Category: Stock Market

ASX share City Chic Collective Ltd (ASX: CCX) is an attractive business according to one particular fund manager.

What does City Chic do?

City Chic describes itself as a global omni-channel retailer that specialises in plus-size women’s apparel, footwear and accessories. It has a number of brands including City Chic, Avenue, CCX, Hips & Curves and Fox & Royal. It has a network of 96 stores across Australia and New Zealand, websites operating in Australia, New Zealand and the US, marketplace and wholesale partnerships with major US retailers such as Macys and Nordstrom, and a wholesale business with European and UK partners such as ASOS and Zalando.

Avenue targets value-conscious women with a long history and significant online customer following in the US. Hips & Curves and Fox & Royal are online intimates brands in the US and ANZ respectively.

A recent acquisition

Before I get to the fund manager’s views, City Chic announced an acquisition today.

City Chic is going to acquire UK plus-size brand Evans from the Arcadia group. Evans has a long history, having operated for 90 years as a high street retailer.

The ASX share is buying Evans’ e-commerce and wholesale businesses, which generated £26 million (A$46 million) of sales for the financial year to August 2020. The Evans website had 19 million visits in that time.

However, this acquisition doesn’t include the store network of more than 100 locations in the UK. The administrators are entitled to trade from the existing Evans stores until the end of March 2021, in order to liquidate existing stock in the stores. The franchise business, based primarily in Middle East, is also excluded from the acquisition.

The Evans group (online, wholesale, stores and franchise) generated over £60 million of annual sales prior to COVID-19. City Chic said that Evans has high online penetration with almost half of direct-to-consumer sales (stores and website) being through the digital channel.

The store portfolio has been shrinking for a number of years with customers changing to the digital channel, which City Chic thinks will minimise any e-commerce sales leakage as a result of the administration-led store liquidation. The acquisition will be funded from City Chic’s existing cash balance, which was A$121 million before the acquisition. Its $40 million debt facility will remain undrawn.

City Chic said that this acquisition will give it a platform to launch into a new market worth £5 billion annually in the UK, or $9 billion in Australian dollar terms.

What makes City Chic an interesting option?

Fund manager Chris Prunty from QVG Capital thinks that the e-commerce theme will continue to grow after COVID-19 has passed. For a business like City Chic, the fashion ASX share’s ability to sell products online underlines its ability to build itself into a market-leading position.

Mr Prunty also said that City Chic’s management is a great example of what can be done in a crisis, not worrying about failure and instead focusing on innovating, leading to outperformance.

In FY20, City Chic’s online penetration of total sales was 65%, compared to 44% in FY19. Online website sales growth was 113.5% in the last financial year.

After today’s movement where the City Chic share price went up 11%, it’s now valued at 24x FY23’s estimated earnings.

More reading

• Why City Chic, Kogan, Next Science, & NIB shares are charging higher
• Why the City Chic (ASX:CCX) share price is rocketing 15% higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why this fundie thinks City Chic (ASX:CCX) is an attractive ASX share appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3p8Yzzg

Weebit Nano Ltd (ASX: WBT) shares were on the rise today. This came after the company announced it will file two new patents with its strategic partner, Leti. By the market’s close, the Weebit Nano share price was up 11.54% to $2.03. In comparison, the S&P ASX All Technology Index (ASX: XTX) was down 1.3% to 2,843 points.

Quick take on Weebit Nano

Weebit Nano develops next generation computer memory technology. The company addresses the growing need for data storage and embedded non-volatile memory (NVM) technology with its new, resistive random-access-memory (ReRAM) technology.

According to the company, “Weebit Nano’s technology enables a quantum leap, allowing semiconductor memory elements to be significantly cheaper, faster, more reliable and more energy efficient than the existing Flash technology”.

What’s driving the Weebit Nano share price higher?

The Weebit Nano share price was rocketing higher today after the company advised it has recently filed two new patents related to its to Silicon Oxide (SiOx) ReRAM technology. 

The first of the patents outlines a process improvement that enables high memory yield and high uniformity across memory cells. The goal is to maximise production efficiency during fabrication which will ultimately lead to best-in-industry class memory chips.

The second patent filed relates to the selector development utilising a very fast read speed. This, in turn, allows less power to be required and reduces stress during the read operation of a memory chip.

Management commentary

Weebit Nano CEO Mr Coby Hanoch said:

Weebit is continuing to build its IP portfolio as it moves closer to first commercialisation, filing two new patents to protect our technology and enhance the IP value for our licensees. Together with our strategic partner Leti, we have filed eight patents over the past two years.

