20.06.2016 - Equity Research Einzelstudie // kaufen

Research Report (ANNO) – SYGNIS AG - english

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Unternehmen: SYGNIS AG
Branche: Biotechnologie-Pharma
Rating: kaufen
Kurs bei Erstellung in €: 1,44
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 4;5a;5b;6a;7;10;11

„Next Generation SYGNIS”; The planned acquisition of Expedeon creates great potential for sales in the USA and Asia; Post-money target price raised

SYGNIS AG plans on passing a resolution for a capital increase of up to 20.54m new shares at the Annual General Meeting on 20 June 2016. The core component of this capital measure is the acquisition of the life sciences company Expedeon through a planned capital increase in kind whereby the shareholders of Expedeon Holdings Ltd. will be able to transfer their participation in full against 15.72m SYGNIS shares (plus a cash settlement of EUR 1.70m).

After the conclusion of this planned transaction, SYGNIS AG will have a majority shareholding in Expedeon Group, which is based in the UK and operates in the proteomics sector. This will combine the second important sector of molecular biology beside the core genetics segment within SYGNIS AG, leading to a horizontal expansion of the product range. This means that SYGNIS AG will have a presence in the fastest growing markets in the life sciences industry. Average annual growth of 20.8% is predicted for the core NGS (next-generation sequencing) market up to 2021. The proteomics sector should increase by an average of 15.4% annually up to 2019. A significant factor in this dynamic development is the high level of technological progress which should further increase the massive economies of scale, while at the same time an entry into high-volume markets (e.g. the hospital sector) will follow.

With its products, SYGNIS AG is in an excellent position to participate in this development. With the completion of the product development, the company focuses now on the marketing of existing products and the short-term launch of new products. The planned acquisition of Expedeon will lead to an expansion of the product range and also to a quick growth in sales capacity. The Expedeon Group has direct sales channels in the UK, Germany, France, Asia and the USA, which is the largest market for life sciences applications. Furthermore, various OEM agreements have been closed in recent years, thus opening up additional sales channels. Synergy effects will result from the combination of production and administrative structures.

We have included these in our consolidated (post-money) estimates. Both companies combined should grow more strongly due to the stated synergy effects than they would in their current standalone status. The expected high growth in revenue should result in breakeven in financial year 2018, and breakeven should even be reached on a quarterly basis in 2017. Expedeon Holdings Ltd. has already shown positive results for several years, and also has good internal financing capability.

We have included the consolidated revenue and earnings estimates and the planned capital increase in our adjusted DCF valuation model. The resulting fair value per share at the end of the 2016 financial year corresponds to a target price of EUR 3.95 per share. We have therefore slightly raised the previous target price of EUR 3.75. The target price increase is due to the improved risk structure of the consolidated company (SYGNIS AG + Expedeon Holdings Ltd.) and reflects the potential synergy effects arising from the merger of the two companies. Based on the current share price of EUR 1.44, we rate it a BUY.


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