S66 trade ideas
ASX Star Combo Pharma Star Combo Pharma has just started trading last week. It has a good run up to above $2. I believe this is Wave 1 of Elliot. The price has dropped a bit at writing and if I am not wrong, corrective wave 2 will probably hit between 0.5 to 0.618 in the next few days. If i were to trade, i would look for entry below $1.30 between 0.5 to 0.618 fibonacci. At writing, there was a bounce at 0.384 fib @ about $1.40. If my charts are correct, we are looking at corrective wave B of 2 then C down to 0.618 fib. We shall see.
ABOUT THE COMPANY
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extracted from: www.afr.com
A company that acquired the Living Healthy vitamins and health supplements brand from pharmacy chain Terry White Chemmart last year wants to make a big shift from being a contract manufacturer to launching its own brand.
Star Combo Pharma has raised $7 million in an initial public offering at an issue price of 50¢, and will list on the ASX on Wednesday, with chairman Richard Allely outlining ambitious growth plans.
The company signed a three-year distribution deal with Terry White Chemmart as part of the acquisition where the Living Healthy vitamins brand will be on the shelves of 450 of the group's pharmacies.
Mr Allely said Star Combo currently generated about 70 per cent of its revenues through contract manufacturing for other vitamins companies in western Sydney.
About 30 per cent of its revenues come from its own brands, which include Costar, Amax and J&K. Those three brands are largely sold in gift stores and duty free stores.
The Living Healthy brand had undergone a rebadging and repackaging, and Star Combo was aiming to accelerate its growth. Between 20 and 30 individual product lines, known as stock-keeping units, would be on the shelves of Terry White Chemmart outlets around Australia.
Star Combo was also eyeing a big push into China, to try to emulate in a smaller way the success of big players such as Blackmores and Swisse.
At the issue price of 50¢, Star Combo has an indicative market capitalisation of $38 million. Mr Allely said the IPO had been oversubscribed and the company had been forced to scale back applications.
The company made a net profit of $1.48 million in 2016-17 from revenues of $9.84 million. Net profit in 2015-16 was $1.59 million from revenues of $9.4 million.
