Cenntro Electric Group’s (NASDAQ:CENN) publicly-traded stock is the result of its acquisition by Naked Brand Group an intimate apparel retailer. Via a reverse merger back in 2021, the troubled retailer switched a completely new direction in its business goals. CENN stock still has a lot to prove.
I have always wondered why uncorrelated businesses merge like this. As in reality, it does not make any sense, at least from a financial perspective. We live in modern times where SPACs, and meme stocks having become surprisingly very popular, so this reverse merger involving CENN stock gives us some food for thought and analysis.
What are some of the key facts now about Cenntro Electric Group? For start, CENN stock is a penny stock trading near $1.39 a share as of Feb. 16, 2022.
Now, do not confuse price with value. CENN stock’s price may seem too cheap, but its value is questionable at least.
Have a look at quarterly results on the official website of Cenntro Electric. Oh wait, there aren’t any!
It is empty and simply says that more reports are coming soon.
Some Background on Cenntro Electric
Having a lack of financials to analyze, Cenntro Electric claims it is “a Leader in Commercial Electric Vehicle Sales and Production.” The numbers speak for themselves as more than 3,600 vehicles have been delivered, in more than 16 countries, more than 238 patents have been granted and there are more than six assembly plants.
The company was founded in 2013 and is headquartered in New Jersey. It manufactures electric light and medium-duty commercial vehicles. It has five models Metro, Logistar 400, Neibor 200, Logistar 200, and ORV an off-road utility task vehicle.
Weird Designs
I am a car lover and place a lot of emphasis on design and I admit the design of these commercial electric vehicles is… weird. Why do I use the word weird?
The design does not follow a common pattern at all. There is a box-shape design for Logistar 200 and Logistar 400 and ORV to me looks like it is unfinished, something is missing, like its doors which make it hard to use during winter.
It seems that Cenntro Electric Group tested has hired various designers for its models. Having uniformity in design even for commercial vehicles is important but sales will either prove me wrong or correct. I find the total design portfolio uninspiring.
Latest CENN Stock News
Should investors get excited about the news that Cenntro Electric achieved a record production milestone of 1,623 Electric Commercial Vehicles in 2021?
Yes and no.
Sales should be analyzed on a deeper level, like margins, growth, profitability. The firm announced it ended FY 2021 with $250 million in cash and no debt. That is positive news but blurry at the same time. The company’s expansion plans for its European Operating Center in Dusseldorf and a new assembly plant in Jacksonville should not be examined in isolation.
The first important audited report for FY 2021 is expected in April 2022. What catalysts will move the stock until then? I do not see any.
Investing in Autonomous Driving
Cenntro Electric is investing and developing its iChassis technology that will allow autonomous driving applications. Some of these applications include autonomous driving for city delivery, city sanitation, and city surveillance.
The production will start in Q1 2023, with Cenntro owning 100% of the intellectual property.
Bottom Line on CENN Stock
Investors should wait for the release of the annual report for FY 2021. Right now, there is a complete lack of financial metrics.
The wisest move is to avoid CENN stock for now. At least until more financial information is publicly available.
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On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.
