ANO released an update guiding for revenue remaining on track to achieve $13.5 million for FY, on improved gross margins and reduced payroll costs.

ANO outlined a series of headwinds on presentation slide 3, and outlines an increase in inventories, with the aim of reducing supply chain lead times, and customer inventory requirements.

NASDAQ listing remains on the agenda, aiming for early 2023 listing.

Competitors are raising prices, and have longer lead times, making ANO's product more attractive.

DISC - HELD.

October 28, 2021, ANO sent a 41.5 Tonne shipment to the US.

By my records, this is the largest shipment ever. largest shipment I have on my record prior to this one was 17 Tonnes in December 2019.

On its own, not a big deal, but worthwhile monitoring if further shipments follow......

In case anyone was wondering why Advance Nanotek experienced a share price rally today, I came across a tweet from a Chris Silvestro, flagging the following notification:

"Please be advised that on or about September 27, 2021, the US FDA intends to issue a proposed administrative order under Section 505G(b)(2) of the Federal Food, Drug, and Cosmetic Act to amend the OTC monograph for suncreen drug products."

An OTC monograph is a “rule book” for each therapeutic category establishing conditions, such as active ingredients, uses (indications), doses, labeling, and testing, under which an OTC drug is generally recognized as safe and effective (GRASE) and can be marketed without a New Drug Application and FDA pre-market approval. 

There is a possibility that Zinc Oxide and Titanium Oxode will be the only two approved GRASE UV filters..........This will increase ANOs TAM significantly. 

More will be known in a week or so.

DISC - I HOLD.

Hi all,

Over the past week, Beiersdorf (Nivea, Coppertone), Johnson & Johnson , and Edgewell (Banana Boat) have reported their Q2/H1 results.   They point to a recovery in demand for ANO's Zinclear product.  Key takeaways:

Beiersdorf: 

• Coppertone: strong double digit growth in the world’s largest sun care market (USA).

Johnson & Johnson:

• 16.2% growth in Skin health / beauty segment (they didn't break out sun care) - Growth also partially offset by divestitures. 

Edgewell:

• The increase in organic net sales was primarily driven by Sun Care growth of nearly 50%, reflecting a sharp recovery in consumption as compared to the heavily COVID-19 impacted prior year period in the U.S. market.

DISC - HELD

This may not be that significant, as I do not know what volume of product Ethical Zinc sell, but I do know it uses ANO Zinclear product.   

Hmm...I am pretty nervous about the numbers, but ANO have the benefit of the 'Lev put' (what will this cost minority shareholders?).  ANO has been hit hard by COVID-19.  Key takeaways:

1) Receivables over 61 days has ballooned to $3.4 M, up from $171K in prior year.  A key distributor is carrying excess product and is unable to onsell it, and the company has agreed to extended payment terms, which are currently being met. 

2) Inventories have ballooned to $6.4 M, up from $1.1 M in prior year.   CEO reports sales will be down over the next few months as customers reduce inventory, and ANO are building up inventory in anticipation of a v-shaped sunscreen recovery by Q4 2021.  

3) Balance sheet as at the end of year has $260 k in cash.   Lev will support ANO's liquidity requirements. The Lev put is in place.  

 4) ANO has set a goal of capturing 2-3% of active ingredient market share by FY2024.   SUnscreen market forecast to be $24 Billion (USD?).  If 5% of the market is active ingredients, that equates to a target revenue of around $50 M - Let me know if my estimate is wrong please, as it seems a little lower than I expected.   

5) Reportedly increasing competition from Everzinc.   This may result in pressure on margins.???

6) Forecast for HY2021 is for it to be better than HY FY2019.   No guidance provided, contrary to last year, this may mean revenue is expected to be flat FY2021????

7) 22 employees on Jobkeeper and no bonuses are to be paid, board and management wage freeze.  

8) Sales up to February were running at around $2 Million per month, post February, sales slumped to $0.4 M per month. 

9) ANO are expecting the sunscreen market to begin to recover by Q4 2021, and are positioning supplies and inventories for an anticipated ramp up in demand as manufacturers rebuild depleated stockpiles.  

It looks pretty bleak over the next 6 months, and if there is a vaccine / or a second European wave doesn't hit hard, there may be green shoots in H2 2021.   

DISC - I hold.

Today ANO released a further update, with the new plant commissioning on schedule, and on the verge of full production. Profit after tax of $1.8 M over the past 3 months ( $7.2 M run rate).  

Forecast revenue for FY19 upgraded to $12.6 M up 18% from previous update 2 months ago.   

Production of 15T per week as of February will increase to 40T per week by the end of CY 2019.   Current production rate is at 30T with new boilers online this coming week.  

FY20 Profit after tax should be around $10M.