The recent capital raisings support accelerated research and development that is expected to generate additional patents as we progress towards production.

Weebit share price summary

The Weebit Nano share price has shot up higher over the past 6 months, reflecting a gain of more than 600%.

Weebit Nano shares reached a high of $2.47 last month after the company provided investors with an activities update for the first quarter of FY21.

Weebit has a current market capitalisation of $207 million.

More reading

• Why is the Weebit Nano (ASX:WBT) share price dropping 7% today?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Weebit Nano (ASX:WBT) share price surged 12% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3mE4SsQ

The Althea Group Holdings Ltd (ASX: AGH) share price has been a poor performer on Monday and has started the week deep in the red.

In afternoon trade the cannabis company’s shares are down almost 6% to 40 cents.

Why is the Althea share price under pressure?

This morning the company released an update on the share purchase plan component of its capital raising.

This follows the successful completion of its $6 million institutional placement last week, which was undertaken at 44 cents per new share. The offer price represents a 10.2% discount to its share price at the time of the capital raising announcement.

Today’s announcement reveals that the company is pushing ahead with its share purchase plan, with the aim of raising a further $3 million from eligible shareholders.

However, given that the Althea share price is now changing hands for 40 cents, the share purchase plan’s offer price of 44 cents per new share isn’t looking very attractive at all.

What does this mean?

Althea has already advised where it plans to deploy the funds from the capital raising.

$2 million is going towards sales & marketing activities, a further $2 million is being used to build inventory, $1 million is being used to support its Althea Concierge platform, $3.7 million is being allocated for research & development activities, and $0.3 million is to cover fees.

Given that the capital raising is not being underwritten, there’s a real possibility that Althea will now fall short of its target and be forced to scale back its plans.

Though, with the share purchase plan opening today and not closing until 15 January 2021, there is plenty of time for the Althea share price to improve and make the offer more attractive to shareholders. Though, only time will tell if that proves to be the case.

More reading

• Althea (ASX:AGH) share price drops lower despite major announcement
• Cannabis share Althea (ASX:AGH) sinks 11% on capital raising and Aphria selldown
• Why Althea, Altium, Fortescue, & Retail Food Group are dropping lower
• Why cannabis company Althea (ASX:AGH) is storming higher today
• Althea (ASX:AGH) share price lifts 10% today. Here’s why

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Althea (ASX:AGH) share price is sinking 6% lower today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2JaB7SY

Paradigm Biopharmaceuticals Ltd (ASX: PAR) shares are jumping higher today after the company provided an update prior to market open this morning. At the time of writing, the Paradigm share price is trading 1.2% higher at $2.50.

What’s driving the Paradigm share price?

The Aussie pharmaceuticals group today released a presentation via the ASX summarising its inaugural research and development (R&D) day. Investors were provided with an update on the company’s Osteoarthritis (OA) Clinical Program alongside R&D pipeline and revenue timeline progress updates.

Following the release, the Paradigm share price has been on the rise, despite the S&P/ASX 200 Index (ASX: XJO) falling 0.3% lower in today’s trade.

Paradigm announced it has received feedback from the European Medicines Agency (EMA) and Food and Drug Administration (FDA). The revised clinical trial program will confirm the minimally effective dose and evaluate increased patient numbers.

Paradigm is looking to confirm its Phase III study and submit its Investigational New Drug (IND) application in the fist quarter of 2021.

Outside of its knee OA application, Paradigm is also exploring opportunities to repurpose its Pentosan Polysulphate Sodium (PPS) drug. The R&D pipeline is focused on the drug’s potential to treat heart failure and acute respiratory distress syndrome as well as possible use for alphavirus-induced arthralgia applications.

Investors have been impressed by today’s update with the Paradigm share price climbing by as much as 3.2% in earlier trade, despite the broad market softness. 

Paradigm indicated a timeline to first revenue for Australia with the company highly confident of receiving global registration once the pivotal Phase III clinical trials are successfully completed.

The company laid out a path to revenue in 2021 while maintaining optionality in future funding and investment decisions.

How have the company’s shares performed in 2020?

The Paradigm share price has been under pressure in 2020, having fallen more than 16% in year-to-date trading. However, shares in the pharma group are up over 110% since the bottom of the bear market in mid-March.

The group’s market capitalisation has fallen to $577.5 million this year, with the company having traded as high as $4.50 per share in February this year.

