Kiwa Bio-Tech Products Group Corporation (OTCMKTS: KWBT) is making an explosive move up the charts since a brief dip below the $0.01 mark. The stock has emerged in recent months as a volume leader in small caps regularly trading several million $USD in daily dollar volume and quickly attracting legions of shareholders.
It’s easy to get excited about KWBT; the Company operates in the booming multi-billion China agriculture and aquaculture markets and is a revenue powerhouse recently reporting $40.1 million in revenues in fiscal 2019 up 31% from the year before. While aggressive convertible debt sellers have hammered the stock price, the underlying Company has been aggressively expanding production and recently signed a agreement with Huaxialitai Co., Ltd for initial order Q2 2020 of $7.5 million USD.
Kiwa Bio-Tech Products Group Corporation (OTCMKTS: KWBT) is an emerging agricultural company that develops, manufactures and distributes innovative and environmentally safe bio-technological products for agriculture and aquaculture markets with corporate headquarters in the Yangling, Shaanxi, China. Kiwa’s focus is to positively impact the environment by reducing the amount of chemical fertilizers that are being used by agricultural growers in China. Kiwa’s products are covered by patent protection and are designed to enhance the quality of human life by increasing the value and productivity of agricultural crops.
The numbers here are impressive; Total revenue for the fiscal year ended December 31, 2019 increased by $9.4 million, or 31%, to $40.1 million from $30.7 million for the same period of last year. More sales are achieved for most of our four product lines in quantities are due to the good quality of our products and more reputation gained in different regions of the PRC, such as Hainan Province, Guangdong Province and Shaanxi Province upon establishment of our sales channel in different regions. Gross profit increased by $1.1 million, or 13%, to $9.3 million for the fiscal year ended December 31, 2019 from $8.3 million for the same period of last year. Gross margin decreased by 4 percentage points to 23% for the fiscal year ended December 31, 2019, from 27% for the same period of last year, due to higher retail profit margins.
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Kiwa has made a number of big moves recently; In March KWBT signed a cooperation agreement with Huaxialitai Co., Ltd. a China state-owned enterprise that has an enormous fertilizer market channel throughout the Country of China. Under terms of the agreement, Huaxialitai will start to sell Kiwa’s fertilizer products in the second quarter of 2020. The sales area includes Gansu, Jilin and other regions. It is anticipated that the first order will be at least $7,500,000 USD.
In April the Company reached an agreement with Shaanxi Branch of Postal Savings Bank of China, wherby the bank will provide up to a 100 million RMB (approximately $14 million USD) loan to support and boost agriculture economy in China. The Loan program is specially designed by PSBC for Kiwa and issued by Shaanxi Agricultural Credit Financing Guarantee Co., Ltd. for farmers to purchase Kiwa’s fertilizer products and technical services. This marks the first time KWBT has utilized bank lending facilities in nearly 20 years. This credit facility will enhance cash flows and enable the Company to accelerate production and sales. KWBT has also started negotiations with convertible notes holders repayment.
Kiwa recently reported record revenues for fiscal 2019; according to CEO Mr. Wade Li “As all of us experience the challenges and impacts associated with the efforts to mitigate the COVID-19 outbreak, Kiwa eliminated the adverse factors brought by the epidemic and completed 80% of the quarterly sales plan. Currently, the customers in Xinjiang, Hainan, Shandong and Shaanxi have started to use Kiwa fertilizer for spring farming season. After the resumption of our production, Kiwa fertilizer has delivered 24,000 tons of Kiwa bio-organic fertilizer, 8,800 tons of Kiwa compound microbial fertilizer and 800 tons of Kiwa water soluble fertilizer for the first quarter of 2020. Kiwa plans to achieve fertilizer sales of no less than 200,000 tons in 2020, which will increase by nearly 20% compared with our total sales in 2019.”
$KWBT in green fr
— Rippa Da Kid 🇭🇹 (@RippaDaKid_) July 10, 2020
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Currently trading at a $6 million market valuation KWBT is an exciting story developing in small caps; the Company operates in the booming multi-billion China agriculture and aquaculture markets and is a revenue powerhouse recently reporting $40.1 million in revenues in fiscal 2019 up 31% from the year before. While aggressive convertible debt sellers have hammered the stock price, the underlying Company has been aggressively expanding production and recently signed a agreement with Huaxialitai Co., Ltd for initial order Q2 2020 of $7.5 million USD. We will be updating on KWBT when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with KWBT.
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Disclosure: we hold no position in KWBT either long or short and we have not been compensated for this article