NEW YORK, May 31, 2022 (GLOBE NEWSWIRE) -- Diamond Equity Research, a leading equity research firm with a focus on small capitalization public companies has initiated coverage of Bon Natural Life Limited (NASDAQ: BON). The in-depth 22-page initiation report includes detailed information on the Bon Natural Life’s business model, services, industry, valuation, management, and risks.
The full research report is available here. Highlights from the report include:
- Increasing Focus on Developing Innovative Products - Using its technical expertise, BON has undertaken the development of several new products. This includes the formulation of Glucoraphanin and Sulforaphane to increase their consumer product offerings. The company has adopted a strategy of continuous product expansion to capture a greater share of the growing health and personal care market. Bon is a pioneer in discovering and developing natural alternatives to existing synthetic ingredients. The company consistently explores new applications for its existing products, which helps maintain its competitiveness in the industry.
- Niche Market with Profound Expertise - The natural health and personal care market is a niche market, and Bon plans to capitalize on its expertise in this sector. Bon has gained superior technological capabilities and invented proprietary processes with over sixteen years of research and development. This allows Bon to reduce costs, increase efficiency, and target higher product quality than its competitors. Bon, along with its subsidiaries, is an integrated supplier of natural ingredients. As a result, it can meet demand and absorb any disruptions in the supply chain network better than other companies in the segment. This combination of unique capabilities and expertise in a niche market uniquely positions Bon to achieve sustained growth rates above the industry average.
- Industry Demand to Remain Robust - With an increasing global population and awareness about long-term healthy living, the health and wellness industry is poised to experience sustained growth. The boom in e-commerce, especially during and after the COVID-19 pandemic, acted as a catalyst in increasing demand for such products. Bon enjoys healthy margins and has a structure allowing it to pass on increases in input costs to consumers due to higher demand. Major markets include China and the rest of Asia, where both per capita income and healthcare awareness are increasing rapidly. As a result, demand for health and beauty products is expected to remain robust.
- Capacity Additions and Scaling of Existing Units - Bon is looking to multiply its production capacity in the subsequent years. It is on track to start production at its Yumen plant by September 2022, its third production facility in China. This facility will increase the production capacity of fragrance compounds and bioactive ingredients by 200% and a potential increase in revenue by 150%. The second phase of expansion at this facility will be initiated to increase production capacity for consumer and functional health products. The Tongchuan site is also under expansion, with additional production lines being set up to increase capacity.
- Valuation - We valued Bon Natural Life Limited using DCF as our preferred methodology. Using a discount rate of 11.28% and a terminal growth rate of 1.5%, we have valued the company at $122.81 million or $14.64 per share, contingent on successful execution by the company. The company is targeting continuing its growth momentum aided by industry tailwinds, capacity expansion, niche market expertise, and an experienced management team.
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 05/31/2022, the issuer had paid us $35,000 for our services, which commenced 04/22/2022 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 05/31/2022. 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 and press release 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