More reading

• Why Mesoblast, Paradigm, Qantas, & QBE shares are tumbling lower
• Why the Paradigm (ASX:PAR) share price is pushing higher today
• Paradigm (ASX:PAR) share price drops lower on trial update

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Paradigm (ASX:PAR) share price is jumping higher appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38kszl3

The WhiteHawk Ltd (ASX: WHK) share price has been a very strong performer on Monday.

In afternoon trade, the cybersecurity marketplace provider’s shares are up a massive 26.5% to 31 cents.

This means the WhiteHawk share price is now up over 244% since the start of the year.

Why is the WhiteHawk share price rocketing higher?

Investors have been buying the company’s shares on Monday after strong gains were made by US cybersecurity shares on Friday night.

The likes of Crowdstrike, FireEye, and Okta hit new record highs at the end of the week after the US Government experienced one of its worst cyberattacks in history.

According to CNBC, the scale of a sophisticated cyberattack on the U.S. government that was unearthed last week was far bigger than first anticipated.

The US Cybersecurity and Infrastructure Security Agency (CISA) even went as far as to say that the threat “poses a grave risk to the federal government.”

CISA suspects that the attack first began all the way back in March. Since then, it notes that multiple government agencies are believed to have been targeted by the hackers, though only the Energy and Commerce departments have so far confirmed attacks.

What about WhiteHawk?

This news bodes well for WhiteHawk and could lead to an increase in demand for its services in the near future. Particularly given its recent announcement, which reveals that it has updated its software to make it compliant with the new regulations from the Council of Financial Regulators.

That update will allow financial institutions to ensure their own safety and that of their clients.

WhiteHawk’s Executive Chair, Terry Roberts, commented: “Whitehawk remains committed to delivering the most comprehensive marketplace of Cybersecurity online and SaaS services to businesses internationally and invites all Australian businesses to partner with us to make the future of Australian business more secure for each and every one of us.”

“We have achieved our original vision of being able to seamlessly service any company or organization, to mitigate their cyber risks smartly, affordably and continuously,” he added.

This news has also given the BetaShares Global Cybersecurity ETF (ASX: HACK) a big lift on Monday. In afternoon trade the cybersecurity focused ETF is up 6% to a record high.

More reading

• 2 tech ETFs to buy for growth
• 2 high quality ETFs for ASX investors to buy
• 2 ETFs delivering solid returns
• 2 ETFs for ASX tech investors to buy today
• 4 ASX growth shares to buy in December

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETA CYBER ETF UNITS. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the WhiteHawk (ASX:WHK) share price has rocketed 26% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3nCWbjL

The A2 Milk Company Ltd (ASX: A2M) share price dove over 22% last week, although it has regained some of its losses today and is up 1.13% at the time of writing.

The company’s recently released financial guidance revisions, paired with a dip in Daigou sales, seem to have spooked investors and pummelled the a2 Milk share price. 

What does ‘Daigou’ mean and why does it matter?

The term Daigou refers to the act of purchasing goods overseas to resell in mainland China. The impact of Daigou activities on the a2 Milk business is nothing new. The company mentioned the influence of “reseller channels” on its third quarter FY20 revenue back in April — Daigou falls into this category.

At a glance, Daigou’s impact on performance seems pretty straightforward. If lots of people are buying products to bring back to China, it’s good. If they aren’t spending as much money as a2 Milk expects, it’s bad.

However, when we consider the influences that are potentially impacting consumer behaviour here, specifically the effects of COVID-19, things aren’t quite as cut and dry. Further complicating matters are the trade issues currently occurring between Australia and China. Acting CEO Geoff Babdidge doesn’t seem too concerned about that though, he believes Daigou is to blame.

When discussing why the a2 Milk share price has slid (as quoted by the Australian Financial Review) Mr Babdidge said:

It is primarily about the daigou — this is the linchpin on how we established this brand in China over the last five years. The issues we are experiencing are not related to geopolitics with Australia and China.

Australia’s salty relationship with China

While Mr Babidge chooses to focus on the Daigou in his views about a2 Milk’s current share price, the elephant in the room is the trade relationship between Australia and China.

Pricing in losses expected from Daigou numbers is one thing, but predicting the future for business relationships between Australia and China is another issue, one which might loom over some investors as we move into the new year.

What’s coming up for a2 Milk?

With our sights set toward the dawn of 2021, a2 Milk will be soon be welcoming incoming CEO David Bortolussi. Mr Bortolussi joins the business following his most recent role as Group President — International Innerwear, HanesBrands.

The company has also committed a significant marketing budget to continuing its business in China and expanding in the US.

