Osteopore Limited

OSX Details

Australian & New Zealand Distribution Agreement: Osteopore Limited (ASX: OSX) is engaged in the production of 3D printed bioresorbable implants that are used in conjunction with surgical procedures to assist with the natural stages of bone replacement. As on 6 November 2020, the market capitalization of the company stood at ~$62.15 million. The company has recently entered an exclusive Distribution Agreement with LMT Surgical to promote and sell its products within the Australian and New Zealand markets. Under the terms of agreement, LMT Surgical will market products of OSX for oculoplastic and neurosurgical procedures and patient-specific implants.

Quarterly Highlights (For the Period Ended 30 September 2020): During the quarter ended 30 September 2020, the company reported an increase of 40% in revenue to $407k, highlighting the consistent growth in demand for 3D printed bioresorbable implants despite the disruption from the COVID-19. The operating cash outflow for the quarter stood at S$240,000. Over the quarter, the company raised A$8.5 million, increasing cash at bank to A$9.8 million.

Growth in Revenue (Source: Company Reports)

Stock Recommendation: The company saw an increase in sales into the EU territories, including Italy, Greece and the Netherlands. The company is likely to witness continued growth in revenue with an increased presence in multiple geographic territories. It also expects to expand in manufacturing capability to meet future demand. As per ASX, the stock of OSX is inclined towards its 52-weeks’ low price of $0.275, proffering a decent opportunity for accumulation. On a technical front, the stock of OSX has a support level of ~$0.478 and a resistance level of ~$0.735. Considering the attractive trading levels, increasing presence in multiple geographies, key investment risks and modest long-term outlook, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.565, up by 6.603% on 6 November 2020.

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

ImExHs Limited

IME Details

Shares Issued Under Institutional Placement: ImExHs Limited (ASX: IME) is one of the leading medical imaging company which provides software to healthcare facilities. As on 6 November 2020, the market capitalization of the company stood at ~$44.549 million. The company has recently issued ~276 million fully paid ordinary shares at an issue price of $0.03 per share to institutional and professional investors. The company has also announced consolidation of its securities with a record date of 5 November 2020. Under the consolidation, the securities will be consolidated on a ratio of 50x and hence ~1,484,990,526 shares will be converted to ~29,699,842 and pre-consolidation options of 309,500,000 will be converted to 6,190,003 options. Trading in the post consolidation securities will start from 9 November 2020 on a deferred settlement basis.

Quarterly Performance (For the Period Ended 30 September 2020): During the quarter ended 30 September 2020, the company reported an increase of 30% in Annual Recurring Revenue on a constant currency basis. Recurring revenue represented 86% of Q3FY20 revenue and highlighted focus on building a sustainable and scalable subscription mode. During the quarter, the company generated $473k in ARR on the YTD basis. As at 30 September 2020, the company had a cash balance of $3.8 million, lower when compared to $6.3 million in the previous quarter.

Annualized Recurring Revenue (Source: Company Reports)

Stock Recommendation: The company is likely to reach EBITDA breakeven by December 2021 but may witness impact from second waves of COVID-19 in key markets. As per ASX, the stock of IME is trading slightly below the average trading levels. The stock of IME gave a negative return of 3.22% in the past three months and a negative return of 14.28% in the last one month. On a technical front, the stock of IME has a support level of ~$1.403 and a resistance level of ~$1.903. On a TTM basis, the stock of IME is trading at a price to book value multiple of 5.2x, higher than the industry median of 4.7x, and thus seems overvalued. Considering the current trading levels, volatility in returns in the past three months and higher price to book value multiple, we suggest investors to keep an eye on the business activities and give an ‘Expensive’ rating on the stock at the current market price of $1.5 on 6 November 2020.

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

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