Oneview Healthcare PLC

ONE Details

Launch of Cloud Enterprise Platform: Oneview Healthcare PLC (ASX: ONE) is engaged in the development and sale of software for the healthcare sector. The market capitalisation of the company as on 01 April 2021 stood at ~$157.12 million. As per a recent update, the company has announced the launch of CXP Cloud Enterprise, a cloud-based care experience platform. The platform enables health systems to integrate technology and engage patients, thereby addressing non-clinical demands on care teams.

FY20 Performance Update: The company reported an increase in recurring revenue by ~13% to ~$8 million in FY20, aided by the expansion of live beds when compared to the prior corresponding period. There was also an improvement in the gross margin to 67% in FY20, owing to the change in revenue mix towards higher-margin software recurring revenue. Better cost control measures narrowed down EBITDA loss to $9.7 million. The cash balance of the company stood at $10.6 million as of December 2020.

FY20 Financial Performance (Source: Company Reports)

Outlook: The onset of COVID-19 has accelerated the need for advanced virtual models of care. The company has agreed on strategic partnerships in the second half of FY20, and this provides the base for its go-to-market strategy in the US market.

Stock Recommendation: The company has been recently awarded the ISO 27001 certification in recognition of its transition to Cloud Enterprise. As per ASX, the stock of ONE is trading above its average 52-weeks’ levels of $0.027-$0.485. The stock of ONE gave a positive return of ~744.44% in the past three months and a positive return of ~357.83% in the past one month. On a technical analysis front, the stock of ONE has a support level of ~$0.289 and a resistance level of ~$0.490. On a TTM basis, the stock of ONE is trading at an EV/Sales multiple of 10.2x, higher than the industry median (Software & IT Services) of 4.4x. Considering the stock’s decent returns in the past few months, valuation on TTM basis, and the current trading levels, we are of the view that most of the positive factors have been discounted at the current juncture. Hence, we suggest investors to wait for a better entry-level and give an ‘Expensive’ rating on the stock at the current market price of $0.380, down by 3.798% as on April 01, 2021.

ONE Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

ResApp Health Limited

RAP Details

Licensing Agreement with AstraZeneca: ResApp Health Limited (ASX: RAP) is engaged in the development and commercialisation of its ResApp technology for providing health care solutions for respiratory disease. The market capitalisation of the company as on 01 April 2021 stood at ~$51.97 million. As per a recent update, the company has secured a one-year licensing agreement with AstraZeneca K.K. to license its cough counting technology for application in a program to support asthma patients. Under the agreement, the company's cough counting technology will be integrated into AstraZeneca’s smartphone application, and help patients to keep a track of symptoms.

H1FY21 Performance Update: The company has reported a revenue of $46,197 for the half-year ended 31 December 2020. The net loss stood at $3.12 million during the period. It ended the quarter with a cash position of $4.21 million as of 31 December 2020. The net cash outflow from operations during the period was $2.98 million.

H1FY21 Financial Performance (Source: Company Reports)

Outlook: The company has secured TGA clearance for its wearable watch on 25 March 2021, and is well-positioned to sell the product in Australia.

Key Risks: The company has very small market capitalisation and has the risk of revenue generation. Its profitability depends on its ability to win key contracts and partnerships with strategic clients.  

Stock Recommendation: As per a recent update, Medgate AG has commenced a three-month pilot trial of RAP's smartphone-based acute respiratory diagnostic test ResAppDx across its telemedicine services in Switzerland. As per ASX, the stock of RAP is trading below its average 52-week levels of $0.052-$0.230. The stock of RAP gave a positive return of ~15.51% in the past one month and a negative return of ~6.94% in the past one week. On a technical analysis front, the stock of RAP has a support level of ~$0.055 and a resistance level of ~$0.08. On a TTM basis, the stock of RAP is trading at a P/BV multiple of 9.4x, lower than the industry average (Technology) of 10.5x. Considering the current trading levels, valuation on TTM basis, TGA clearance, licensing agreement with AstraZeneca and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.067, down by 1.471% as on April 01, 2021.

RAP Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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