Investors will be waiting to see if these and other upcoming happenings will be enough to boost the a2 Milk share price and carry the company forward.

More reading

• Leading brokers name 3 ASX shares to buy today
• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• Is the a2 Milk (ASX:A2M) share price in the buy zone after last week’s 22% decline?
• These are the 10 most shorted shares on the ASX
• ASX 200 Weekly Wrap: ASX hits new post-March high

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What does China have to do with the a2 Milk (ASX:A2M) share price? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2J6IkTY

Australia’s biggest electricity and gas retailer, AGL Energy Limited (ASX: AGL) has downgraded its earnings guidance for the FY21 financial year. 

This follows the company’s transformer incident at its Liddell Power Station in New South Wales last week. At the time of writing, the AGL share price has fallen 5.75% to $12.46.

What did AGL announce today

AGL announced that it now expects underlying profit after tax (NPAT) for FY21 to be between $500 million and $580 million, down from the previous guidance range of $560 million to $660 million.

More reading

• Why the Origin Energy (ASX:ORG) share price has dipped today
• Top brokers name 3 ASX shares to sell next week
• AGL (ASX:AGL) shuts coal power unit after serious injury
• Leading brokers name 3 ASX shares to sell today
• Is AGL (ASX:AGL) really offering a 7% dividend yield today?

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the AGL (ASX:AGL) share price has fallen 6% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3avFNOE

With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Morgans, its analysts have retained their add rating but slashed the price target on this infant formula company’s shares to $12.20. The broker notes that the company has reduced its guidance due to weaker than expected trading in the daigou channel. And while Morgans has reduced its earnings forecasts by almost a third for the next three years, it still believes its shares are good value at the current level. Especially given its strong performance on mainland China. The a2 Milk share price is trading at $10.22 this afternoon.

ELMO Software Ltd (ASX: ELO)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and lifted the price target on this cloud-based HR and payroll platform provider’s shares to $9.70. This follows the announcement of its acquisition of Webexpenses last week. Its analysts believe there are meaningful cross selling opportunities from the deal. And given its current share price, the broker feels the risk/reward on offer with its shares is compelling. The ELMO share price is fetching $6.60 on Monday.

Nufarm Ltd (ASX: NUF)

Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $4.80 price target on this agricultural chemicals company’s shares. It was pleased with the company’s improved performance during October and November. And while it isn’t getting overly carried away and notes that its key trading periods are still to come, it is certainly a positive. Especially given how it is experiencing growth in all segments. The Nufarm share price is trading at $4.29 today.

More reading

• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• Is the a2 Milk (ASX:A2M) share price in the buy zone after last week’s 22% decline?
• These are the 10 most shorted shares on the ASX
• ASX 200 Weekly Wrap: ASX hits new post-March high
• Synlait Milk (ASX:SM1) share price on watch after earnings halve due to a2 Milk (ASX:A2M) update

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2WAjfUs

On the ASX this week, much is being made of S&P Global Inc’s quarterly index rebalancing that takes place today. Indexes work by constantly updating their inclusions and weightings to reflect the status of the broader market of the time. Take the S&P/ASX 200 Index (ASX: XJO) for instance.

This index’s purpose is to measure the performance of the 200 largest companies in the ASX. These 200 companies obviously change over time, so the index needs to be on top of that for it to work effectively. Hence why it is adjusted and rebalanced every quarter. Growing companies might join the index, replacing those that might be out of favour or stagnating.

As an example, this week sees Afterpay Ltd (ASX: APT) join both the ASX 20 and the ASX 50 indexes in place of Insurance Australia Group Ltd (ASX: IAG) for the former and Oil Search Ltd (ASX: OSH) for the latter.

The ASX 200 will itself be welcoming Kogan.com Ltd (ASX: KGN) and Reece Ltd (ASX: REH) in place of Avita Therapeutics Inc (ASX: AVH) and Cooper Energy Ltd (ASX: COE).

But as our ASX indexes are being adjusted, so are those around the world. Most dramatically this week is the US S&P 500 Index (SP: .INX).

The S&P 500 is perhaps the most popular and widely tracked index in the world. It houses 500 of the USA’s largest companies, including Apple Inc (NASDAQ: AAPL), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B). Now the S&P 500 is a little more strict than other indexes. Not only does a company’s market capitalisation have to be among the top 500 in America, but it also needs to satisfy other requirements, such as consistent profitability and ample liquidity.

