Kromek Share Discussion Threads

[strategicinvestor2] 18/1/2022 18:15

Well done ACQ88 - I always like that you give rational for your views and always update your thinking as the business develops.
GLA

[ark87] 18/1/2022 18:08

Confirmation Simon Thompson is not throwing in the towel but has in fact doubled down. I certainly feel more optimistic after reading that. ACQ fairplay you where correct in your assessment regarding ST hopefully see a nice rise tomorrow.

[strategicinvestor2] 18/1/2022 18:05

Yes patience is required here and many running out. Am happy for it to play out and am confident of material gains from here. Interesting move to split business and realise value this way. Yes probably 2-3p rise on IC analysis and tip…

[value hound] 18/1/2022 16:43

Retipped by Simon Thompson:

--

Investors are materially underestimating trading prospects of Kromek (KMK:14.5p) in what could be a pivotal year for the Sedgefield-based radiation detection technology company that is focused on the medical, security screening and nuclear markets.

Firstly, during our results call, chief executive Arnab Basu revealed that he expects first commercial sales by April for Kromek’s bio-security pathogen detectors which sample air and identify the presence of any biological pathogen including Covid-19. The company is working with the NHS and a major transportation group, both sectors being obvious candidates for deployment on a commercial basis.

Secondly, Canon’s recent US$270m (£199m) acquisition of Redlen Technologies, the only independent commercial producer of Cadmium Zinc Telluride (CZT) detectors globally other than Kromek, is material. House broker Cenkos Securities’ read across implies a valuation of £196m (45p a share) on Kromek’s medical imaging business, or more than three times Kromek’s current market capitalisation.

Moreover, by removing one rival from the market, it means that medical imaging OEMs – Phillips and United Imaging, for instance – that are looking to adopt CZT technology but lack in-house production capacity are now far more reliant on Kromek than previously. Basu notes that three new strategic original equipment manufacturers (OEMs) have placed initial orders with Kromek and “we expect a number of contracts to be signed in 2022 as they look for surety of supply”, adding that “more conversations are ongoing”. They could be very large contracts given that one seven-year medical imaging contract signed with an OEM in 2019 is delivering US$58m of revenue to Kromek over a seven-year contract term.

Basu also revealed the potential to split out the group’s two distinct business units – chemical, biohazard security, radiation and nuclear (CBRN) activities comprise the other one. The fact that the directors have segmented the two operations in the results presentation is telling. The point is that a medical imaging OEM looking for security of CZT supply could be tempted to make a bid for that part of Kromek’s business, which analyst Mike Jeremy at Equity Development values at £225m. He also highlights the undervaluation of the CBRN business, which could generate half of group revenue of £18m in the 2022/23 financial year, and could be worth £54m.

Importantly, with 96 per cent of budgeted annual revenue of £15m covered by orders as well as 60 per cent of the £18m revenue estimate for 2022/23, then the long-awaited move into cash profitability is on the cards. Jeremy predicts £0.6m cash profit in the second half to 30 April 2022 to wipe out the £0.6m first-half loss, and is pencilling in cash profit of £0.75m in 2022/23.

Kromek’s shares have been volatile since my last buy call at 15.75p (‘Backing a tech winner in the fight against Covid-19’, 14 July 2021), but with game-changing orders from medical imaging OEMs likely and the commercial launch of the Covid-19 airborne detector imminent, then I maintain the view the share price could double. Buy.

[talk2tony] 18/1/2022 15:35

Somewhat disappointing results as they don't seem to have stemmed the losses and the reduction in loss is due to what seems to be a one-off forgiveness of Paycheck Protection Programme rather than operational/revenue improvements. Also when a CEO hypes up a new business line early on then over time it will lead to disappointment due either to outright failure or length of time getting the new line to market and delivering revenue. Hopefully it is the latter for the pathogen detector.

I was not expecting fireworks however as any reasonable contract for detector prior to interims would have required an RNS. Also they are now working on "productisation phase" with various model types which hopefully means that the technology can be used for very large buildings such as airports down to perhaps small offices with price points to match. The ability to capture both government and corporate markets would be very exciting. Also it is hoped that the manufacturer/s can cope with any potential surge if this really does take off. Other activities such as patents seems to be progressing.

So like many high-risk/high-reward stocks it is like the old 2p coin pusher arcade game. Not sure if we can rely too much on Simon Thompson this time around unless we get some good news regarding sales. His tips are the icing on the cake rather than the cake itself. Therefore the cake needs to be a bit more desirable. I did buy the share based on his tip and further research and it is still worth holding the stock as the reward is still potentially very lucrative. Patience as always with these stocks.

