Member Info for RN1MLT

Hi Ginandmilk,

Me too, I do not keep a target on SP – If it is undervalued has growth potential with limited downward risk, I will keep the stock. Also, it is too early to fix an exit price for TRX for anybody, we are far from take off, still taxing to the runway IMO.

However, I have a range of figures where I believe TRX will be/should be in next 1-2 years, again these are based on current/future projected revenues. The big disconnect for this stock is its valuation – just 3-4 times of sales!!!! For a company with strong IP, FDA and CE approval, huge growth potential and 2-3 years of sales traction in key markets of US and UK, this is an insult!!

Let me explain:

If you go through the company books for the period of 2017, when woodford and Invesco owned 54% (Invesco - 28%, woodford - 26%) of this company and made the acquisition of ‘Cell Right technologies’, TRX was valued at 20x sales (revenue was 5.2M with 116M Mcap)!!! The projection then was that TRX will generate 70% Y/Y growth figures over time (4-5 years) hence it was classed as high growth stock with 20x sales multiples. You know what, TRX exceeded those growth numbers but when it needed more cash to expand so that it can keep growing at more than 70%Y/Y, woodford collapsed and Invesco pulled all the money out of this stock, so they could not raise money in time to keep up with the growth, hence sales flattened at 13-14M. While the revenue of the company more than doubled from 2017 to 2019, the value of the company collapsed from 116M to 11.7M (10 times!!!) which then ‘recovered’ to 17.5M when the ‘May 2020’ placing happened. So, the poor stock performance is disconnected from the revenue growth or future growth potential of the company.

Despite everything negative that was happening with SP, we worked with top10 health care company for 2 years to develop products and launched one, grafted along to get the CE approval for OrthoPure® XT, educated the market with our Urogyn and dermis product lines. With the latest funding, this for me gives the company potential to grow at 70 Y/Y for next 4-5 years. Soon, we will get valued at 20x sales, when that happens, I will be re-evaluating my position here, so 20x sales is my target valuation for this company.

It could be 35M in sales by Q12023 or 50M in sales by Q12024!

Best

Thanks for sharing this Mafuta… very useful for us PIs to keep reaffirming that we are not falling prey to tricksters!

I hold similar views or must say read and come to similar conclusions over the years on how market get manipulated and make it very hard for retail investors to realise the maximum potential of their investment.

My mantra has been ‘’Do a lot of research before investing then do it again in 10 different angles. Only invest if you understand the business and happy with the valuation’’. This way I can TRY and break my hardwired instincts that tell me buy when SP is increasing and sell when it is dropping. Instead, I want to buy when it has dropped to its support price (or in some cases when it is cheap) and do not sell until it has reached my target valuation (this must be reviewed regularly).

Best

mbingo – It was an ‘investormeetcompany’ organised event here is the link:
https://www.investormeetcompany.com/investor/meeting/investor-presentation-relating-to-the-2020-interim-results-1

Thanks for pushing for this link as it allowed me to re-listen to the talk - it’s always more rewarding to rewind and analyse after few months of progress.

Btw, I stand corrected with my figure of £30M/year from the white label deal. That figure was not presented but he does say that ‘if I believe the figures that the customer is showing and expected sales from it, it will have a very significant impact on the revenues’ something to this effect – 25 minutes into the talk. He also adds that the space constraints will not impact this product line.

Hi mbingo, I think it was alluded to in the CEO interview last year.

When I said we are undervalued, I was referring to current valuation of TRX with 13M sales, 9M cash and reduced operating costs of over 1M. Future valuation wise, as per information in the public domain, in 2-3 years’ time, if executed well, we will be a 300M Mcap company!!

mbingo - We have been informed by the CEO last year that the white label deal with the Top10 healthcare company has the potential to add £30M/year with the current processing capacity i.e. without the phase 1 and 2 expansion that is underway. In the last RNS, we have been informed that the feedback from the products is very good and that sales are expected to gain traction this year. So, we should expect more than that 150M Mcap when all of this is executed. Timewise, it will take 2-3 years to reach the full potential.

Ginandmilk – me too, happy to wait long to realise the full potential but will be keeping a keen eye on every word of the RNS and information from the industry colleagues.

Best

Hi all,

With a bit of calm returning to the SP, I added more to my holding today. IMO our support is somewhere between 0.6p and 0.55p and SP is currently undervalued (discounted for COVID, execution risk etc.).

We have strong IP, a new team focussed on accelerating the sales for our products and funding until 2022 (with phase 1 and 2 executed) or till 2023 (if Phase 2 is postponed/timed based on growth in sales). This is a mid-long term play with SP gradually increasing over a 3 month cycle until market gains confidence and that should trigger a re-rate to a minimum of 5x sales multiples.

I found the SP rally till 0.75p before the results very interesting as it was backed by huge volume. Of course, it must be a managed leak from an insider/advisor that caused it – IMO, a job well done to increase the visibility of our group.

