The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
Utterly bemused by the share price towards the end of last week. There is approximately 1.2p of net cash per share to come shortly. HMS is likely to generate anything between $4-8m net to KZG per annum with Tantalum 2.5% Royalty. Major new investor (with serious historical credentials in this sector) taking a shy 30% stake in the company. This defies belief why the stock isn't trading at a significant premium to this level. I can only try to understand that some investors, having seen the stock suspended for several months, are just relieved to see them requoted and are using the opportunity to sell. Very foolish in my opinion as once the dust has settled and reality resumes the stock will be double current levels.
http://www.alignresearch.co.uk/metalnrg/metalnrg-back-to-work-full-time-on-the-corporate-strategy/
Summary
Following Yourgene's heavily discounted 0.3p per share fundraise (-84% to prior close)
for gross proceeds of £7.3m (£6.8m net), we reduce our target price to 1.2p from 9p, but
with the stock trading around 0.4p, we maintain a Buy rating. The fresh funds will be used
to support working capital needs, SVB debt repayments and cost base restructuring to
remove £2.0m of annual opex. Yourgene is also pursuing further funding options such
as divesting its Taiwanese subsidiary and a potential strategic investment from a major
diagnostics company. The company also recently announced 1H FY23 results which were
broadly in-line with expectations, but FY23 guidance was lowered, with full year revenues
now estimated at £18-20m (vs £22m previously) and an EBITDA loss of £3.5-4.5m
(vs £1.5m loss previously). We have updated our forecasts accordingly, with changes
summarised overleaf. Our new target price puts the business on 2x EV/sales, a discount
to diagnostic peers at 2.6x, in recognition of ongoing near-term funding concerns. The
current share price implies just 0.5x EV/sales, which we believe is too conservative.
Key Points
Encouraging core growth in 1H results. Core revenues (ex. Covid sales) increased
14% in 1H FY23 to £7.9m, with NIPT revenues up 15% to £4.0m, as post-Covid demand
for NIPT services in its UK and Taiwan labs returned to deliver 44% revenue growth
to £1.25m. NIPT product revenues increased 6% to £2.7m. Adoption of the Ranger
Technology (the 'Ranger inside' concept for NIPT) is also increasing with a $2.0m annual
run-rate achieved in 1H. Yourgene now expects to pay the $2m cash consideration to
Coastal Genomics for achieving $4m cumulative sales at Yourgene Health Canada by 1
March 2023, with $0.7m payable in April 2023 and $1.3m in April 2024. Inclusive of Covid
sales, group revenues in 1H FY23 declined 45% to £9.6m, with just £1.6m Covid revenues
vs £10.5m in 1H FY22. For FY23 we have lowered our NIPT sales forecast by 9% to
£8.3m, but this still represents 23% YoY growth in 2H. We reduce other products/services
more significantly by 39% to £4.3m, with broadly flat 1H and 2H revenues, instead of the
previously expected step up in 2H on new research contract wins. Reproductive Health
(£4.0m) and Covid (£1.8m) sales are largely unchanged. FY23 revenues are therefore
reduced to £18.4m from £22m previously, in-line with reduced guidance of £18-20m. We
estimate core FY revenues of £16.6m, or 16% annual growth, with 2H core revenues set
for 18% growth. The £16.6m core revenues will match Yourgene's pre-Covid revenues in
FY20. For FY24 and FY25, Yourgene is expecting c.20% core revenue growth, and our
numbers estimate 20% and 18.5% annual growth, respectively
BUY
TARGET PRICE CHANGE Overly discounted
Price (13 January 2023) 0.4p
Changes
Rating
Target Price
Previous
-
9.0p
Current
BUY
1.2p
Key data
Bloomberg/Reuters codes: YGEN LN / YGEN.L
Market cap (£m) £12.4
AIM 865
1mth perf (%) (79.5)
3mth perf (%) (91.8)
12mth perf (%) (96.8)
12mth high-low (p) 13 - 0
Free float (%) 76
Key financials
Year to Mar 2022A 2023E 2024E
Sales (£m) 37.6 18.4 20.0
Sales growth (%) 105.4 (51.1) 8.9
EBIT adj (1.5) (8.9) (5.6)
EBIT margin (%) (6.8) (58.4) (30.5)
EPS adj (p) 0.15 (0.64) (0.15)
DPS (p) 0.0 0.0 0.0
EV/EBITDA (x) 2.7 (2.6) (14.4)
PE adj (x) 2.6 NA NA
Number of shares (m) 724.2 1,323.0 3,227.9
Price as of close on 13 January 2023
All sources unless otherwise stated: Company
data, FactSet, Stifel estimates
Share price performance (indexed)
120
100
80
60
40
20
0 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23
Absolute Rel.AIM (AXX)
Summary
Following Yourgene's heavily discounted 0.3p per share fundraise (-84% to prior close)
for gross proceeds of £7.3m (£6.8m net), we reduce our target price to 1.2p from 9p, but
with the stock trading around 0.4p, we maintain a Buy rating. The fresh funds will be used
to support working capital needs, SVB debt repayments and cost base restructuring to
remove £2.0m of annual opex. Yourgene is also pursuing further funding options such
as divesting its Taiwanese subsidiary and a potential strategic investment from a major
diagnostics company. The company also recently announced 1H FY23 results which were
broadly in-line with expectations, but FY23 guidance was lowered, with full year revenues
now estimated at £18-20m (vs £22m previously) and an EBITDA loss of £3.5-4.5m
(vs £1.5m loss previously). We have updated our forecasts accordingly, with changes
summarised overleaf. Our new target price puts the business on 2x EV/sales, a discount
to diagnostic peers at 2.6x, in recognition of ongoing near-term funding concerns. The
current share price implies just 0.5x EV/sales, which we believe is too conservative.
