Anyone taking another shot at NAKD?

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At this point it's unclear if Naked will effectively cease to exist or will continue making lingerie, but it will cease operating under its own name, taking Cenntro public in the process, almost as if it were a special purpose acquisition company (SPAC). Here's what it could mean for investors, with the move potentially bullish if Cenntro can live up to its growth goals.

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Naked appears to finally have a firm commitment to a merger in its current pact with Cenntro Automotive. According to the details of the deal, Naked will buy out Cenntro using a stock-for-stock transaction before the end of 2021. The resulting merged company will have the name Cenntro Automotive Group, and current Cenntro shareholders will own a 70% stake in the combined entity, giving them a controlling interest above the 30% held by current Naked shareholders. Naked's acquisition of Cenntro is clearly extinguishing Naked as a swimsuit and lingerie company, meaning Naked is acting in a manner very similar to a SPAC and launching an effective initial public offering (IPO) for Cenntro through the merger. Naked is bringing $282 million in cash to the deal, after already providing Cenntro with a $30 million loan to help it ramp up its EV production. Naked will spin off FOH Online, the e-commerce branch of Frederick's of Hollywood that it acquired back in 2018 for $18.2 million, as part of the merger process. Curiously, the new Cenntro will continue trading under the NAKD ticker on the Nasdaq exchange

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Cenntro isn't a household name, but that's because it produces EVs for commercial and municipal use, rather than passenger cars, which typically attract the most media attention. Unlike many smaller EV companies with vehicles that haven't moved beyond the drawing board or hand-built prototype stage, Cenntro is actually manufacturing EVs and selling them to clients in 26 countries. According to information on its website, Cenntro has delivered more than 3,300 electric commercial vehicles to date, which have collectively traveled in excess of 20 million miles. The company expects the following sales and revenue figures for the current year and upcoming years:

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In 2021, 1,500 vehicles delivered, $25.3 million in revenue. In 2022, 21,500 vehicles delivered, $506 million in revenue. In 2023, 74,800 vehicles delivered, $2.1 billion in revenue. These are ambitious targets, with an almost 50-fold increase in deliveries expected within two years. But Cenntro has the advantage of its positioning in a sector of the EV market where skyrocketing demand is expected. A December 2020 market research report by MarketsandMarkets projects a compound annual growth rate (CAGR) of 41.1% for electric commercial vehicles worldwide through 2028. The report notes that the segment generating the highest demand and growth is electric vans, Cenntro's specialty. If this and similar reports are accurate, the company is operating in a specific market with an even higher CAGR over the coming decade than the EV market overall -- where, with passenger-vehicle growth rates figured in, a 26.6% CAGR is anticipated through 2031, according to analysis firm Transparency Market Research or TMR.

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