Investorideas.com, an investor research portal specializing in
sector research for independent investors, issues CFA commentary on
stevia stocks/agriculture stocks including Sunwin Stevia (OTCQB:
SUWN). Patrick J. Murphy of Murphy Analytics LLC discusses the
'Global Stevia Market Opportunity.'
The Global Stevia Market Opportunity
Patrick J. Murphy
Sunwin Stevia International, Inc. is engaged in the production
and sale of zero calorie, all natural sweeteners (Sunwin Stevia™
Extracts). With operations based in China, Sunwin has built an
integrated global firm with the sourcing and production
capabilities to meet the needs of consumers throughout the world.
The Company's operations are organized into two segments --
Stevioside, sold globally, and Chinese Medicine products, sold
within the PRC. Recognizing a global opportunity for all natural
sweeteners, Sunwin is working with major international distributors
in the U.S., EU and Asia Pacific including WILD Flavors(i) and
Domino Foods(ii) to develop and distribute stevia related
products.
Select Stock Trading Data
Recent Stock Price: $0.23
Shares Outstanding: 167 million
Float 128 million
Recent Market Cap: $38.4 million
52 Week Range: $0.13 - $0.40
Exchange: OTCQB
Ticker: SUWN
URL: http://www.sunwininternational.com/
Data sourced from Yahoo! Finance; otcbb.com; Company filings
SUWN's distribution agreement with WILD Flavors Gmbh partners
the company with one of the world's leading producers of natural
ingredients for the food and beverage industry. WILD's products are
developed for use in a wide range of product applications,
including bakery, beverage, confectionery, culinary, dairy, savory,
snack and sweet. WILD's Sunwin Stevia™ can be integrated into
multiple applications including foods, near waters, tea, carbonated
soft drinks, fruit juice, hard candies, chewing gum and chocolate
products. WILD manufactures product in facilities around the globe,
with a 190,000 sq. ft. state of the art facility in Cincinnati,
Ohio. Commenting on the agreement with WILD, SUWN CEO Dongdong Lin
stated: "We believe that with WILD's expertise in flavor
enhancement and their dominance in this space, both our companies
are uniquely positioned to capitalize on the growing market trends
towards healthier and natural food and beverage products."
The opportunity in the stevia market is driven by multiple
trends including not only changing food preferences, but also
medical needs, particularly for weight loss.
- The Organic Movement: According to the Organic Trade
Association (OTA)(iii), the US organic food and beverage market
reached $29 billion, a 168% compound annual growth rate since 2000,
but still representing only 4% of $673 million total food sales in
the U.S. in 2010. This trend is illustrated in the data captured in
the OTA's annual survey on the attitudes(iv) of U.S. consumers in
which 78% of families reported purchasing organic food, 40% of
families reported buying more organic food than the year before,
and 72% reported being familiar with the USDA's Organic seal.
- The Rise in Obesity and Prevalence of Diabetes: According the
American Diabetes Association(v), approximately 26 million people
in the U.S. have diabetes, representing 8.3% of the population,
with 1.9 million new cases in 2010. The high prevalence of diabetes
is not surprising in light of the data from the Centers for Disease
Control (CDC)(vi), which reports that during the past 20 years,
there has been a dramatic increase in obesity in the United States
and rates remain high at nearly 36% of U.S. adults and
approximately 17% of children and adolescents aged 2-19.
- Metabolic Syndrome Affects nearly 50 Million(vii) in U.S.
Alone(viii): As addressed by the National Institute of Health -
"Metabolic syndrome is a name for a group of risk factors that
occur together and increase the risk for coronary artery disease,
stroke, and type 2 diabetes. Metabolic syndrome is becoming more
and more common in the United States. Researchers are not sure
whether the syndrome is due to one single cause, but all of the
risks for the syndrome are related to obesity."
While this compelling market opportunity has attracted
competitive products from some food industry titans such as
Cargill, ADM, McNeill Laboratories, Ingredion Incorporated,
PureCircle Limited, etc., the scale of their operations implies
that the upside contribution from stevia related products is masked
at least in part, by the other segments. Following are comments on
some of the smaller stocks with stevia and related products or
services as part of their operations:
- GLG Life Tech Corporation: On 11/14/12, GLG, whose business is
the agricultural and commercial development of high quality stevia
and all natural and zero calorie food and beverage products,
reported $5.8 million in quarterly sales, a substantial increase
over the prior year's quarter although revenue for the 9 month
period was down 45% relative to 2011.
- Global Stevia Corp.: GSTV is a development stage company
focused on maximizing the efficient production of stevia leaf. GSTV
plans to expand operations by investing in the development of
larger test plantations and the acquisition of large parcels of
land to have a commercially grown, fully mechanized stevia
plantation. Concurrently, GSTV plans to build out propagation labs
to propagate and develop stevia varieties and cuttings. Through the
period ended 8/31/12, GSTV had not reported revenue and the Company
does not expect revenue in the upcoming year.
