Since New Year, the Heliospectra share has dropped 19 % and now costs 6.15 SEK. In December, Heliospectra made an oversubscribed issue at 6.5 SEK. After the issue, the company changed CEO. The year-end report showed growth … but perhaps not as much as expected. The growth in the second haft of 2016 was 35 % – and 68 % full year 2016. In other words, growth was high in the first half of 2016, but lost momentum in the second half. Therefore, there is a reason to keep an extra eye on how Heliospectra develops.
I have never figured out when Heliospectra announces an order – and when they do not. During 2016, they announced 6 orders – one of them without order size – but these represented only half of the total turnover. Until now, 2017 has brought us four announced orders. The announced amounts sum up to 6.5 MSEK in total. There two things worth noticing in this – besides the higher number of order to announce.
Number of orders is good news
First, 6.5 MSEK is 49 % of the turnover in second half of 2016. I assume that behind these orders there are a bulk of unannounced orders as well and minor purchases, replacements etc. If the picture from 2016 is unchanged and the company only announces half of the turnover as orders, we can safely assume that the high growth of first half of 2016 is back. If half the turnover comes as announced orders, total turnover by the end of Q1 equals the turnover in the last 6 months of 2016.
The second thing worth noticing is that costumers come from all over the world: Macedonia, Canada, Hawaii and Australia. Heliospectra has for matter of market growth and limited resources focused on the US cannabis market. This is a new market with a high growth rate. For a newcomer as Heliospectra it is therefore easy to gain foothold. Three of these orders comes from the cannabis segment (Macedonia, Canada and Hawaii), but he company has managed to broaden the segment geographically outside the US. This is good news. The Australian order is for the university in Sidney and falls in line with prior orders from research institutions and botanical gardens.
I expect that the management interim report at the end of April will show a company on track – and hopefully more investors will discover the potential and drive the cheap share beyond the issue price.
Read my latest post on Heliospectra (December 2016).