Next Science Limited

 

NXS Details
 
Recent Acquisition to Aid Business Growth:Next Science Limited (ASX:NXS) is engaged in developing and marketing of its proprietary Xbio™ technology, which is used to reduce the impact of biofilm-based infections in human health.
 
Q3FY19 Performance Highlights for the period ended 30 September 2019: NXS reported its third-quarter performance highlights, wherein the company posted net cash used in operating activities at US$2 million and net cash used in investing activities at US$0.51 million. The company reported that its product Xbio™ is serving more than 100,000 patients and is available across 1,200 US hospitals. The company reported cash balance of US$20.26 million as at 30 September 2019. The company reported cash receipts from customers at US$0.9 million during the quarter, as compared with US$1.2 million in Q2 2019. Receipts included payments for prior quarter sales.
 

Estimated Cash Flow Figures (Source: Company Reports)
 
Guidance:  NXS updated that TorrentX Wound Wash is expected to be licensed for distribution in the US market prior to year-end. The company has started its clinical trials for early stage skin cancer treatment. The business is expecting a total cash outflow of US$5.07 million for Q4FY19, which includes US$1.8 million in R&D, staff costs of US$2 million, administration and corporate costs at US$0.75 million.
 
Stock Recommendation: The stock of NXS is trading at $2.450 with a market capitalization of ~$455.21 million. 52-week trading range of the stock stood at $1.240 - $4.730. The stock has delivered volatile returns of -10.56% and 58.75% during the last three months and six months, respectively. NXS has increased its distributions across the hospitals and is focusing on its upcoming clinical trials. Furthermore, the company expects to receive milestone payments and stocking orders for European launches from its distribution partners Zimmer Biomet and 3M, after obtaining CE Mark (Europe) for BlastX Antimicrobial Wound Gel and Bactisure Surgical Lavage. Considering the aforesaid facts, current price movement and business prospects, we have a wait and watch stance on the stock at the current market price of $2.450, down 3.543% on 31 October 2019.

 
 
NXS Daily Technical Chart (Source: Thomson Reuters)
 
 

Healius Limited

 

HLS Details
 
Growth in All Segments: Healius Limited (ASX: HLS) is engaged in providing facilities and support services to independent general practitioners, radiologists and a range of other healthcare professionals, enabling them in turn to deliver care to their patients in partnership with the Group’s pathologists, nurses and other employees. Recently, HLS informed that one of the Directors named Sally Evans, has acquired 15,000 fully paid ordinary shares at a consideration of $3.259993 per share.
 
FY19 Operational Highlights for the period ended 30 June 2019:  NXS reported its full-year financial results wherein, the company posted an underlying revenue of $1,804.5 million as compared to $1,704.6 million in the previous year. During FY19, the business reported NPAT at $93.2 million as compared to $87.5 million during FY18.HLS reported its EBIT at $167.3 million, up 4.5% on y-o-y basis, aided by double-digit growth in Imaging and Medical Centers. The company reported an investment of $12.5 million in greenfield sites, which was included in the EBIT. The company reported a positive momentum across all three divisions. In the pathology segment, the business showed strong performance along with margin expansion during the second half. In the medical centres segment, Health & Co moved from start-up loss to profit. Revenue for the segment went up by 13% and EBITDA increased by 14.3%. In the Imaging segment, revenue growth was supported by same site growth, continued strength in MRI, increased market share and opening of new sites.

FY19 Financial Highlights (Source: Company Reports)

Guidance: As per the management guidance, the company has a strong FY2020 pipeline, including BaU and M&A roll-ins in the medical centre segment. The business will introduce greater autonomy/skills at centres under its new operating model. In the pathology segment, HLS will focus on returns metrics within collection centre footprint.

Stock Recommendation: The stock of HLS is quoting at $3.080 with a market capitalization of ~$2.02 billion. The stock is trading near the upper band of its 52-week trading range of $2.190 - $3.315. The stock has generated returns of 10.54% and 4.17% during the last three months and six-months, respectively. The stock is available at a price to earnings multiple of 35.33x on trailing twelve months (TTM) basis as compared to the industry median of 14.3x. Enterprise value to EBITDA stood at 10.3x on TTM basis as compared to the industry median of 9.9x. Considering the aforesaid facts, price movement, and stretched valuations, we recommend a ‘Sell’ rating on the stock at the current market price of $3.080, down 5.231% on 31 October 2019.

 
HLS Daily Technical Chart (Source: Thomson Reuters)

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