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NOVA (0201) Nova Wellness Bhd : An Expanding Healthcare OBM player with high profit margin (Davidtslim)

  • Nova Wellness Bhd is engaged in manufacturing dietary supplements which include vitamin, mineral, and herbal supplements, functional food products under brand name Activmax and Sustinex, and Skincare products sold under brands Novavis and SP8.
  • Nova has cash of RM32.43mil and no debt.
  • Nova has their own brand of sanitizer and also some disinfect and cleaning products.
  • They may further improve their profit margin through R&D and produce their products in-house, which allows them to have better quality and cost control.
  • Nova is supplying Sanitizer to a number of government hospitals since the pandemic began according to some company update in May 2020.  This can create recurring income for Nova.
  • The completion of phase one of Nova new factory is significant, as it now increases production capacity by five times. Nova is now in the process of constructing phase two of the factory. (New  Plant  has  secured  CCC , Certificate  of  Completion  and  Compliance).
  • Besides the health food products, Nova intends to utilize this factory to produce products such as low GI bread.
  • Nova is looking to make inroads regionally, it has obtained approval for some of its products in Indonesia and Thailand.
  • Second Clinical Trial of Hepar-P Capsule for  the  treatment  of  non-alcoholic fatty liver disease. Upon completion, it would be the first herbal product who passed the clinical trials in Malaysia – a recognition to Nova.
  • Nova currently trading at trailing PE of 26x, but with expansion and strong sales of its products, it is expected forward PE of 16x for FY2021 to FY2022, which is still much lower than Bioalpha holding and Dpharma which over 40x PE (Pharma and Bioholding are loss making).
  • More  Partners  would  join  via  Nova  Wellness  Program  Partnership. Management  are  expecting  to  have  more partners this year. 
2020 I am focusing more on gloves and healthcare stocks which I still heavy on glove stocks so far.
Some of Nova Nova sanitizer products.

If you interested on my analysis report, please contact me at davidlimtsi3@gmail.com
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This writing is based on my own assumptions and estimations. It is strictly for sharing purpose, not a buy or sell call of the company and the contents of this report should not be considered as professional financial investment advises or buy/sell recommendations. I strongly encourage you to do your own research and take independent financial advice from a professional before you proceed to invest.
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