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Thu Aug 11, 2022 KW Excerpt: Kaiser Watch August 11, 2022: Verde Agritech Ltd (NPK-T) Publisher: Kaiser Research Online Author: Copyright 2023 John A. Kaiser
(0:25:32): Verde Agritech reported results for the first half of 2022. Did they meet their guidance?
Verde Agritech pretty much hit its guided targets for H1 of 2022, but the stock has not taken off because NPK has not yet told the market that Plant 2 is operational. The output during H1 reflected maximum existing capacity, but for NPK to achieve its H2 guidance Plant 2 needs to be operational. NPK indicates this should happen in August for Phase 1, and also indicates Phase 2 which brings capacity to 2.4 million tpa beyond the existing 600,000 tpa will be operational in early Q4. The key shipping window is July through October so it is critical that Plant 2 become operational. The second question is whether or not NPK will have the orders if Plant 2 becomes operational in time to produce the K Forte output projected by the May guidance. KCl cif prices have declined to $800/t from the $1,040-$1,270/t range during H1, but NPK's guidance is still based on CAD $109/t which translates into about USD $510/t KCl, So there is a buffer to meet the revenue and EBITDA guided targets. However, what NPK accomplished in H1 is impressive compared to 2021 and earlier years. The redomiciling from UK to Singapore has been done, though there is still a delay with US brokerage firms being able to trade the stock in the OTC market. The company can't officially talk about its application for NASDAQ listing, but CV seems to think that this may occur in September, by which time hopefully we have heasrd Plant 2 phase 1 is grinding out K Forte. The US listing will be very important because it will expose the stock to the younger generation that trades through platforms like Robin Hood where you can own as little as a single share that is not bought at odd lot prices because of the way the order flow is managed. US institutions interested in an agriculture growth story with an ESG spin and a tech dimension will also come knocking. On Aug 11 NPK was presenting at a Canaccord Growth Conference in Boston where it was the only company with mining component to its growth story. The other thing that could kick in when the US listing is secured is a surge of online Amazon purchases of Super GreenSand. Buying a $10 bag for $38 is not quite the same as buying a Tesla, but it is within financial of reach of Robinhooders. Sales of Super GreenSand are never going to be more than a drop in the bucket for NPK's growth story, but it allows investors to have a tangible connection to the product underpinning their dreams of NPK becoming a $50-$100 stock as it gradually ends up supplying more than 50% of Brazil's potash needs in a soil friendly manner.
NPK Guided and Actual results for 2022 presented in quarters
NPK Guided and Actual results for 2022 presented has halves
Don't just buy NPK stock, buy a bag of Super GreenSand from Amazon!
