How did ASX listed Biotech player Zoono’s Share Price skyrocketed in 2020?

An ASX listed New Zealand-based biotech company Zoono Group Limited shares have climbed over 22x in the previous three months. The company has hit it out of the park in the last three months and more precisely after the Coronavirus outbreak.

Amidst the growing concerns of the viral infection (COVID-19), companies involved in the production of antimicrobial products, as well as diagnostic devices have been favourably impacted by COVID-19 as the whole planet battles to shield against it.

On 11 March 2020, WHO declared the rapidly spreading coronavirus outbreak a pandemic, straddling over 112 countries and regions, and appealed all nations to step up their attempts to slowdown the spread of COVID-19.

However, with the speedy spread of the virus across the world, there was a sudden rise in demand for hand sanitisers and surgical masks as protective measures against the deadly coronavirus. The increasing demand of hand sanitisers could be considered as a major reason behind the Zoono shares to have soared up in the past few months.

Also Read: Coronavirus Blackswan Turns 3 Healthcare Stocks to Multibaggers

Let us zoom lens for ZNO-

Zoono Group Limited (ASX:ZNO)

Stock Performance

On 13 March 2020, stock of ZNO closed the trading at $1.435, down by 5.281%, with a market capitalisation of nearly $247.42 million. ZNO has approximately 163.31 million shares outstanding, and its fifty-two-weeks high and low price was spotted at $2.440 and $0.063, respectively.

The stock has delivered a positive return of 121.17% on a year to date basis, 1975.34% in last six months and 359.09% in the previous three months.

About the Company

New Zealand headquartered ASX listed biotech company Zoono Group Limited is mainly into the development and distribution of antimicrobial formulations that are suitable for disinfecting surface, skincare and mould remediation treatments.

The verified antimicrobials of ZNO comprises of surface and hand sanitisers that have demonstrated inhibition of coronavirus; these products are based on distinctive antimicrobial molecule recognised as the ‘Zoono molecule’. This molecule binds to the surface and destroys pathogens like bacteria, viruses, algae, mould etc.

What factors drove the rise in ZNO’s stock price?

On 28 February 2020, Zoono revealed that the Company successfully tested its Z-71 Microbe shield against Coronavirus COVID-19.

The results show that Zoono’s Z-71 Microbe Shield is more than 99.99% effective against the coronavirus that knocked everybody’s socks off and share price of the Company surprisingly increased. Similar technology used in Zoono hand sanitiser, has also been used in Z-71 Microbe Shield.

Agreement with Eagle Health Holdings-

Zoono signed a distribution deal with Eagle Health Holdings Ltd (ASX:EHH), a China-based company, to sell its products in China.

As per this distribution agreement, Eagle Health will arrange for the import of formulations of ZNO to its wholly-owned GMP certified pharmaceutical premises in Xiamen China.

The critical terms of this agreement are:

• It is initially for a three-year term with 5-year rights of renewal, for selling of Eagle co-branded products and in offline retail in China;
• A minimum purchase volume in the first one year is of nearly NZ $1,500,000, in two years is NZ $2,300,000 and in three years is of NZ $3,100,000, subsequently rising by 10% per annum;
• The Company mentioned that the initial order of Zoono product is nearly NZ $400,000;
• Eagle Health can sell Zoono’s branded formulations as a preferred collaborator subject to good faith negotiations after 1 year in additional networks.

Half year financial performance-

On 19 February 2020, the Company provided its half-yearly financial performance (ended 31 December 2019) and an update related to its performance are as follows-

• In the six months to 31 December 2019, the Group increased its operating revenue to approximately NZD 1,012,408;
• Gross Profit achieved was 52.1% of operating revenue and about NZD 893,443;
• The Group ended the half-year with NZD 2,706,792 in cash reserves;
• Zoono mentioned that the Company remains in a strong cash position, particularly with the materially increased requirement for its products experienced in the current half year period.
• The Company disclosed that online sales continue to improve in Australia and New Zealand. Moreover, Zoono is also experiencing growth month on month with online sales in the United Kingdom.

With the global impact of the coronavirus epidemic, which has now been declared a pandemic by WHO, the increasing demand of antimicrobials, the main challenge Zoono has been facing this year is how to cope with the influx of orders.

Zoono is undertaking following initiatives as the demand of its product increases-

• In early March 2020, the Company shall relocate to a substantially larger (3 times) warehouse and office premises;
• Zoono is ordering four million bottles to meet the demand;
• Increased raw material supplies to make three million litres of products;
• Moreover, the Company is employing more staff to cope with the increased demand for products.

In a nutshell, sales of products of the Company have been touching the sky this year and Zoono has emerged as an unexpected leader in fighting against the spread of the deadly coronavirus.

To Know More Do Read: ZNO’s share price movement amidst Coronavirus Fears- Rose up by 818.37% in last 3 Months