dollar and relaxed take over rules.

Time will tell.

[Mel]

Interesting. There is a bit of detail in the Bloomberg announcement and I suggest someone has been talking out of turn before any deal is done. I guess the story could be complete rubbish but where there is smoke theres generally fire.

At the end of the day Comvita is trading well below it’s historical ratios. Under new leadership the CEO has turned things around and the updates have been generally positive since.

I don’t want to see a full take over and another company departs from the NZX. However It is not surprising with our low dollar and relaxed take over rules.

Time will tell.
Fully agree, happy to continue to hold

[winner69]

Love it when a company CEO outlines why his company is ripe for a takeover - esp when the CEO is a master of readying a business to be taken over

David says Comvita ticks all the boxes as to what make a good acquisition -



So, what makes a good takeover target?

An undervalued company with solid prospects is top of the wish list. Also, one that has undertaken a “strategic review”, often double-speak for cleaning things up for a potential sale. “We recognise that the current share price materially undervalues Comvita, even if just looking at FY22 guidance, let alone the opportunity we see ahead reflected in our 2025 strategic plan,” Banfield said.

The stock last traded at $3.30, up 1.9% over the past year. “Our current trading earnings multiple is again materially below other benchmark growth companies – which is especially unusual given how much we have simplified, executed our plans and reduced risk in the business.”

Those look like three ticks to me

And more where that came from
https://businessdesk.co.nz/article/opinion/show-me-the-honey

[winner69]

The market still not believing David - We recognise that the current share price materially undervalues Comvita, even if just looking at FY22 guidance, let alone the opportunity we see ahead reflected in our 2025 strategic plan,” Banfield said.

[Shareguy]

I can’t read the article winner but think the market is wanting to see some more runs on the board. From my point of view the company increasing stock levels and debt was disappointing and not part of David’s original plan. Their is also valid concern regarding China.

David is correct that the current trading multiples don’t reflect the future opportunities. Time for a share buyback.

[winner69]

Give David full marks plus in trying to get a buyer for Comvita

Another profit upgrade ..... but more importantly David says “I am delighted with the momentum that we are experiencing in the business and the ongoing resilience of our focused business model'

Isn't that cool

C'mon buyers - a bargain to be had and David is keen to sell

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/393598/372639.pdf

[BlackPeter]

Give David full marks plus in trying to get a buyer for Comvita

Another profit upgrade ..... but more importantly David says “I am delighted with the momentum that we are experiencing in the business and the ongoing resilience of our focused business model'

Isn't that cool

C'mon buyers - a bargain to be had and David is keen to sell

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/393598/372639.pdf

Just wondering whether the middle of a bear market would be the best time to sell a cyclical agricultural company with still quite high PE and critical dependance on only one big market. Particularly given that this one big market can easily be wiped out over night either by some stupid macro political move by one of our local political amateurs or alternatively by the big political bully in the middle kingdom?

But hey, who does not try does not win ... what's the worst which could happen?

[william67]

I am "blindly" positive about the future of CVT, so I bought a little more this morning. I don't think CVT is a cyclical agriculture business , it is transforming and transformed, it is a premium brand, it is a consumer stock. CVT will reach the tipping point to start fast growing, giving them a little more branding time.
Even inventory increased, borrowed more money, revenue flat, all of those short term disadvantages can not shield off the bright sides of this business.


'Consumer staples stocks function in a non-cyclical manner, meaning they offer investors safety during recessionary climates. Since these companies sell goods such as food and cleaning products that consumers rely on regardless of the state of the economy, they tend to generate solid profits even in weak economies.'

[BlackPeter]

I am "blindly" positive to the future of CVT, then bought a little more this morning. I don't think CVT is a cyclical agriculture business , it is transforming and transformed, it is a premium brand, it is a consumer stock. CVT will reach the tipping point to start fast growing, give them a little more branding time.
Even inventory increased, borrowed more money, revenue flat, all of those short term disadvantages can not shield off the bright sides of this business.

'Consumer staples stocks function in a non-cyclical manner, meaning they offer investors safety during recessionary climates. Since these companies sell goods such as food and cleaning products that consumers rely on regardless of the state of the economy, they tend to generate solid profits even in weak economies.'

