Cellmid Ltd (ASX:CDY) has maintained leadership in developing and enhancing novel products to tackle conditions commonly associated with ageing through ongoing research and continues to grow its portfolio, launching skincare products and supplements.
Although COVID-19 halted retail momentum and supply chains during the second half of FY2020 and in FY2021 the company secured Chinese distribution for all branded products in December 2020 while increasing investment into ecommerce through online businesses in Australia and the USA.
Cellmid’s growth strategy for FY2021 to FY2023 includes three stages – grow revenue, achieve profitability and focus on brand.
Cellmid plans to target each stage with the following steps:
- Grow recurring revenue through Chinese distribution agreements, ecommerce, new products and partnerships;
- Optimise deployment of capital by focusing on strong cashflow generating opportunities, reducing costs and enhancing economies of scale; and
- Focusing on product innovation leveraging expertise in hair and systems biology while perpetuating thought leadership in hair science and generating new intellectual property.
Agreements contribute to overall revenue
In December 2020 Cellmid signed an exclusive master distribution agreement with Ourui health Management Ltd for the distribution of its Japanese Ju-Ju® and Lexilis® branded, anti-ageing hair and skincare products.
In January, Cellmid received the first order for 66,000 bottles of Jo-Ju® shampoo – the first part of the 500,000-unit order requirement for the first 12 months of the 10-year contract.
This agreement, along with the re-negotiated agreement in the first half of 2021 for distribution of évolis® will both contribute to around 40% of the company’s revenue by FY 2023.
Investing in opportunities with potential
To achieve profitability, Cellmid aims to optimise capital deployment through investing in opportunities with strong cash-generating potential and implementing operational efficiencies through automated inventory, accounting, and customer management systems.
Additional strategic ingredients will be sourced to improve the cost of goods and transition to sustainable packaging such as biodegradable or recyclable materials.
The company will remain focused on taking advantage of economies through exploring opportunities for large scale sourcing of ingredients and packaging as well as utilising multiple supply channels for continuity.
Cellmid will continues its market penetration and sales in China through cross border ecommerce, social commerce and import permits as well as through sales growth in the USA and Australia – which will be made through existing channels (Amazon, Priceline, Dermstore and Tru Beauty).
The company is targeting Japanese sales growth from increased export of heritage brands from Japan to other major markets and is set to launch Korea’s sales pipeline by distributing evolis through third-party distributors in FY2022.