Improved Profitability and Strong Business Outlook
Eevia Health Plc (publ) (”Eevia Health”, “Eevia” or “the Company”) is at a stage where the Company is scaling up the production capacity, focusing on higher margin extracts, and developing new proprietary ingredients targeting eye disorders, which constitute strong value drivers ahead. Having a broad product portfolio with a market demand, Eevia is estimated to enter a rapid growth phase where an EBIT of EUR 4.8m is forecasted. Based on an applied EV/EBIT multiple of 4.5x on the estimated EBIT of EUR 4.8m in year 2026, and a discount rate of 14%, this yields an implied value per share of SEK 4.5 in a Base scenario. Given that Eevia takes steps in the right direction and is able to capitalise on the structural market trends, Analyst Group see a potential for the Company to reduce the valuation discount going forward.
- Riding on the ESG-Trend by Offering Organic and Sustainable Health Ingredients
The raw material that Eevia uses is sourced from nearby areas in Northern and Central Europe which minimizes the carbon footprint, the traceability of the products and allows for a more resilient supply chain that is less affected by global disruptions. Moreover, the wild organic raw material is taken from abundant resources that are either not utilized at all or underutilized which respects the natural ecosystem. Lastly, Eevia selects suppliers carefully in accordance with the Company’s quality and sustainability criteria. Having high-quality organic raw material close to the production site in Seinäjoki gives Eevia a competitive advantage to deliver and capitalise on the sustainability trends.
- Operating in Vast Markets with Strong Macro Trends
The global market for nutraceuticals is estimated to be worth USD 317bn in 2023 and is projected to reach USD 599bn in 2030 which represent a CAGR of 9.4% during the forecast period where the growth is attributed to changing consumer preferences and demographics along with increases in R&D activity. Regarding the plant extract market, it is estimated to be worth USD 50b in 2023 and is projected to reach USD 74b in 2030 which represents a CAGR of 5.9%. Growth drivers for the plant extract market include rising awareness of synthetic flavour side-effects and health benefits offered by plant-based medicine. As the awareness of Eevia’s product offerings and brand value grows over time, the Company is expected to benefit from market tailwinds.
- Business Outlook and Value Drivers
Although the demand from customers may slow down in the medium term, we see that Eevia has taken proactive measures, such as improving production to free up capacity and streamlining the cost structure to counteract an eventual slowdown in demand, which has also benefitted the Company’s operating results lately. Additionally, Eevia has a substantial order amounting to EUR 2.1m which is estimated to be invoiced during Q2-23, and thus constituting a strong value driver going forward, creating further sales momentum.
Ledning & Styrelse
Samtliga analyser av bolag från och med år 2020 betygssätts utifrån ett nytt betygssystem - Värdedrivare, Historisk Lönsamhet och Ledning & Styrelse sträcker sig från 1 till 10, där 10 är högsta betyg. Riskprofil sträcker sig från 1 till 10, där 10 är att anse som högst risk. Aktieanalyser av bolag publicerade innan 2020 har betygssatts utifrån en annan modell.