RE: Paul hill seems positive13 Jan 2023 14:12
for info - This is what Paul wrote on Linked in about the company. Make of it what you will :
"To me when investing in healthcare, its crucial to opt for the best technology. Why?
Well typically most government & private reimbursement systems want the most effective products, provided the economics are justified. Meaning ultimately, these tend to become ‘winner takes all’ markets.
One innovative firm that fits the bill is Belluscura . A developer of Portable Oxygen Concentrators (POCs) that are transforming the treatment of COPD & other chronic respiratory conditions (see chart).
Here in 2022, #BELL sold 1,226 units (Dowgate est 2,000) of its FDA approved medical device (X-PLOR) via a range of US online, physical store & DTC channels. Providing marvellous real-life endorsements of the science.
Moreover in December, the company signed its first non US deal with MedHealth Supplies of South Africa, who have already ordered >1,000 units. Another major milestone towards fully commercialising its patented POCs across Asia, Europe & Africa – which would hypothetically more than double #BELL’s TAM within the $1.6bn global sector (+14% pa).
In fact, almost 100m people in China alone have COPD (400% higher than the US), on top of another 50m in India and 5m people in Japan.
Wrt the numbers, the shares appear to be materially undervalued too - trading at 44p (Mrkcap £54m) vs Dowgate’s 150p/share target price. Alongside sporting $1.8m of net cash as at Dec'22 vs $11.3m in June, following H2 inventory build & cashburn.
That said going forward as supply chains ease, I’d expect some of the $10.1m stock position to unwind. Plus Dowgate Capital Limited predict unit sales of 12,000 & 30,000 respectively over the next 2 years – with #BELL becoming cashflow positive in 2024, & closing Dec’23 with net debt of $7.5m. They also estimate FY22 adjusted LBITDA came in at -$6.2m, coupled with a strong opening orderbook.
Based on these projections & in the absence of any M&A, then I suspect the Board (albeit total guess-work) may seek some traditional invoice discounting, trade finance &/or top up working capital facility at some point. Reflecting the future growth trajectory & H1 launch of its next generation DISCOVR-R model. Which weighs 40% less than any comparable dual flow POC, & produces nearly 3 times the oxygen by weight than its competition.
But that’s not all.
Elsewhere, once its new Chinese contract manufacturer (re Innomax) comes on stream in Q1’23, then this should double production capacity (536 units assembled in Dec’22). Whilst equally creating opportunities to sell its POCs to the possibly 100ks of sick Covid patients, who urgently require oxygen support as the local economy reopens.
CEO Bob Rauker adding: “During the year we have enhanced our production, quality & supply chain, as we expand our distribution & geographical reach. We are very excited about the upcoming launch of the DISCOV-R, which we believe will be a tr
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