This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0
Synektik
BUY
FV PLN 39.9 from PLN 45.0
31% upside
Price as of 16 November 2022 PLN 30.55
In this report, we update our forecasts and valuation of Synektik. Based on new forecasts of financial results and the current risk-free rate, we set our Fair Value at PLN 39.9/share, which implies 31% 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 high financial results, in 2022/23 we assume nearly PLN 40m of adjusted EBITDA, and a significant improvement in cash generation thanks to higher profits and lower working capital requirements. Synektik is currently valued at 8.5x 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. According to our calculations, in 2H22 the company will deliver 12 da Vinci devices, including seven in Poland and five in Czechia and Slovakia. Four deliveries should be booked in 4Q21/22 while the remaining part (eight devices) in 1Q22/23. The high demand on the Polish market results from the current low penetration of surgical robots on the domestic market, but also from the start of reimbursement of procedures using robots by the National Health Fund from April 2022. On the other hand, on the Czech market, where the utilization of average device 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 4Q21/22 and 1Q22/23. We expect that in 4Q21/22 Synektik will report PLN 71.8m in revenues, +38% y/y. Reported EBITDA should amount to PLN 9.0m (+36% y/y), and adjusted EBITDA to PLN 10.2m (+39% y/y). We estimate that reported net profit will amount to PLN 5.0m, an increase of 57% y/y. In 1Q22/23, we assume the sale of eight 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 120m in revenues and approximately PLN 15m in adjusted EBITDA. For the entire FY22/23, we estimate PLN 302m in revenue, PLN 39.5m in adjusted EBITDA and PLN 15.0m in net profit.
Valuation. We value Synektik using a 10-year DCF model. Taking into account the new forecasts and the current risk-free rate, we are lowering the company's Fair Value to PLN 39.9/share from PLN 45.0/share. The new valuation implies 31% 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
GPW’s Analytical Coverage Support Programme 3.0