Tesla to make blockbuster index debut

Those conditions have prevented one of the US’s now-largest companies – Elon Musk’s electric car and battery manufacturer Telsa Inc (NASDAQ: TSLA) – from being a part of the S&P 500 Index. Until now that is. Back in September, we learnt that Tesla had finally received the green light for S&P 500 inclusion. And tonight (our time), Tesla will officially join the S&P 500 for the first time.

But this is a rather special inclusion. Normally, a company tends to join the S&P 500 at the ‘bottom of the table’ and grow into the index over time if it is successful. But Tesla’s meteoric rise over the past year or so has meant that it is now the largest company to ever join the index.

Recent reporting from CNBC tells us that Tesla, with a current market cap of US$659 billion, will carry an approximate weighting of 1.69% when it joins tonight. That would make it the fifth-largest stock in the index (or sixth if you include Alphabet’s two share classes as one). This inclusion means that the scores of fund managers and exchange-traded funds (ETFs) that track the S&P 500 all have to buy shares of Tesla to meet the new weightings. That’s likely a factor in the recent Tesla share price performance: Tesla shares are up more than 33% over the past month alone.

More reading

• Under attack! Why the WiseTech Global (ASX:WTC) share price is down 9%
• The most crazy ASX chart of 2020
• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• Why the Cimic Group (ASX:CIM) share price is on watch today
• Forecast double-digit surge in Aussie dollar could put brakes on ASX rally in 2021

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Apple, Berkshire Hathaway (B shares), and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and Kogan.com ltd and recommends the following options: short January 2021 $200 puts on Berkshire Hathaway (B shares) and long January 2021 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Apple, Avita Medical Limited, Berkshire Hathaway (B shares), and Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What will happen when Tesla (NASDAQ:TSLA) joins the S&P 500 today? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3reniEf

Skin Elements Ltd (ASX: SKN) shares are surging higher today following the company’s announcement it has entered into a distribution agreement that would see its products sold and marketed online. At the time of writing, the Skin Elements share price is trading 8.57% higher at 7.6 cents.

In earlier trade, Skin Elements shares climbed by as much as 10% before retreating to their current level.

What’s moving the Skin Elements share price?

The Skin Elements share price is on the move after the company reported it has entered into an agreement with West Coast Naturals Pty Ltd. The agreement relates to the online sales of Skin Elements’ SE Formula range of organic health care and beauty products.

According to the release, West Coast Naturals is an Australasian business specialising in the sale of natural and organic health brands through its e-commerce platform, https://ift.tt/3p9nenb. 

The platform specialises in a range of curated all-Australian natural health and beauty products sold directly to consumers globally, with a particular focus on South East Asia.

West Coast Naturals will offer Skin Elements an end-to-end e-commerce solution and access to West Coast Naturals’ digital platform currently in development.

The aim is to build meaningful scale for Skin Elements’ SE Formula brand portfolio across Australia and Asia. The collaboration will initially target three priority markets of Australia, Singapore and Hong Kong.

The agreement is for an initial term of three years, with no minimum sales commitment in the first twelve months. Skin Elements and West Coast Naturals will negotiate and agree minimum sales commitments for the second and third 12-month period.

New e-commerce platform

Skin Elements notes that West Coast Naturals has only recently been established, and has not yet achieved sales through its e-commerce platform which is currently in development.

The company says investors should be aware there can be no guarantee Skin Elements will achieve increased sales through this agreement.

Skin Elements executive chairman Mr Peter Malone remains optimistic, saying, “The distribution agreement with West Coast Naturals provides Skin Elements with further opportunity to expand our presence in Australia and Asia, which show strong demand for organic and toxin free health and beauty products.”

About the Skin Elements share price

The skincare company has been making progress recently. Two weeks ago, it acquired 40% of Sambora for $850,000. 

Sambora owns BeachToes, which is an Australian-made range of cruelty-free, natural nail polishes formulated to maintain quality and colour.

The Skin Elements share price has shot up by over 650% in 2020, having started the year at 1 cent. It is however, still a long way off from its 52-week high of 12.5 cents.

The company commands a market capitalisation of $23 million.

More reading

• Why the Allegra (ASX:AMT) share price is rocketing 20% higher today
• Star Entertainment (ASX:SGR) share price drops on new restrictions
• Under attack! Why the WiseTech Global (ASX:WTC) share price is down 9%
• Here’s why the Kogan.com (ASX:KGN) share price jumped over 7% higher today
• The most crazy ASX chart of 2020

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Skin Elements (ASX:SKN) share price climbs 9% today. Here’s why appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2WEDZKJ