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NAKD Stock: Now CENN – What Does the Future Hold for This Stock?

nakd stock technical chart

Let’s take a look at the value of NAKD stock going into 2H of 2022. Note that as of January 14, 2022, NAKD changed its trading symbol to CENN. Why did NAKD stock turn into CENN stock? 

The original NAKD ticker belonged to Naked Brand Group. The company raised capital in 2021 by issuing shares to mainly retail investors. The sum raised, $200 million, and the divestiture of its Bendon Lingerie business converted Naked Brand Group into a virtual SPAC (Special Purpose Acquisition Company).

In late 2021, Naked Brand Group and Cenntro Automotive agreed upon a merger, although it is a de facto acquisition by Naked Brand Group. The sole business of the merged companies is the production of electric vehicles. And I believe it made sense to change the ticker to CENN: NASDAQ to reflect the new name of the combined companies.

CENN Stock or NAKD Stock

Call it what you like, CENN stock or NAKD stock, we are going to have a look at the prospects for this commercial EV maker. We will look at the most recent events covered in the news, the prospects for the EV sector, and finally a technical analysis of NAKD Stock.

Cenntro is a commercial EV maker based in New Jersey. The company currently has a lineup of 6 fully electric vehicles among which are the Logistar 400 and an autonomously driven utility vehicle iChassis. The EV maker has delivered more than 3,600 vehicles that have traveled a total of 20 million miles.

nakd stock logistar 400

The customers are spread across 16 countries and production is decentralized with more than six assembly plants. Cenntro is led by Peter Wang, who is the co-founder of UTStarcom in 1991, at the time one of the largest telecom solution providers in Asia.

NAKD Stock in the News

Charging Stations

On May 9, 2022, Yahoo Finance reported that Cenntro Electric Group and Nuvve Holding Corp (NVVE: NASDAQ) announced an alliance to offer charging stations to shared and non-shared customers. 

Cenntro aims to offer package solutions to fleet customers allowing them to gain the infrastructure needed to charge and discharge their vehicles. 

New Facility

On May 14, 2022, Cenntro announced that it had acquired a production plant with 474,000 square feet. Once the facility becomes fully operational the company will be able to produce up to 50,000 new vehicles annually. 

The company plans to build the new light commercial truck, Metro. The characteristics of the vehicle would make it seem more suitable for Asian markets rather than North American markets. The new facility was built in 2018 and has advanced manufacturing capabilities. The company expects that the new features of the plant will help it achieve ISO 9000 certification.

Sustainability Partnership

Cenntro and Princeton NuEnergy entered a strategic partnership on June 14, 2022, through a letter of intent to recycle lithium-ion batteries. The idea is to create end-to-end sustainability by using NuEnergy’s advanced technology to recycle spent lithium-ion batteries.  

Russell Index Inclusion

More recently, on June 27, 2022, Cenntro announced that the company had been included in the Russel 3000, Russell 2000, and the Russell Microcap indices. Inclusion into the indices also automatically includes the incorporation in one of the style indices, growth, or value.

Membership of the indices is renewed every year and is based on objective data. Most importantly, fund managers that track these indices’ performance can now choose if they wish to add NAKD stock to their portfolios. This factor alone greatly increases the number of potential investors.

NAKD Stock Fundamental Analysis

Cenntro Electric Group has 261.26 million shares outstanding, which at the time of writing gives it a market cap of $428.5 million. Trailing 12 months (TTM) revenue is $8.58 million, and the company has experienced QoQ revenue growth of 65.40%.

Gross profit TTM is $1.5 million, combined with the revenue growth for the last quarter may be signaling future profits for the company if it manages to continue this trend. Something also remarkable is how the company has reduced its debt burden over the past three years.

In 2019, Cenntro had a Total Debt of $19.6 million, by 2020 they had reduced it to $7.2 million, and by 2021 their total debt was $3.5 million. However, EBITDA is still a negative $15.87 million. From the product lineup, we see a wide variety of commercial vehicles. Each of which is aiming at a specific niche market.

The recent introduction of the Cenntro Chassis, for which production will begin in Q1 2023, opens the door to new sectors within the commercial vehicle space and automated driving.  This vehicle can be used for city deliveries, city sanitation, surveillance, and rescue services among other applications.