[deedledee] 18/1/2022 14:56

Not putting another penny here. Simon Thomson hang your head in shame for promoting this or for me in believing your view or the company promotional video.

[quepassa] 18/1/2022 13:55

hasn't this share already caused many share tipsters a great deal of embarrassment and loss of face in the past.

and perhaps even loss of hard cash to their readers who may have taken a cue from their recommendations.

i don't think many financial tipsters in their right mind would risk the chance of yet more embarrassment by including this in their top-lists again in the forseeable future.

all imo. dyor.
qp

[aqc888] 18/1/2022 12:35

My more pessimistic prediction was even too optimistic...

I’ve a feeling there will be a very boring interim update. Something like we’re on track to not make a loss and commercialisation of the biological pathogen detector ‘is progressing well’, but no sales.

I’ve higher hopes for some share price excitement from Kromek being in Simon Thompson’s 2022 bargain shares edition in early feb.

Probably the best hope of unexpected good news will be from nuclear detector sales.



...tenders for the nuclear detectors are in the tens of millions we hear on the proactive interview. I’d say there’s a good chance of a big gain if it features in Simon Thompson’s 2022 edition, which I think is very possible

[aqc888] 18/1/2022 12:31

For gains in the next month there is just the hope of Simon Thompson left

[aqc888] 18/1/2022 10:48

If you listen to the proactive investor interview the nuclear detector news sounds very promising indeed. Very disappointed about the biological pathogen detectors almost totally ignored, bizarre. ImmI think there’s enough here for inclusion in Simon Thompson’s bargain shares in early Feb.

[aqc888] 18/1/2022 08:53

What happened with those “serious discussions with multiple governments” re biological pathogen detector? They claimed to have found a manufacturing partner at the AGM not sure why that’s supposed to be new news. Commercialisation for bio detector was scheduled for end of 2021-2022 yet no update. Very patchy results. Still a good chance of being tipped by Simon Thompson again in my opinion at his annual bargain shares edition, since it’s a strong favourite of his and its position has improved, while getting closer to the biological pathogen detector release. Good to see a further $6m extension from darpa on this.

[b00mb0y] 18/1/2022 08:47

Thoughts, AQC888?

[dexter1612] 18/1/2022 08:31

Structurally sound,can turn a profit and appears to be ideally placed in several markets. Should be performing a lot better, definite review required.

[slicethepie] 18/1/2022 08:27

Time for a strategic review, there is substantial value here but the group is too small and the ce keeps chasing rainbows.

[strategicinvestor2] 18/1/2022 08:24

Equity Developments now 65- 75p valuation read across.

Looks well on track for EBITDA profit this year and strongest position they have ever been in.

Excellent cash management.

Imho DYOR

[davethechef] 18/1/2022 08:21

All those trials...and still NO interest!?!
Ah well...perhaps the next Pandemic...!?!

I predicted this months ago unfortunately. Doubting they'd sell the CD in numbers needed & suggesting their bio-terrorismm technology is there best bet.
Very disappointed re their CD but as we know the latest Omicron is diminishing now: the peak across the globe has passed

[quepassa] 18/1/2022 07:54

Yeah, right.....ok

Fantastically strong:-


Loss before tax reduced to GBP3.1m (H1 2021: GBP3.4m loss)

Revenue was GBP4.7m (H1 2021: GBP4.6m)



Cash already down from £15m in April to £10m in October



ALL IMO. DYOR.
QP

[edmonda] 18/1/2022 07:50

A sound H1 with revs up 2.9% despite environment: Equity Development retains a fair value of 26p/share. But the recent takeover of Redlen by Canon highlights a materially higher industry valuation.
Read and listen to detailed new research note here:

[strategicinvestor2] 18/1/2022 07:30

Strong results and confidence for full
year ….

[aqc888] 17/1/2022 21:20

I’d put more weight on the multiple 250,000 & 500,000 buys in the last few trading days rather than a bunch of less than 4K sells... anyhow we’ll all find out tomorrow at 9:30 I believe?

[b00mb0y] 17/1/2022 17:47

Trades today and share price performance show the confidence or lack of it on the penultimate day. Down, down, deeper and down

[aqc888] 17/1/2022 14:29

X4 of today’s share trades were over £4K. The other x30 were below that value. Very small volumes. Looking forward to tomorrow and made a further small top up on today’s weakness

[aqc888] 17/1/2022 12:54

Shares can sometimes have an uncanny habit of falling following quepassa taking a large position.

The inverse can also be true.