There are some fundamentally strong stocks in the ASX, whose current price is low but have good business model and financial basics. Such penny stocks have a fair chance of giving good returns over time.
Two such stocks are :-
SciDev Limited (ASX: SDV)
In FY24, SciDev made notable progress across its divisions. The Water Technologies division developed FluorofIX™ pilot plants in Europe and North America and secured a $4.7 million two-year extension for PFAS treatment with a major Australian mining client. Additionally, the company won a $2 million Build, Own & Operate (BOO) contract with Ventia for a temporary water treatment plant in Victoria and received a $9.35 million contract from a Tier 1 construction company to design and construct three water treatment plants for a new tunnel project in NSW.
In Chemical Services, SciDev supported eight completion fleets across four North American oil and gas basins, saw a 51.5% increase in CatChek™ sales, and secured a two-year contract with Thunderbird Minerals Sands Project, expected to generate around $7.0 million in sales. The company expanded its international footprint with MaxiFlox® chemistry sales through resellers in Turkey and Mexico and established a joint venture in Singapore with Nuoer Group.
In FY24, SciDev achieved a record revenue of $109.2 million, a 22% increase from the previous year, driven by 88% growth in Water Technologies and 11% growth in chemistry sales. The company reported an underlying EBITDA of $8.8 million and a net profit after tax of $2.1 million, up from $4.1 million and $0.3 million in FY23, respectively. The company also invested $1.3 million in acquiring Haldon Industries, reflecting its continued expansion and strong financial position.
SciDev is poised for significant growth in FY25, driven by its expanding portfolio of new contracts and strong market demand. The company's strategic initiatives include leveraging a $10 million finance facility secured with Westpac to enhance its balance sheet and flexibility. SciDev plans to capitalize on new USA EPA PFAS regulations by advancing its North American PFAS pipeline, while aiming to boost its presence in the Global Mining Sector through direct sales, local licensing, and partnerships, particularly with Nuoer Chemicals. Additionally, the company is set to diversify its Oil & Gas client base, with increasing acceptance of its CatChek and XSlik products. Overall, with its strategic focus and market positioning, SciDev is well-equipped to drive operational and financial expansion.
Orthocell Limited (ASX: OCC)
Orthocell Limited is gaining momentum in the global medical device market, particularly with its leading products, Striate+ and Remplir. Striate+, which focuses on dental bone and tissue regeneration, has been bolstered by a global license and manufacturing agreement with BioHorizons, a major player in the dental industry. This partnership, which includes AU$21.5 million in upfront cash and an exclusive licensing deal, validates Striate+ and the CelGro Platform, opening doors to the Largest Healthcare Markets and significantly reducing execution risk.
Striate+ is performing well in major markets including the US, EU, UK, and Australia, and has recently expanded into Canada, a market valued at AU$60 million. Meanwhile, Remplir, a nerve repair product, is showing impressive clinical outcomes and generating revenue in Australia and New Zealand.
Orthocell’s FY24 revenue was $6.76 million, highlighting a 30.76% increase from FY23’s $5.17 million, driven by strong sales in its core products. The company’s revenue breakdown shows that Striate+ Dental, its dental membrane for tissue repair, was the largest contributor with $3.41 million, followed by Remplir Nerve at $1.04 million. SmrtGraft Tendon added $1 million, and cell therapies contributed $0.8 million.
Orthocell has seen remarkable growth, with a compound annual growth rate (CAGR) of 93% over the past three years, increasing from around $2 million in FY2022 to $6.76 million in FY2024. The company remains debt-free, with a robust cash position of $20.6 million, allowing it to fund upcoming milestones, including the planned US market entry for Remplir.
The company is well-capitalized to pursue its strategic goals, with strong product demand and increasing market potential. Orthocell Limited is advancing its product portfolio with key milestones and a promising emerging pipeline. The company is collaborating with a US adviser to secure a partner for accelerating the commercialization of its tendon cell therapy. Its product pipeline includes a ligament replacement device, which has successfully completed pilot studies and is progressing through pre-clinical and clinical stages, targeting a market with over 200,000 procedures annually. Additionally, the tendon cell therapy for rotator cuff injuries has shown significantly greater efficacy than steroid injections in randomized controlled trials (RCTs), and Orthocell is developing a US partnering strategy, with the potential for over 1,000,000 procedures per year. For lateral epicondylitis, the RCTs indicate that the therapy is as effective as, and possibly superior to, surgical options.
Orthocell Limited is emerging as a key player in the medical device industry, with its innovative products, Striate+ and Remplir, driving revenue growth. These products have strong potential, especially with upcoming regulatory approvals that could open up larger markets.
Source: Company’s Report
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.