Next Investors logo grey

Invigor surges 25% as Sun Asia delivers

Published 19-JUN-2019 10:30 A.M.

|

3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

Invigor Group Ltd (ASX:IVO) through its recently acquired Sun Asia Group, has secured a A$25 million per annum sale agreement for the supply of Australian produce into Asia, resulting in its shares opening 25% higher on Wednesday.

This is the first material contract since Sun Asia was acquired by Invigor on May 29, 2019, an event that resulted in the company’s shares doubling.

Subsequently, news that it has been able to quickly deliver on the anticipated benefits of the acquisition should be equally well received.

The annual sales agreement has been negotiated at healthy margins, and payment for the product will occur before shipment.

In terms of the agreement, the first $A2 million of Australian produce is contracted for delivery in the coming months.

Prominent Indian agricultural group

The customer is Mayuresh Protenz one of India’s largest agriculture companies and it is a division of Indian conglomerate Mayuresh Group.

Mayuresh Protenz has supply agreements with a broad range of Asian customers and Sun Asia will supply products to these customers directly from Australia utilising the Smart Farm solution, comprising products including chick peas, table grapes, stone fruit and citrus.

In what would be an outstanding commercial arrangement, Mayuresh Protenz is considering making Sun Asia its exclusive Australian supplier.

The sourcing of supply of Australian produce is a critical element of the Smart Farm division together with the establishment of distribution systems.

Not only is this extremely significant in terms of generating revenues, the agreement with Mayuresh Protenz is also a show of faith in Sun Asia, demonstrating to Australian producers that the group is able to deliver strong and reliable Asian customers.

Client examines Sun Asia’s ability to upscale

Understandably, given its position as a high profile agricultural group, Mayuresh Protenz thoroughly examined Sun Asia’s supply channels, quality control and relationships with farmers in order to determine its ability to provide seamless delivery of product during and beyond this initial contract.

From a broader perspective, Invigor is making excellent progress in developing distribution channels and systems with Winning Group and their EasyGo Smart Retail division and the potential to utilise WeChat as a marketing channel.

Highlighting the added benefits of Invigor’s technological expertise, chief executive Gary Cohen said, “This Sales Agreement is a pleasing start to Sun Asia Group’s Farm-to-Plate growth strategy and Mayuresh Protenz is an excellent partner that gives us wide distribution channels into multiple Asian markets.

“What attracted them to Sun Asia Group was the excellent relationship that Sun Asia has with Australian producers and the potential that Invigor’s technology can bring to this potential partnership.

“They are a sophisticated food supplier that sees value in our back-end capabilities and payment channels, especially WeChat Pay which is a growing and accepted payment channel for many of their end customers.”

On a standalone basis, this is an extremely promising development for Invigor that could provide further share price momentum, particularly given the prospect of ongoing distribution agreements.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.