I get the thing about consumer staples. People just need to eat unless they want to starve, and most decide not to starve if they can afford it. Consumer Staples are essential for people to survive.

Not so sure though, whether people really need this ridiculously expensive Manuka honey instead of any other honey (or spread). They won't starve without buying Manuka Honey and their purse will look much healthier as well :) ; People like healthy looking purses in difficult times.

Lets face it - The sales of Manuka honey is driven by the same hype which drives the sale of e.g. pulverised deer penis or rhinos horn.

Personally I managed to get through life quite well without spending any cent on any of above supplements and I am sure anybody else will do quite fine without this stuff as well. Neither essential nor staples.

Not sure it is the time to make money with selling fairy dust .... but maybe it is. They say every morning a bigger fool gets out of bed ... but personally I would not want to rely on this tale to make money.

[william67]

Time will tell, I will hold on much longer, even this year or next year we have an economic recession here. I have done a lot of market research about this business, until recently I realized what CVT is doing is a pretty cool thing. As a businessman my investment depends on the perspective of this business ,not by PE . I believe David and his team can fulfill their ideas!

Do not know how many bigger fools , how many rich people in the world , but one thing is for sure, a lot of luxury brands and premium brands are very profitable businesses.

[Recaster]

Key points for this company's interim accounts are the negative operating cash flow, poor returns, improving gross margin, higher debt and the increasing importance of the North American market.

My (very basic) take:

https://recastinvestor.substack.com/p/basic-analysis-comvita-cvtnzx

Comments welcome!

[kiora]

Stock turn once/year is horrendously low. Must mean some stock sits on the shelf for a long time. Means need more warehouse room required and extra cost of carrying it.
Lucky it has a reasonably long shelf life.

[Walter]

The quality of the honey actually improves at it ages - think of it like whiskey. They have chosen to build stock due to logistics and supply chain issues. It also protects them against bad harvest years, they had several of them in a row, which bought the company to it's knees.

[kiora]

Only some of the honey improves as it ages, is it 30% of their stock?
Now lower UMF honey is shown as discounted
https://www.comvita.co.nz/manuka-honey?utm_source=google&utm_medium=cpc&utm_campaign=search_nz&utm_id=odla&utm_campaign={campaign.name}&utm_source=odla_sem&utm_medium=google_cpc&utm_term=comvita%20umf&utm_content={adgroup}&gclid=Cj0KCQjwhqaVBhCxARIsAHK1tiO2Fp-Hz4xsARlOx-29SlZUGtJ8M8l1W87sZ5lJUqbTtDnDZu1S5nIaAnuFEALw_wcB

[Balance]

All the honey companies advertise higher prices for their manuka honey on their websites than what they sell in the stores - all of them.

And it’s already covered numerous times - that there’s plenty of low UMF manuka honey around due to the imposition of the grading & certification system.

Meanwhile, the price of high grade UMF honey has gone through the roof. Comvita is very well positioned in this market.

[Mackap]

The price paid to beekeepers for high grade honey has dropped dramatically. I've seen beekeepers struggle to sell bulk honey umf 15 for $20 per kg. This grade was selling easily for $75 kg two years ago. Comvita, if they aren't stocked up already, could be buying up high grade Manuka for a bargain at the moment. I'm not sure what retail price for a umf 15 is in a shop.

[Balance]

The price paid to beekeepers for high grade honey has dropped dramatically. I've seen beekeepers struggle to sell bulk honey umf 15 for $20 per kg. This grade was selling easily for $75 kg two years ago. Comvita, if they aren't stocked up already, could be buying up high grade Manuka for a bargain at the moment. I'm not sure what retail price for a umf 15 is in a shop.

Try $65 for 250g UMF15+ and $120 for 250g UMF 20+.

There were so many artificially inflated UMF honey around before the testing and grading came in. Now the high grades are in short supply.

[Mackap]

No, the high grades are not in short supply. I am a small commercial beekeeper. I have about 15 tonne of umf 15 and higher in storage with no Packers wanting to purchase. A big commercial honey storage company has 100s of tonnes with umf 10+ and higher with not much interest. The only honey being sold is from beekeepers who are so desperate to sell, that they will take any low ball offer.

[Mackap]

Also you would be surprised how much blending of Manuka honey is done regardless of the new MPI standards that were brought in.