Creo Medical Share Discussion Threads

[dr biotech] 20/9/2024 14:15

Only thing I can think of is that either some have concerns that breakeven will be delayed (I don't really see the logic of this as they have a much larger cash runway) or perhaps there is a forced seller in the background - Cannacord perhaps?
There have been some large sells printed.

But to hit a year low following is very disappointing.

[bmcollins] 20/9/2024 14:07

I fail to see why the share price has performed as it has after this weeks rns which I still read as very positive.
I have bought some more today only to see them drop again, perplexing...

[dr biotech] 19/9/2024 17:36

Deutsche Numis reiterated its Buy rating

"The transaction values Creo Europe at an equity value of €72m... a >2x uplift from the €27m paid in 2020... We forecast £29.5m in sales from Creo Consumables in FY24."

Tp 80p

[dr biotech] 19/9/2024 13:14

£60k pa according to the footnote. Doesn't mention this removes the possibility of a near term funding crunch and barely mentions that MTs distribution arms in regions that are undercovered could be used to sell their core products. I guess that Edison only found out the same time as us. Often they are able to put out a note within an hour, this one has taken a day. Perhaps the analyst that normally covers Creo was away.

Would also say that in general I feel Paid for notes generally aren't great as they are bound to be positive. But for small companies its probably the only way. There is almost no coverage of this in the wider media that I can find.

[peterrr3] 19/9/2024 12:52

I hope they didn't pay too much for that luke warm effort.

[dr biotech] 19/9/2024 12:04

There is a new note from Edison here. It’s not particularly insightful

//www.edisongroup.com/research/consumables-business-divested-in-strategic-move/33965/

[bmcollins] 19/9/2024 09:24

Agreed
Madness for the stock to react like this

[edwardt] 19/9/2024 09:05

amazed we have dropped back - have added a few just now

[dr biotech] 18/9/2024 20:17

Yeah, whilst buying shares is always a risk, the major risk here has passed. Now they just have to prove they can sell their core products.

I'm not on twitter, but some chinese guy has posted this (in chinese). Doesn't add a lot but its written from their point of view

Nanwei Medical: Announcement on the purchase of 51% equity of Creo Medical S.L.U.

[Sun] Basic situation: It is planned to use its own funds to purchase 51% equity of the target company CME through Nanwei Holland. The estimated transaction amount of this transaction is not more than 36.72 million euros (equivalent to approximately RMB 289.4821 million). After the completion of this transaction, the company will hold 51% equity of CME through Nanwei Holland.

[Sun] Target company: A wholly-owned subsidiary of Creo, it is a channel company for the sales of medical device products. Its distribution products include Creo's self-developed products and medical device products in the fields of digestion, urology, respiratory, disposable endoscopes, etc. produced by other related medical device companies. Among them, endoscopic consumables and disposable endoscopes account for nearly 70% of the target company's revenue in 2023. The main business is concentrated in Western Europe, covering the United Kingdom, Spain, France, Germany, Belgium, Luxembourg and other countries.
The revenue in 2023/2024H1 is 31.942 million/16.593 million euros, and the net profit is 3.468 million/1.574 million euros respectively. [Sun] Acquisition price: Combining the income method and the market value of the original shareholder Creo, the equity value of the target company is finally determined to be 72 million euros after friendly negotiation between the two parties. Valuation calculation: Referring to the content of the announcement, the PE of the target company in 2023 corresponding to this acquisition is about 21 times, and the PS is about 2.25 times. [Sun] Transaction funds: The funds for this transaction come from the company's own funds. As of June 30, 2024, the company's asset-liability ratio is 14.81%, and the company's monetary funds are 122,329.27 million yuan. The transaction amount accounts for about 23.66% of the company's monetary funds.

[edwardt] 18/9/2024 19:36

The cost of equity will have dropped sharply- many here backed the last raise at distressed levels - that fear of a close your eyes and follow your money requirement has gone - the equity should push on now as a result imho - let's face it none of us bought this for the stake they sold - the other prize is much bigger - love the management ambition

[dr biotech] 18/9/2024 15:47

Sorry my mistake - should be 1.8m

The other thing is that looking at management forecasts for the next few years, there is little growth in the European consumables - its all forecast to come from the US sales and the core products. So difficult to see much downside.

[peterrr3] 18/9/2024 15:41

Got a guernsey on Motley Fool, now need Deutsche Bank to give it an upgrade as they follow and are a fan and maybe it can add to today's gains. Also the US crowd should be helping out.

[sinzu] 18/9/2024 15:18

Dr Biotech,

for the share they have partnered out, they will be sacrificing 51% of €3.6m based on last year's pre-tax profit, which is €1.836m and NOT €3.6m

Converted to GBP at the current exchange rate is £1.55m pre-tax, so compared to the significant cash injection and the benefits to come from the partnership, it's almost an irrelevance.

They could probably earn the same amount annually if that cash were to be on a deposit account, but obviously that money will be put to good use.

[dr biotech] 18/9/2024 14:07

Hopefully this will be the start of a steady rise - the pullback is a bit disappointing though. The price is only where it was a couple of months ago so no big change yet.


One way of looking at this deal is what are the partners getting - 51% of a distribution company valued at 20x historic earnings - thats not particularly cheap. So they must also value access to the core Creo products.

Presumably there must be some overlap between Creos own products and Micro Techs - I guess that can be resolved easily enough.

Obviously losing €3.6m of profit may push back the time until breakeven. This should be more than compensated for by the cash injection and more hopefully a steeper sales ramp making a more valuable business in a shorter timeline. Getting speedboat and microblate etc into china was always going to be tricky, hopefully this will be key.

(FWIW I've just added at c32.5)

[1swifty] 18/9/2024 13:37

Guess this news was the reason for holding back on 2024 H1 results. If they come in positive over the next week the share price could see some significant gains.

[sinzu] 18/9/2024 12:20

Really happy to see this news from the company.

Well done to the Creo management.

Bodes very well for the future progression and expansion of the company and getting it's award winning products into hospitals and clinics and widely adopted.

[74tom] 18/9/2024 12:16

The poster said current market cap, not the value prior to the announcement...

[bjfanc] 18/9/2024 12:10

I'd argue. You'd do the calculations with the market value prior to the announcement. Using the equity value quoted in the statement.So depending on exchange rate used. It would give a percentage roughly in the middle circa 58%.

[edwardt] 18/9/2024 12:01

bet it has another wave higher on US open

[74tom] 18/9/2024 11:44

imjustdandy

The company is valued at £133m, they are going to get net proceeds of €30m (£25m) and have a remaining interest in Creo Europe of £30m. 55/133 is 41%, not 75%.

It gives them breathing space financially, however they are losing pre tax profits of ~£1.8m and revenue of ~£14m from Creo Europe.

Net net it's a positive, but the real value driver is growth rates in the original Creo endoscopy business.

[edwardt] 18/9/2024 11:42

gotta give a hat tip to them

[bladderman] 18/9/2024 11:41

Nt to sell now I'm afraid

[professoraim] 18/9/2024 11:40

Should push on to 100p

[bjfanc] 18/9/2024 11:39

Well that removes the funding worries, that had been causing the share price to fall to a yearly low.

[bladderman] 18/9/2024 11:37

How you figure that