25.08.2014 - Equity Research Einzelstudie // kaufen

Researchstudie Update – Sygnis AG - buy

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Unternehmen: SYGNIS AG
Branche: Biotechnologie-Pharma
Rating: kaufen
Kurs bei Erstellung in €: 21.08.2014; 2,60
Kursziel in €: 4,60
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 4;5

With revenues of €0.16m (€0.32m in 2013), SYGNIS AG had lower revenue in the first half of 2014. The main product, SensiPhi®, was launched on the market in the first quarter of 2014, but the worldwide licence partner, Qiagen, has delayed in launching marketing activities. Furthermore, the licence agreements concerning other products of the SYGNIS range have not progressed as projected. Even though a patent agreement was made concerning the DoubleSwitch technology with the German company SYSTASY Bioscience GmbH in the first half of 2014, the resulting revenue has also been lower according to the expectations.

Due to the low sales volume, the operating profit (EBIT) was negative with
€-1.53m. On the positive side, there were cost savings measures implemented resulting in the reduction of overall expenses from €2.36m (first half of 2013) to €1.69m (first half of 2014).

The revenue level required to reach operative break-even is approx. €3.4m based on the present cost structure of the company. In the 2014 business year, however, reaching break-even is not expected based on the expected sales revenue of €0.71m. The same applies for the coming business year in 2015 with a predicted sales volume of €2.62m and an EBIT in the amount of €-0.85m. This is due to the delayed growth curve of the completely new technology based on the SYGNIS enzyme SensiPhi®. The lower expected sales revenue is based on the assumption that there will be no significant front-up-fees incurred connected to licensing new products in the current business year.

In the 2016 business year, however, SYGNIS AG could reach a significant positive EBIT of €2.65m and thus reach break-even based on the expected sales volume of €6.23m. Besides the expected increase of revenue of Qiagen kits containing the SensiPhi® enzyme, the expected market launch of PrimPol by the company is a decisive criterion. Marketing by the company primarily yields higher revenues, because all sales proceeds are included in the revenue. There are no significant investments required in this respect, because PrimPol can be produced using the existing laboratory facilities and the enzyme is completely developed. Resellers shall be involved in case of an OEM business to reach broader marketing channels.

Based on increased revenue and lean organisational structures, the operating profit is expected to show markedly stronger growth as compared to sales. The profit is based on our long-term expected high EBIT margin of 65.0%.

Using a DCF model, we calculated a fair value per share of €4.60 (earlier: €6.00). Based on the current lower share price, we confirm our BUY rating.


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