what is coming8 Oct 2020 09:51
Posted this last night, but worth doing so again. Been here many times with a rising SP, if the fundamental investment case has not changed, then fluctuation in price should make no difference. Plenty have been robbed of profits by listening to the derampers. Also I think everyone can look back at a share that has rocketed that we sold too early on.
Some think the high SP figures being bandied around (from me included) are plucked from thin air, they are not.
In fact, before Monday I would not have dreamed of thinking about over 300p till about a year from now, but with the investor presentation and the revelation that the ramp-up in weekly test production is 500% more we thought it was going to be and ten times what we thought only a matter of weeks ago, we have gone from 250,000 tests a week to 2-2.5m test per week by Chrismas, that is a huge leap, and we now know that the Antibody test is in production and has a Gov't order.
Bear in mind also that the Gov't has said Antibody testing will form a central part in the vaccination program and we are then looking at up to around 200m test annually, even if ODX is only producing 50m of those it is still a hell of a lot.
Add in the other tests and we can see that everything they produce will be sold, and we haven't even looked at foreign sales.
Then there is around £100m annual revenue from the core business with a significant expansion of that possible.
Given the short timeframes for the ramp-up, the lack of possible significant competition, and the sheer scale of the increase in revenues about to happen a valuation of greater than 300p per share or just over £500 market cap not only seems likely, it is inevitable.
Obviously, a couple of things will help get it there, one being MHRA approval and also details of what is happening with the MOU (intraday tomorrow likely or Friday), it could be further orders or capacity building, we shall see.
Certainly to my mind and likely most invested in this company they will agree the current SP does not yet reflect current known potential OR where it will be in a matter of weeks.
A listen to the investor presentation and a bit of easy research will confirm everything that investors here have been saying.
No need to ramp here, the facts and figures speak for themselves.
100-125m tests produced a year at a few quid each (some will be much more lucrative than the Gov't contract) plus existing revenues should give revenue of over £500m per year, even working out margin and EBITDA and then applying a modest p/e multiple will more likely work at over £4 per share, but a £3 target early next year is reasonable and more than likely.
Aberdeenman
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