Nocera, Inc. (NASDAQ:NCRA) is a leading provider of land-based recirculation aquaculture systems (RAS) for fish farming. The company's innovative solutions are revolutionizing the aquaculture industry, offering a sustainable and controlled environment for fish production. With a strong focus on technological advancements and global expansion, Nocera is well-positioned to capitalize on the growing demand for efficient and environmentally-friendly fish farming solutions.
Business Overview
Nocera, Inc. was incorporated in the State of Nevada in 2002 and is headquartered in New Taipei City, Taiwan. The company's primary business operations consist of the design, development, and production of RAS, large-scale fish tank systems, for fish farms. Nocera also provides expert consulting, technology transfer, and aquaculture project management services to new and existing aquaculture businesses.In October 2020, Nocera ceased its operations in China and moved its technology and back-office operations to Taiwan, aligning with the Taiwanese government's initiative to support the Green Power and Solar Sharing Fish Farms program. This strategic decision has allowed the company to focus on the growing opportunities in the Taiwanese market, as well as explore expansion into other regions, such as the United States and Brazil.
Nocera's current mission is to provide consulting services and solutions in aquaculture projects to reduce water pollution and decrease disease problems in fisheries. The company's goal is to become a global leader in the land-based aquaculture business, leveraging its expertise and innovative technology to drive sustainable growth.
Geographical Breakdown
Nocera's operations are primarily focused in Taiwan, with the company's branch office also procuring and selling eel in the local market. In 2022, the company expanded its presence by acquiring an 80% controlling interest in Meixin Institutional Food Development Co., Ltd., a Taiwan-based food processing and catering company.In addition to its Taiwanese operations, Nocera is actively exploring opportunities to expand its business into the United States and Brazil. The company has recently completed the acquisition of 229 acres of land in Montgomery County, Alabama, where it plans to build RAS facilities for fish farming.
Segment Performance
Nocera's revenue is primarily generated from two main business segments: the sale of RAS equipment and the provision of aquaculture consulting and project management services.The RAS equipment segment, which includes the design, development, and production of large-scale fish tank systems, accounted for approximately 65% of the company's total revenue in the first quarter of 2024. This segment has seen a slight decline in revenue compared to the same period in the previous year, as the company has been focused on expanding its consulting and project management services.
The aquaculture consulting and project management services segment, which includes expert advice and technology transfer to new and existing aquaculture businesses, contributed approximately 35% of Nocera's total revenue in the first quarter of 2024. This segment has experienced growth, as the company has been successful in securing new consulting contracts, particularly in Taiwan and the United States.
Financials
Nocera's financial performance has shown both challenges and promising developments. For the fiscal year ended December 31, 2023, the company reported annual revenue of $23,915,926, a decrease from the previous year's revenue of $25,104,837. The annual net income for the same period was -$4,289,611, compared to -$3,998,765 in the prior year.The company's annual operating cash flow was -$1,061,851, and its annual free cash flow was -$1,919,721. These negative cash flow figures reflect the company's ongoing investments in research and development, as well as its expansion efforts into new markets.
On a quarterly basis, Nocera reported revenue of $4,899,880 for the first quarter of 2024, compared to $3,837,863 in the same period of the previous year. The company's gross profit for the first quarter of 2024 was $83,961, up from $68,656 in the first quarter of 2023. However, Nocera's net loss for the first quarter of 2024 was $493,920, compared to a net loss of $1,002,189 in the same period of the previous year.
Liquidity
As of March 31, 2024, Nocera had a cash balance of $961,777, compared to $1,229,580 as of December 31, 2023. The company's current ratio, a measure of its ability to meet short-term obligations, stood at 0.87, while its quick ratio was 0.83.Nocera has funded its operations through a combination of revenue, loans, and the issuance of equity securities. In August 2022, the company completed a public offering, raising $6.58 million in gross proceeds, which it has used to support its growth initiatives and expand its global footprint.
Looking ahead, Nocera expects to require additional capital to fund the construction of its land-based fish farming demo sites in the U.S., Taiwan, Brazil, Japan, and Thailand, as well as to support its ongoing marketing and operational expenses. The company is actively exploring various financing options, including seeking additional funding from shareholders and raising capital through the sale of equity or debt securities.
Risks and Challenges
Nocera faces several risks and challenges that could impact its future performance. These include:1. Geopolitical Conditions: The company's operations could be disrupted by geopolitical tensions, trade disputes, and international sanctions, particularly in regions where it has a significant presence, such as Taiwan and the United States.
2. Foreign Currency Fluctuations: Nocera's reporting currency is the U.S. dollar, while its operations in Taiwan use the New Taiwan dollar as the functional currency. Fluctuations in exchange rates could adversely affect the company's financial results.
3. COVID-19 Pandemic: The ongoing COVID-19 pandemic has the potential to disrupt Nocera's supply chain, impact customer demand, and hinder its ability to execute on its growth strategies.
4. Competitive Landscape: The aquaculture industry is highly competitive, and Nocera faces competition from both established players and emerging startups offering similar RAS solutions and services.
5. Regulatory Changes: Nocera's business is subject to various regulations and environmental standards, which could change over time and require the company to adapt its operations accordingly.
Outlook
Despite the challenges, Nocera remains optimistic about its future growth prospects. The company is focused on several key strategies to drive its expansion and solidify its position as a leader in the land-based aquaculture industry:1. Expansion into New Markets: Nocera is actively exploring opportunities to expand its presence in the United States and Brazil, leveraging its expertise and innovative technology to capture a larger share of the global aquaculture market.
2. Strengthening Technological Capabilities: The company is continuously investing in research and development to enhance its RAS technology, improve efficiency, and develop new product offerings to meet the evolving needs of its customers.
3. Diversifying Revenue Streams: Nocera is working to diversify its revenue sources by expanding its aquaculture consulting and project management services, as well as exploring opportunities in the food processing and catering industry through its Meixin acquisition.
4. Enhancing Operational Efficiency: The company is implementing measures to improve its operational efficiency, including streamlining its supply chain, optimizing production processes, and enhancing its financial controls and reporting systems.
5. Securing Strategic Partnerships: Nocera is actively seeking to establish strategic partnerships with industry leaders, research institutions, and government agencies to leverage their expertise, resources, and networks to accelerate its growth and innovation.