08.10.2013 - Equity Research Einzelstudie // kaufen

Research Report (Update) - SYGNIS AG - BUY

pdf For the original study, please click here
Unternehmen: SYGNIS AG
Branche: Biotechnologie-Pharma
Rating: kaufen
Kurs bei Erstellung in €: 3,89
Kursziel in €: 4,35
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 4;5

Break-even expected in 2014; capital increase to strengthen liquidity and financing further growth

SYGNIS AG’s H1 2013 results reveal an absence of commercialisation revenues, as expected, although they do reflect revenues related to the out-licensing of QualiPhi to Qiagen. Thus, as a result of the low revenues of €0.32m, the company posted negative earnings (net loss of €2.04m).

A noticeable feature is the realisation of savings potential with regard to total costs. As part of the restructuring and the resulting change in the organisational structure, the number of employees was reduced to 18 (from 29 on 31st Dec 2012). At the same time, the total cost base fell to €2.36m in the first six months of 2013. Pro-forma figures for the previous year reveal that total costs in H1 2012 equated to €4.2m, which is considerably above the current figure.

SYGNIS’s shareholder’s equity declined to €4.31m (vs. €6.30m on 31st Dec 2012), in line with the net loss of €2.04m. Nevertheless, the corresponding equity ratio remains solid at 47.6% (down from 65.6% on 31st Dec 2012). Particular attention needs to be paid to SYGNIS’s liquidity. As of 30th Jun 2013 the company had cash and cash equivalents of €0.23m (vs. €0.59m on 31st Dec 2012). However, in July 2013 a group of international investors approved a loan of €0.60m. According to the company, its financial resources including the loan should last through to the end of Q3 2013. According to a company announcement (2/10/13), a capital increase is carried out to strengthen the company’s liquidity and for financing further growth. The issuance of up 1.17m new shares at a price of €2.65 is expected to generate gross proceeds of up to €3.10m. This capital measure is currently reflected in our valuation model.

In light of almost unchanged assumptions our current forecasts (for detailed forecasts, please refer to our research report from 4th Jul 2013) changed marginally. Based on our expectations regarding the timing of approval and commercialisation, we continue to anticipate first commercialisation revenues for QualiPhi in 2013. Out-licensing of the product to Qiagen, one of the world’s leading suppliers of testing technologies in the area of molecular diagnostics, was completed in the previous financial year 2012. Additional products currently in SYGNISs product portfolio should reach the market in the coming financial years.

On this basis, we expect first sales for QualiPhi in 2013. In 2014 we anticipate a significant revenue increase, which should allow the company to achieve operational break-even. Overall, we therefore forecast a sizeable revenue increase to €1.05m in 2013, €4.13m in 2014 and €7.37m in 2015.

Our DCF-derived fair value per share (post money) is equivalent to €4.35 (YE 2014). Comparing the previous target price of €4.55 the slight discrepancy is primarily related by the planned increase in capital and the resulting dilution. The new target price (post money) considers a scheduled gross income of €3.10 million as well as an increase in the number of shares upon to €10.53 million. In light of the current stock price of €3.89 per share (XETRA, 4/10/13) and even more regarding the strike price of the capital increase of €2.65, our fair value suggests an attractive upside. Hence, we maintain our Buy rating for SYGNIS AG.


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