Genetic Analysis, a diagnostic company within Life Science, is growing rapidly. To continue its expansion, the company needs to raise capital, expected to be done in several steps. First, in a direct issue to a group of existing shareholders, followed by a repair rights issue directed to existing shareholders. Its partner in China, is also expected to invest in the company early next year. In total, the company is expected to be able to raise up to NOK 25 million. This enables continued growth that will take the company to profitability.

The third quarter was soft due to earlier stock-building at larger customers. Sales increased by 17 percent to NOK 2.6 million compared to last year. So far, this year, growth stands at 39 percent. Positive elements in the report were a reduction in operational costs.

Estimates has been adjusted for coming years. In 2023, growth is expected to increase to 32 percent before accelerating in 2024 and 2025. Mangold use a DCF model to value the company, full dilution of upcoming shares is considered. This gives a new target price set to NOK 2.00 (3.40) per share in our Base-case. We see plenty of triggers in the stock which we highlight in this update. Above all, the company benefits from a growing microbiome market.

Länk till analysen