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Diamond Equity Research Releases Update Note on Bon Natural Life Limited (NASDAQ: BON)

/EIN News/ -- NEW YORK, Aug. 08, 2022 (GLOBE NEWSWIRE) -- Diamond Equity Research, a leading equity research firm with a focus on small capitalization public companies has released update note on Bon Natural Life Limited (NASDAQ: BON). The update note includes information on Bon Natural Life’s financial results, management commentary, recent developments, outlook, risks, and our revised valuation estimates.

The update note is available here. Highlights from the note include:

  • H1 2022 Earnings Update - For the first half of 2022, the company reported y-o-y revenue growth of 17.0% to $13.68 million. The operating income grew by 10% to $2.78 million. A significant portion of the company’s top-line growth was driven by price increases across its three segments. Fragrance compounds, health supplements, and bioactive food ingredients saw a price increase of 64.1%, 11.2%, and 79.2%, respectively. Pandemic challenges, supply chain issues, and raw material shortages led to a considerable increase in raw material prices which were comfortably passed on with selling price increases. This has also been a major reason for 26% and 37.5% de-growth in sales volume in both fragrance compounds and health supplements. The sales volume for bioactive food ingredients saw a y-o-y increase of 47.5%. Gross margins expanded by 70bps, to 29.5%, owing to the company’s ability to pass on increasing costs. Even though the company’s results were impacted by short-term headwinds, we believe the company’s ability to develop and launch new products within the niche market and the upcoming capacity additions will likely aid its top-line and bottom-line growth over the short to medium term.
  • New Product Launches - The company recently launched a new product, adding to its growing portfolio of health supplements. The new cruciferous vegetable-based probiotic powder drink has the ability to potentially inhibit the proliferation of Helicobacter pylori and help regulate the digestive system. Approximately 55.8% of the Chinese population were infected with H. pylori infection, a major global health problem. We believe the successful rollout of this new powder drink will prove to be an additional growth driver for the company, allowing it to capitalize on this huge marketable opportunity in China. The management also expects to develop and launch other cruciferous vegetable-based consumer products.

    Additionally, the company received the initial purchase order for its first female personal care product, FeatherPure, an all-natural product with no antibiotics, fragrance, harmful chemical additives, or harmful side effects. The management expects FeatherPure to bring approximately $3 million in revenue in the next two years.
  • Capacity Additions, A Major Near-term Catalyst - The company’s Yumen plant commercialization and expansion under the Tongchuan plant remains a major near-term catalyst. Yumen plant commissioning is on schedule and forecasted to commence around September 2022. This facility will increase the production capacity by 200% and a potential increase in revenue by 150%.
  • Valuation - We have updated our estimates for the year, taking into account management expectations and short-term supply chain issues. Additionally, we have incorporated the updated discount rates, cash balance, and comparable company analysis. Rolling over our valuation methodology yielded a per-share value of $13.95 per share, contingent on successful execution by the company.

About Bon Natural Life Limited

Bon Natural Life Limited engages in the research and development, manufacture, and sale of functional active ingredients extracted from natural herb plants in the People’s Republic of China and internationally. The company primarily deals in three product segments, fragrance compounds, health supplements, and bioactive food ingredients.

For more information, visit http://www.bnlus.com/

About Diamond Equity Research

Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on major institutional investor platforms including Factset, Morningstar, and Thomson One.

For more information, visit https://www.diamondequityresearch.com.

Disclosures:

Diamond Equity Research LLC is being compensated by Bon Natural Life Limited for producing research materials regarding Bon Natural Life Limited, and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however, the views in the report reflect that of Diamond Equity Research. All payments are received upfront and are billed for an annual or semi-annual research engagement. As of 08/08/2022, the issuer had paid us $35,000 for our services, which commenced 04/22/22 and is billed annually. Diamond Equity Research LLC may be compensated for non-research related services, including presenting at Diamond Equity Research investment conferences, press releases and other additional services. The non-research related service cost is dependent on the company, but usually do not exceed $5,000. The issuer has not paid us for non-research related services as of 08/08/2022. Issuers are not required to engage us for these additional services. Additional fees may have accrued since then. Although Diamond Equity Research company sponsored reports are based on publicly available information and although no investment recommendations are made within our company sponsored research reports, given the small capitalization nature of the companies we cover we have adopted an internal trading procedure around the public companies by whom we are engaged, with investors able to find such policy on our website public disclosures page. This report and press release do not consider individual circumstances and does not take into consideration individual investor preferences. Statements within this report may constitute forward-looking statements, these statements involve many risk factors and general uncertainties around the business, industry, and macroeconomic environment. Investors need to be aware of the high degree of risk in small capitalization equities including the complete loss of their investment. Investors can find various risk factors in the initiation report and in the respective financial filings for Bon Natural Life Limited.

Contact:

Diamond Equity Research
research@diamondequityresearch.com 


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