So, it looks to us like NAKD stock is well placed for future growth if Cenntro can market its products in a winning way. The fact they have opened a large production plant in China also opens a gateway to a very large market while maintaining costs under control.

The recent large injection of capital from the merger with Naked Brand Group has also given Cenntro the financial stability needed while it navigates the stormy waters of a looming recession. While its low debt ratio will prove a positive factor since financing its debt will be cheaper than companies with debt burdens as interest rates rise.

NAKD Stock Sector Prospects

The listing of commercial electric vehicles from Cenntro leads us to believe that they do want to be a global player. They have various designs with dimensions and styles that definitely do not seem like they are aiming for the North American market.

Then the factory in China and the design of their Metro EV especially, showcase this concept. This is an important point since the adoption of electric vehicles is happening at a faster rate in some parts of the world.

Europe for example is highly committed to bringing in legislation that will obligate car manufacturers to produce zero-emission cars and commercial vehicles. Germany introduced a bill in 2016 to ban the sale of fossil fuel cars by 2025.

France followed closely behind and in 2019 and banned the sale of gasoline and diesel cars by 2040. The city of Paris went a step further and will restrict access to all vehicles that are not zero emissions by 2030. The UK has also implemented legislation to ban gasoline and diesel cars by 2040. 

In other countries around Europe, the consensus is to ban cars at some point in the near future. Portugal and Spain have either already passed laws banning gas and diesel cars, or are planning to do so, by 2040.

Around the world, many countries have decided to ban gasoline and diesel cars by 2030, 2035, or 2040. The list includes the following states:

  • Austria by 2040
  • Belgium by 2040
  • Canada by 2035
  • Chile by 2035
  • Denmark by 2030
  • India by 2030
  • Israel by 2030
  • Japan by 2035
  • Netherlands by 2030
  • New Zealand by 2040
  • Norway by 2025
  • Poland by 2040
  • Sweden by 2030
  • Taiwan by 2040
  • Thailand by 2035

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A New Market

As we can see the list is extensive and means that there is a large market about to be created for electric vehicles worldwide. Cenntro doesn’t compete with the behemoths such as GM and Ford. This company is searching for and creating its own niche markets.

It also has a relative starter advantage being one of the first EV makers to concentrate on commercial vehicles. What remains to be seen is whether Cenntro can take advantage of the development in the EV space as we are likely to see more competition coming in as the years pass.

NAKD Stock Technical Analysis 

Looking at the day chart for NAKD stock, we see that the open at the beginning of 2022 was at $5.51 and then it tumbled to levels just above $1 by the end of February. True that the broader stock market also lost territory, but NAKD stock has lost nearly 69% YTD.

NAKD stock day chart

Source: YahooFinance

We also see that the price of this stock has remained within a wide channel between $1.34 and $2.27 since April 2022. This may denote a new long-term sideways trending range. Or it may indicate that the price of NAKD stock has bottomed out and investors are simply waiting for fundamental data to drive a new rally.

nakd stock technical chartSource: YahooFinance

From the chart above we can appreciate how three of the most common technical indicators are all showing that NAKD stock is in a sideways momentum. For you to consider a new rally or bear market is underway you would need to see the price break its most recent high or low. 

On the upside, the price would need to break its most recent high of $3 on March 3, 2022. While to the downside price would have to break below $1.34 from April 28, 2022. So, for the time being, this stock looks like it is set to continue in this range until it manages a breakout.

Bottom Line

The fundamentals of NAKD stock look solid, Cenntro has some quality products and has identified niche markets within the electric vehicle space. However, there is always a high amount of risk when investing in a relatively young company. 

Technically speaking this stock looks like the sideways price range is set to continue. At least until we have news of further improvement in sales or some breakthrough in production costs. Basically, something that can add fuel to a new rally.

If you are thinking of targeting this asset for stock trading you may want to consider that it has a low level of liquidity and that the risk to the upside, short positions, is limitless. We always recommend you speak to your financial advisor before making highly speculative investment decisions and committing your cash.

You may also want to use the services of professional stock pickers. Various companies offer their experience and expertise when it comes to picking stocks. You can check out our reviews of the top stock picking services in 2022 here.