MicroSalt is poised for a rally, with shares trading near key support levels following a recent pullback sparked by confusion surrounding announcements regarding related-party payments to their founding company, Tekcapital.
The sell-off appears to be an overreaction to confirmatory announcements that have no bearing on the long-term growth story.
Shares in the low-sodium salt technology company are now down over 30% year-to-date on little more than what appears to be a minor transgression regarding the disclosure of repayments relating to convertible notes that provided MicroSalt with growth capital in the early stage of its growth story.
Looking beyond the recent announcements, MicroSalt is set for a record year of revenues driven by the adoption of its technology by some of the world’s largest snack food companies.
MicroSalt’s investment case is underpinned by a global trend to reduce sodium in food products to help combat cardiovascular diseases exacerbated by the overconsumption of salt.
We do not know the names of the food giants choosing to lower sodium in their foods using MicroSalt due to commercial sensitivities, but we do know they are ramping up their orders.
MicroSalt issued an update earlier this year revealing orders for their bulk product in Q1 totalled 142% of total revenue for 2024.
Orders totalled 98mt in Q1, roughly enough salt to manufacture 280,000,000 packets of ready salted crisps (assuming 0.35g sodium per pack), or 13,000,000 loaves of bread.
These are serious orders from firms that have invested considerable time in testing before deploying MicroSalt in their products at scale – whether these nameless products are crisps, bread, or even breakfast cereals.
Given the sheer size of the orders, MicroSalt had the confidence to issue revenue guidance of at least $2,500,000 for the full year.
This is before accounting for any contribution from a news product designed for French fries, which is due to launch in the second half of the year.
From a technical analysis perspective, MicroSalt has bounced off the 50p level – a region it has previously found support.