Evolva Holding's (SIX:EVE) Q3 trading statement is mixed, but overall we believe it contains more positive than negative news. The announcement that Cargill and DSM are to form a new joint venture to produce fermentation-based stevia under the EverSweet brand is not a threat to Evolva’s position and indeed could potentially accelerate growth of the market that is still in its infancy. We note that revenue guidance is somewhat less bullish than at the H1 results and we therefore trim our forecasts slightly. We also update our forecasts for FX and overall our fair value remains unchanged at CHF0.58
EverSweet expanding
Cargill and DSM’s new JV, Avansya, has been established in order to share technologies and their products will be marketed under the EverSweet brand name, which belongs to Cargill. Evolva’s collaboration with Cargill remains unchanged; therefore, Evolva’s product is effectively being brought into the JV. While the details are not yet clear, we assume that the JV will allow DSM’s steviol glycosides to be scaled up to industrial scale more rapidly, as Avansya will utilise Cargill’s existing Blair, Nebraska plant.
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