In this report, we update our forecasts and valuation of Synektik following the 4Q21/22 results release. Based on new forecasts of financial results and FX rates and the current risk-free rate, we set our Fair Value at PLN 42.0ps, which implies 23% upside potential to the current share price. We maintain our Buy recommendation. Synektik is one of our top picks in the healthcare & biotech sector; the company is entering a period of soaring financial results, in 2022/23 we assume PLN 44m in adjusted EBITDA, and a significant improvement in cash generation thanks to higher profits and lower working capital requirements. Synektik is currently valued at 5.9x EV/EBITDA for 2022/23E, which in our opinion is an undemanding level for a growing business with an increasing share of recurring revenues and development prospects for surgical robots, especially on the Polish market.
Accumulation of contracts for da Vinci robots. Over the past few months, Synektik has issued a number of announcements concerning the submission of offers and signing of contracts for the supply of da Vinci surgical robots in all three of its markets. In 4Q21/22 the company booked four deliveries, while another seven systems should be booked in 1Q22/23. The high demand on the Polish market, but also from the commencement of reimbursement of procedures using robots by the National Health Fund from April 2022. On the other hand, on the Czech market, where the average utilization of devices is much higher than in Poland and close to its maximum level, the growth in the number of treatments results in further purchases from new as well as existing users.
Results momentum in 2022/23. Following the release of 4Q21/22 results with stronger than expected EBITDA margins in the medical equipment and IT segments, we upgraded our forecasts for 2022/23. In 1Q22/23, we assume the sale of seven da Vinci devices and the completion of a large contract for delivery of a ZAP-X system to a hospital in Olsztyn, which, according to our preliminary estimates, should translate into over PLN 125m in revenues and approximately PLN 20m in adjusted EBITDA. For the entire FY22/23, we estimate PLN 299m in revenue, PLN 43.8m in adjusted EBITDA and PLN 17.6m in net profit.
Valuation. We value Synektik using a 10-year DCF model. Taking into account the new financial and FX forecasts and the current risk-free rate, we are upgrading the company's Fair Value to PLN 42.0ps from PLN 39.9ps. The new valuation implies 23% upside potential relative to the current share price, and therefore we maintain our Buy recommendation.
Analyst: Åukasz Kosiarski lukasz.kosiarski@ipopema.pl + 48 882 108 382
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