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I’ve seen quite a few interest in $MWK. So thought I’ll do a mini dive on why I think it is a good opportunity.
Before I start I’ll like to make it clear I’ve set very clear boundaries in my investment in $MWK. This thread is to highlight why.
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Before I start I’ll like to make it clear I’ve set very clear boundaries in my investment in $MWK. This thread is to highlight why.
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$MWK is a disruptor in e CPG industry.
Consumer packaged goods (CPG) are items used daily by consumers that require routine replacement or replenishment, such as F&B, clothes, tobacco, makeup, & household products.
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Consumer packaged goods (CPG) are items used daily by consumers that require routine replacement or replenishment, such as F&B, clothes, tobacco, makeup, & household products.
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The traditional CPG industry is a brick & mortar one, from manufacturing to distribution and sales. Everyone knows CPGs companies have joined e-comm platforms like $AMZN & bypassing middleman. So what’s the prob?
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Getting onto your $SE $SHOP $AMZN is one thing. How do you optimise your sales and also link your production to future sales?
How $MWK disrupts is this. By being a tech enabled CPG.
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How $MWK disrupts is this. By being a tech enabled CPG.
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$MWK was founded on the premise that if a CPG company was founded today, it would apply A.I. and synthesize massive quantities of data & use of social proof to validate high caliber product offerings.
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$MWK’s flagship tech is AIMEE which sources data from various e-com platforms to determine trends, performance & consumer sentiment on products & searches. It then determine which products to mkt, manufacture through contract manufacturers, import & sell on e-com.
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Here’s a chart illustrating the edge of the $MWK biz model
$MWK’s strength
Visionary, Founder-Led Management Team.
Highly Scalable AI Proprietary Tech Platform.
Faster, Data-Driven, Automated Product Development Cycles.
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Visionary, Founder-Led Management Team.
Highly Scalable AI Proprietary Tech Platform.
Faster, Data-Driven, Automated Product Development Cycles.
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These strengths enable growth via:
1.Own organic operated brands & manufacturers outperformance
2.M&A with other brands that fit $MWK model
3.SAAS revenue for partners using AIMEE
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1.Own organic operated brands & manufacturers outperformance
2.M&A with other brands that fit $MWK model
3.SAAS revenue for partners using AIMEE
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What is $MWK’s moat?
Very simple – if traditional CPGs are experts in a particular product, $MWK breaks that boundary. $MWK can literally grow horizontally & vertically. Economies of scale & scope both apply to $MWK.
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Very simple – if traditional CPGs are experts in a particular product, $MWK breaks that boundary. $MWK can literally grow horizontally & vertically. Economies of scale & scope both apply to $MWK.
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Is $MWK’s moat intact? Yes so far, just check the reviews out for some of its CPG products
Xtava
https://www.influenster.com/brand/xtava
Vremi
https://reviewmeta.com/brand/vremi
Home
https://topgreatpro.com/beverage-refrigerators/
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Xtava
https://www.influenster.com/brand/xtava
Vremi
https://reviewmeta.com/brand/vremi
Home
https://topgreatpro.com/beverage-refrigerators/
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What about $MWK’s risk? There are actually many:
$MWK had a poor start. They’ve had going concern issues flagged by independent registered public accounting firm
They’ve previously identified a material weakness in internal control over financial reporting.
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$MWK had a poor start. They’ve had going concern issues flagged by independent registered public accounting firm
They’ve previously identified a material weakness in internal control over financial reporting.
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Over-reliance on $AMZN platform
Rely on data provided by third parties, the loss of which could limit the functionality of our platforms
Potential for unfavorable customer complaints, negative publicity due to fickle industry
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Rely on data provided by third parties, the loss of which could limit the functionality of our platforms
Potential for unfavorable customer complaints, negative publicity due to fickle industry
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Business, including costs and supply chain, is subject to risks associated with sourcing, manufacturing, importing and warehousing
Risks associated with the suppliers from whom our products are sourced
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Risks associated with the suppliers from whom our products are sourced
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Dependent on third-party manufacturers, including Midea, which are located in China, and any inability to obtain products from Midea or any such manufacturers could have a material adverse effect
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***Inventory issues can adversely affect results – This is an issue flagged in earnings call and are expected to resolve by next year
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So how is $MWK managing these risks? So far very well, apart from inventory shortfalls none of the other risks have kicked it. Early going concern issues are slowly dissipating.
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What about competition?
This is really credible for $MWK. It is really easy for $AMZN $SHOP $SE $MELI to get into this space. They have the data & ability. For example $AMZN private label is a competitor.
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This is really credible for $MWK. It is really easy for $AMZN $SHOP $SE $MELI to get into this space. They have the data & ability. For example $AMZN private label is a competitor.
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These financial metrics are the benchmark from this Q. They are very good BTW.
Qtr Rev $59M
Qtr Gross Margin 48% (very good for a CPG!)
R&D & Mkt spend ↑
Qtr OM 3.3% (before R&D)
Qtr OM 36 % before (R&D + Sales & Mkt)
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Qtr Rev $59M
Qtr Gross Margin 48% (very good for a CPG!)
R&D & Mkt spend ↑
Qtr OM 3.3% (before R&D)
Qtr OM 36 % before (R&D + Sales & Mkt)
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Thus, going back to my 1st thread, $MWK is a worthy investment only you are sensitive to its progress. If financial performance continues to be stellar – stay vested. Any signs of erosion – reduce or get out.
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