Key Points
Encouraging core growth in 1H results. Core revenues (ex. Covid sales) increased
14% in 1H FY23 to £7.9m, with NIPT revenues up 15% to £4.0m, as post-Covid demand
for NIPT services in its UK and Taiwan labs returned to deliver 44% revenue growth
to £1.25m. NIPT product revenues increased 6% to £2.7m. Adoption of the Ranger
Technology (the 'Ranger inside' concept for NIPT) is also increasing with a $2.0m annual
run-rate achieved in 1H. Yourgene now expects to pay the $2m cash consideration to
Coastal Genomics for achieving $4m cumulative sales at Yourgene Health Canada by 1
March 2023, with $0.7m payable in April 2023 and $1.3m in April 2024. Inclusive of Covid
sales, group revenues in 1H FY23 declined 45% to £9.6m, with just £1.6m Covid revenues
vs £10.5m in 1H FY22. For FY23 we have lowered our NIPT sales forecast by 9% to
£8.3m, but this still represents 23% YoY growth in 2H. We reduce other products/serv
Research
13 January 2023
Company Update
Buy
Yourgene Health (YGEN LN)
Follow to open report
Life Sciences | Corporate Client
Mkt cap:
£11.4m
|
CP:
0.4p
| TP: 1p
Capital raise completed – Opportunity knocks
Yourgene has raised £7.3m via a heavily discounted capital raise to support working capital and facilitate further cost saving measures. Additional sources of capital are being actively pursued, which would further strengthen the balance sheet. With the balance sheet position improving and growth in the core business returning, the cost base is being rightsized to deliver profitable growth. The pipeline of opportunities remains strong, with the principal challenge remaining converting these in a timely manner. We revise our forecasts prudently to the lower end of managements guidance, which we hope will provide scope for outperformance in due course. Our new TP is 1p, which represents material upside from the current share price.
http://www.alignresearch.co.uk/align-research/align-research-top-conviction-calls-for-2023/
http://www.alignresearch.co.uk/align-research/align-research-top-conviction-calls-for-2023/
In case you needed clarification......
http://www.alignresearch.co.uk/kazera-global/kazera-global-sale-of-tantalum-and-titanium-project-in-namibia-to-hebei-xinjian-construction-for-approx-1-2p-per-share-in-cash-sets-a-new-floor/
Fill ya boots for a nice Xmas present!
http://www.alignresearch.co.uk/corcel/corcel-market-begins-to-reacts-to-transformation-of-business-strategy/
https://www.*************.com/views/65148/bluebird-merchant-ventures-shares-to-double-by-christmas
Just in case you want a full breakdown of shareholders......
https://kazeraglobal.com/investor-relations/share-information/
https://youtu.be/Tb3aukLijCc
You have to listen to this and if you believe, which I do, these things are 4p!
Have a look at the update below....as I headlined above I genuinely believe the market has missed a trick here. The Lithium SPV alone is worth £6.7m net to Kazera excluding the other HMS and Tantalum Sales. They also will be fully funded as a result, unlike most of the smaller company arena, so I can only see huge upside here.
http://www.alignresearch.co.uk/cpt-company/kazera-global/
Another pathetic attempt to rally the share price without any substance. This board is bent!
Perhaps shareholders should have backed Align Research when they had the chance to vote out those those two crooked directors. The whole placing at that ridiculous level was tantamount to fraud to benefit those said underachieving individuals. Just wrong on every level.
This is well worth a listen!
http://www.alignresearch.co.uk/eco-atlantic-oil-gas/dr-michael-green-interviews-gil-holzman-ceo-of-eco-atlantic-oil-gas-2/