ResApp Health Limited

RAP Details

Telehealth Commercial Agreement: ResApp Health Limited (ASX: RAP) develops digital healthcare solutions to diagnose and manage respiratory disease and provides telehealth services to emergency department, and primary care markets; and it also provides SleepCheck, a direct-to-consumer smartphone application for the self-assessment of sleep apnoea in 36 countries. As of 12 July 2021, the market capitalisation of RAP stood at ~$36.94 million. As per a recent announcement, the company has entered into commercial agreement with telehealth company Doctors on Demand.

Benefits of the Agreement:

• The integration agreement of ResAppDx and SleepCheck with Doctors on Demand also includes the exchange of key data to support future reimbursement submissions.
• Doctors on Demand caters to B2B and B2C that provides telehealth service with direct connection to 3,623 pharmacies which could be an exposure to the company.
• Deal includes launch and promotion of ResApp’s SleepCheck within Doctors on Demand’s virtual sleep clinic in Q3FY21.

Capital Raise: In April, the company has raised $5.5 million from financial institutions at a price of 5.8 cents per share.

Q3FY21 Financial Performance:

• During the quarter, Medgate commenced a three-month pilot trial of RAP’s smartphone-based respiratory test, ResAppDx across telemedicine services in Switzerland.
• The company has recorded an increase in Receipts from customers to $48k in Q3FY21, compared to $42k in Q2FY21. The cash used in operating activities was at $957k in Q3FY21, compared to $1,541k in Q2FY21.
• The company secured second licensing agreement with AstraZeneca Japan for the use of ResApp’s cough counting technology in asthma patient support program.
• The quarter ended with the cash balance of $3.2 million as of 31 March 2021.

Revenue Trend (Source: Analysis by Kalkine Group)

Outlook: The company has made R&D payments of $541k during the quarter which could lead to new product offering to customers. RAP has received $859,000 in government grants and tax incentives which could support company’s cash position. The collaboration of ResAppDx and Doctors on Demand will enable effective management of more patients and support with highest standard and innovative clinical practice in the delivery of remote care.

Key Risks: Due to COVID-19 pandemic, the company has faced challenges in clinical trails which got delayed and impacted the company’s financial performance and still the uncertainty prevails in near-term future.

Stock Recommendation: As per a recent update, the company has announced the publication of COPD data in the peer reviewed Nature Partner Journal, npj Digital Medicine.  The stock of RAP is trading below its average 52-weeks' levels of $0.040-$0.155. The stock of RAP gave a positive return of ~2.32% in the past one week and a negative return of ~68.57% in the past one year. On a TTM basis, the stock of RAP is trading at a Price/Book multiple of 6.7x, lower than the industry average (Technology) of 7.2x. Considering the current trading levels and valuation on a TTM basis, government relief package, capital raise from financial institutions, strategic collaboration and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.043, as on July 12, 2021.

RAP Daily Technical Chart, Data Source: REFINITIV 

Kyckr Limited

KYK Details

Business Update:  Kyckr Limited (ASX: KYK) offers automated technology solutions includes Kyckr Perpetual KYC, Kyckr Company Watch and provides real-time primary source data and access to legally authoritative company information. The market capitalisation of the company as of 12 July 2021 stood at ~$ 16.16 million. As per a recent announcement, the company has signed 12 contracts worth of $788,761 with the range of financial service organisations and partners.

Q3FY21 Financial Performance

• During the quarter, the company has recorded increase in revenue by ~10% to ~$645k, against $587k in Q3FY20. Whereas the March revenue in FY21 increased by ~39% to ~$274K, compared to March FY20.
• The UBO Verify product development and marketing activity has ramped up for launch.
• KYK has reported an uptick in Annual Recurring Revenue (ARR) by 13%, compared to prior quarter.
• The quarter ended with a cash position of $5.7 million as of 31 March 2021.

Revenue Trend (Source: Analysis by Kalkine Group)

Outlook: Kyckr is estimating to acquire new contracts worth of $209k in FY21. The new contracts indicate the increasing demand of Kyckr’s product and services amongst global corporations. Kyckr is progressing towards partner integration with 4 new client’s sales opportunity and 15 Live partner opportunities are at the contracting stage.

Key Risks: The company is exposed to due diligence risk which will have direct impact on core operational activity. Therefore, the company should have skilled personnel to identify authentic information for the clients.

Stock Recommendation: As per a recent update, the company has recorded First annual Ultimate Beneficial Owner (UBO) data sale of $155k for one partner in advance to the launch UBO Verify service. The stock of KYK is trading below its average 52-weeks' levels of $0.040-$0.099. The stock of KYK gave a positive return of ~9.52% in the past one week and a negative return of ~41.77% in the past one year. On a TTM basis, the stock of KYK is trading at a Price/Book multiple of 1.0x, lower than the industry median (Professional & Commercial Services) of 2.9x. Considering the current trading levels and valuation on a TTM basis, acquired new contracts, healthy cash position, strategic partnership, optimistic outlook and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.046, down by 2.128% as on 12 July 2021.

KYK Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices

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