- Stevia Corp: STEV is a development stage company with plans to
generate revenues by providing farm management services, the sale
of inputs to stevia growers, the sale of stevia on its own farmed
property, and the sale of stevia related products. STEV has
reported(ix) that the Company expects significant revenue in 2013
subject to obtaining capital.
- Stevia First Corporation: STVF is engaged in the cultivation
and harvest of stevia leaf and the development of stevia products.
Through 9/30/12, the Company had not reported revenue.
- Stevia Nutra Corp.: STNT, focused on stevia agronomics
including plant breeding, proprietary agricultural practices and
post-harvest techniques. Through its fiscal year end, 7/31/12, STNT
had not reported revenue.
- Sunwin Stevia International (OTCQB: SUWN): For the quarter
ended 7/31/12, SUNW reported revenue of $3.2 million, approximately
77% of which was from the sale of stevia related products with the
balance coming from the sale of Chinese medicines. Stevia revenue
increased approximately 19% over the preceding year. For the 12
months ended 7/31/12, SUWN quarterly revenue ranged from $2.9
million to $3.6 million.
A recent report(x) by Global Industry Analysts, Inc. (GIA)
projects that the global artificial sweetener market will reach
$1.7 billion by 2018 due in part to attention on weight loss and
diet, development of foods for diabetics, increasing concern about
dental care and volatility of sugar prices. With a history of
stevia related revenue and a leading distribution partner in WILD
Flavors, SUWN may be of interest to those looking for a medium
through which to take a view on the prospects for the global stevia
market.
Patrick Murphy Bio:
Patrick J. Murphy is the owner of Murphy Analytics LLC, a
provider of sponsored research coverage on smallcap stocks. Mr.
Murphy has nearly 20 years of capital markets experience providing
institutional investment and transaction analysis across a range of
asset classes including microcap equities, commercial real estate
debt and equity, municipal derivatives and public finance, venture
capital, fixed income, CMBS and mortgage REITs. In addition to his
work with Murphy Analytics, Mr. Murphy also serves as a consultant
to a municipal derivatives advisory firm. Mr. Murphy is an alumnus
of the University of Notre Dame (1991), with an undergraduate
degree in Economics, and earned a Masters Degree in Finance from
St. Louis University in 1997. Mr. Murphy is a CFA Charterholder and
a member of the CFA Society of St. Louis.
Patrick Murphy Disclaimer:
Readers are advised that the above article is solely for
information purposes and should not to be construed as an offer to
sell or the solicitation of an offer to buy any security. The views
expressed herein are based upon the author's analysis of the
issuer's public disclosures, and assumes both their accuracy and
completeness. The opinions and statements included herein are based
on sources (including the companies discussed and public sources)
believed to be reliable and in good faith, but no representation or
warranty, express or implied, is made as to their accuracy,
completeness or correctness. The author has not independently
verified the information contained herein. This information is not
intended to be used as the sole basis of any investment decisions,
nor should it be construed as advice designed to meet the
investment needs of any particular investor. You should review a
complete information package on all companies, which should
include, but not be limited to, the Company's annual report,
quarterly reports, press releases and all regulatory filings. The
foregoing discussion contains statements which are based on current
expectations, estimates and projections, and differences from such
expectations, estimates and projections can be expected. The
author, Patrick Murphy, was compensated $500 by InvestorIdeas.com
for writing this article. Murphy does not own shares of any of the
companies mentioned in this article. Mr. Murphy's research firm,
Murphy Analytics, may be engaged for the provision of a research
report on the Company in the future.
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Sources:
(i) http://www.wildflavors.com/
(ii) www.dominosugar.com
(iii)
http://www.ota.com/pics/documents/2011OrganicIndustrySurvey.pdf
(iv)
http://www.organicnewsroom.com/2011/11/seventyeight_percent_of_us_fam.html
(v)
http://www.diabetes.org/diabetes-basics/diabetes-statistics/?loc=DropDownDB-stats
(vi) http://www.cdc.gov/obesity/data/facts.html
(vii) http://www.ncbi.nlm.nih.gov/pubmed/17893688
(viii) http://www.ncbi.nlm.nih.gov/pubmedhealth/PMH0004546/
(ix)
http://finance.yahoo.com/news/stevia-corp-provides-revenue-guidance-130000754.html
(x)
http://www.prweb.com/releases/artificial_sweeteners/sucralose_aspartame/prweb10121807.htm
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Contact Sunwin: Dore Perler U.S. Representative 954-232-5363
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