I have a feeling that an II is accumulating for a position in TRX, hence the slide in price. We have seen this before twice in the last year, around 0.55p and 0.6p.

DYOR,

Best

Hi Ginandmilk,

They will issue ADRs in US, they can bundel 5, 10 or 15 of TRX stock in to 1 ADR, so lets say we grow to a SP of 2p, then the company does a consolidation of 1:100, making the SP £2, then you can bundel 5x of these in to 1 ADR and list at NASDAQ for £10/ADR.

Best

Simple answer Ibiza28 is that the TRX is currently under valued... 5x sales, which is the norm, is 0.92p for 13M sales.. still under fair value.. you can calculate the future growth... conservative 17M in 2021 will be 1.2p SP...... top end estimate of 22M sales (70% Y/Y growth predicted by the analysts) is 1.56p.. so IMO we are just starting to take off..

He sounds like a novice Ginandmilk, anybody with the subject knowledge can tell he has no clue about the intricacies of the wound healing process and the role played by the tissue matrix. The key for our products gaining traction is their low rate of rejection by the host along with improved life quality post surgery compared to synthetic materials.

Hi Ginandmilk,

He actually talked about our TRX and displayed the logo and charts!

However, this being a public board probably I shouldn't paint the devil on the wall.. You are right, time for a strong brew (personally a coffee man)

Ta!

Phew.. I was dreading that this will destroy the stock... Its company's/LTHs money that will be robbed from this pump and dump schemes.. it's akin to pillegeing a city.. leaves the residents and the rules empty and some may never recover... If it happens the company will not be able to raise money in the future at the right valuation.. I am hopeful that the IIs and BOD have mechanisms to fight this raid (if ever materialises) and future such raids..

*Apologies Ginandmilk

So many probabilities floating in my head that could explain this new found love for TRX, but until I read the RNS on Monday (I don't think they can keep it out longer without explaining the reason for this raise), I will keep to fundamentals i.e we were massively undervalued during the placing, so it is but natural to recover to true value - nonetheless, timing of this raise is curious!!

Gnandmilk.... We don't value biotech/Medtech as much as the peeps on the other side of the pond do!! If we get placed on the NASDAQ, your 50p target is achievable in under 3 years IMO!!!! If that happiness, I will join you in the millionair club!

I agree Ginandmilk and Ohmni, Sp of 5p, however fascinating it is, is still a few quarters away IMO.  Many things have to fall in place like:

1) covid receding,
2) Aggressive sales to capture a bigger share of the pent-up demand - this could carve out a bigger, sustainable market share for us, which could easily snowball into something very big in 2-3 years.
3) Good feedback for the products that we are doing for J&J (?) - This could also lead to expansion of the product line.

Lets hope the Bod exceeds our expectation!

Looking at the trading patterns of yesterday and today (trades were done over the asking price pushing the price up!), We could be on to something soon!!

Hi Ginandmilk, your wish has been granted by the  looks of it!!

Hi Chester18, .92p is indeed sensible for this share, it will just be 5x sales, 13Mx5=62M Mcap i.e .924p, so it is not out of reach. Mcap of 5x sales is the average for biotech/medtech companies.

Waiting for the trading update and may be some golden nuggets of information!!

Best

Hi hamsters18, actually thank you for sharing your experience with ‘sharedeal active’, I haven't heard about them before so if you haven't mentioned, I wouldn't have known about them, so cheers mate for sharing!!

Thanks KJM100K, much appreciated!

Hi KJM100K,

Offtopic - If you don't mind me asking, which trading platform/broker are you using? I am looking to move my ISA soon so just doing some research.

Cheers!

Hi Ginandmilk,

My research also lead to J&J (through DePuy Synthes) as our White label deal partner, infact they do mention that 'DoD' is indeed processed by 'cellright technologies' in their demo video(https://www.jnjmedicaldevices.com/en-US/product/dermis-demand-allograft). We all know who owns 'cellright technologies'!!

I didn't want to mention this before as I feared it would be seen as a 'ramp' but my valuation and SP estimates I put forward to 'Chester18' were based on the assumption of this news coming out by H2-2021 through an RNS by the company. We should also then get some sales numbers from this product and hopefully as mentioned in the TRX annual report, they could announce a 'Major expansion' of their product line with J&J.

IMO, only with some clear guidance through RNS on this deal will allow us to make meaningful growth estimates and SP predictions for post 2021.
Best

Hi MrIndia,

We are expecting it around 22nd Jan but nothing is confirmed yet.

I was able to sell 100K easily. That tells me there is good buying pressure, which is always a good sign for near term SP movement.

IMO, the MMs are filling a big order around 0.57-0.58p.  But I have to say, IMO the company is in the process of rebuilding its register with a new set of LTHs, so it's hard to predict/understand these near term SP fluctuations.

Best