Member Info for Joshholdforgold

Apologies if seen before but here is my share price forecast:

Assumptions:

Enterprise Value = 12x gross profit for non-covid related revenue.

Enterprise Value = 6x gross profit for covid related revenue.

Non covid revenue = £3.5m H1 2021
FY2021 Rev = £7m
Gross Profit Margin 40%
GP = £2.7m
Factor x12

EV=£32.4m

Antibody test revenue = £33 x margin x sales
Gross profit margin (est.) 40%
Sales (est.) = 1m/year
GP = £13.2m
Factor x6

EV=£79m

Now my projections for the lateral flow test sales relies on my firm belief that AVCT will in the next few weeks receive Home Ise Authorisation for their best in class test. At this point their manufacturing agreement with ABDX will kick in and we can expect orders of 4m tests per month.

AVCT test revenue = £5 x margin x sales
Gross profit margin (est.) 20%
Sales (est.) = 48m/year
GP = £46m
Factor x6

EV=£276m

Without any provision for sales of Abingdon’s own covid products we reach a the following valuations:

Without AVCT sales:
£111.4m = £1.15 per share

With AVCT sales:
£387.4m = £3.99 per share

Trades 389
Vol. Sold 925,910
Sold Value £627,041.50
Vol. Bought 1,363,082
Bought Value £916,019.88

That would be my wet dream as they are currently my only two holdings!

# Trades 194
Vol. Sold 383,978
Sold Value £244,620.54
Vol. Bought 771,873
Bought Value £498,653.03

Seller seems to have eased off and we are on the move! Let’s see if they kick back in at 70p.

Dealer - Really! So you can’t give the booster too soon, or too late?
Have you got a source for this? I’m not disbelieving you. It would just be nice to understand the science behind that?

In much the same way that the number of self administered LFT sold now far exceeds the number of laboratory PCR tests, home antibody testing will take the lions share of its market.

Antibody testing is now required on a scale like never before.

Vaccines are not preventing transmission to anything like the extent we had hoped and the data coming from Israel (The first country to have offered double jabs to all citizens) shows immunity is dropping fast.

What does this mean? This means that herd immunity is not an option and our only way to defend against COVID-19 is to identify those whose immune responses to the vaccine have weakened and offer a booster jab.

How do we identify those requiring a booster jab? Antibody testing!!

I foresee a scenario where each person is sent two home antibody test kits a month, and should their antibody level drop they book in their booster jab.

Antibody testing to support the vaccine programme will save lives. It is the next weapon in the fight against covid 19.

Good luck holders! We are on to something here.

Sky Monkey - I assure you I’m here to stick around and hope to contribute to those well thought out conversations.

I am recently invested but have followed ABDX closely for their links to AVCT and comparisons with NCYT’s dispute with the DHSC.

And I’m far from a city Spiv as Apre describes me. I live in a village in Cornwall!!

Ape - if you don’t understand the numbers, I’m happy to explain them to you. No need to get your knickers in a twist.

Starbright - You make a good point. Perhaps if I took 40% off for biosure and then assumed ABDX make 40% on the remainder?

So that would mean £7.90 gross profit per unit.

Sorry that’s 6-8m tests not £s (£5each)

They have had a supply agreement with abdx for quite a while but have only just got to the stage of having EUA for their LFT (It’s best in class by miles and cheap to manufacture).
They are currently only approved for research/medical institute applications but are imminently expecting their home use approval.
They expect to sell £6-8m tests a month (which I believe will fly out the door) and ABDX are in line for 3-4m of the orders pcm.

It’s the 50m LFTs we will be providing for AVCT!

Rodgetrades - Industry standard for pharma/biotech/diagnostics on established revenue streams is 20-25x EBITDA.

I have estimated GP to be twice EBITDA as that is the case for NCYT so used a factor of 12 (half an EBITDA factor of 24).

For my special covid factor - well I made that up! It’s a balance between believing that covid testing will be around forever but at a significantly reduced level after say 3 years.

Note: without any real data confirming what fixed costs are incurred in the business it is difficult to calculate EBITDA from GPM. I have reduced factors applied in an attempt to compensate for this.
Ie a factor of 20-25 might be applied to to non covid testing EBITDA.

What is obvious is that the fixed costs will make up a smaller % if the revenue is higher.

Good find! Do we know if works are complete on the second site?

With a Mcap of just under £60m it is worth dissecting the major sources revenue available to get a feel for whether the share price should go up or down.

Assumptions:

Enterprise Value = 12x gross profit for non-covid related revenue.

Enterprise Value = 6x gross profit for covid related revenue.

Non covid revenue = £3.5m H1 2021
FY2021 Rev = £7m
Gross Profit Margin 40%
GP = £2.7m
Factor x12

EV=£32.4m

Antibody test revenue = £33 x margin x sales
Gross profit margin (est.) 40%
Sales (est.) = 1m/year
GP = £13.2m
Factor x6

EV=£79m

Now my projections for the lateral flow test sales relies on my firm belief that AVCT will in the next few weeks receive Home Ise Authorisation for their best in class test. At this point their manufacturing agreement with ABDX will kick in and we can expect orders of 4m tests per month.

AVCT test revenue = £5 x margin x sales
Gross profit margin (est.) 20%
Sales (est.) = 48m/year
GP = £46m
Factor x6

EV=£276m

Without any provision for sales of Abingdon’s own covid products we reach a the following valuations:

Without AVCT sales:
£111.4m = £1.15 per share

With AVCT sales:
£387.4m = £3.99 per share

I can only conclude that at £0.60 a share there is a real opportunity for significant growth.

I invite comments on method and assumptions.

67% of the shares are locked in until dec 2021.

The IPO was at 96p but those locked in will have got a discount. I suspect there may be a seller from that IPO who is shorting selling over his IPO purchase price as a hedge, knowing he can fulfil those shares in December.

I am hoping to see us retest the 80p level. There did appear to be a seller at that level and I’m hoping we’ve cleared them out.

Fair enough! Let’s see who’s here when the dust has settled.