November 25th, 2022 | 23:16 CET
Viromed Medical AG, Encavis AG, K+S - The foundation is laid
Table of contents:
Encavis AG - Buy, Buy!
The outlook for MDAX-listed Encavis, a producer of electricity from renewable energies, is clearly positive. As one of the leading independent power producers, the Hamburg-based company acquires and operates solar and wind parks throughout Europe. Encavis increased sales by 33% YOY in the third quarter to EUR 128 million. EBITDA growth was as high as 38% compared to Q3 2021 to EUR 101 million. Given the current plans to skim electricity market revenues, the Company has set aside provisions of EUR 30.3 million as a precautionary measure. Still, it continues to expect the Company to develop positively. Solar and wind parks with an output of 180 MW were connected to the grid in the first nine months.
The product portfolio has now been expanded again with the purchase of a solar park in Sweden. As part of its partnership with the Norwegian solar park developer Solgrid AS, a second solar park has now been acquired. The total capacity is around 14 MW. It is scheduled to be connected to the grid in the third quarter of the coming year. In addition, the two partners plan to build further solar parks with a total capacity of over 100 MW. The analysts at DZ Bank also see the Encavis share as a buy. After the figures, their price target of EUR 24 and the "buy" vote was reiterated. The experts of the Hamburg-based private bank Berenberg come to the same conclusion. The price target remains at EUR 24, and the rating remains at "buy". The current share price is EUR 19.90.
Viromed Medical AG - Promising sales start
The foundation for a successful stock market future has been laid. With the registration of the resolutions of the extraordinary general meeting of the sales company of the Viromed Group, which at that time still operated as Fonterelli SPAC 2 AG, Viromed Medical GmbH was brought in as a contribution in kind. The Company's new name, which is listed in Düsseldorf and on the open market, is Viromed Medical AG. A total of 20,250,000 shares were issued, which equates to a stock market value of EUR 101.25 million.
The valuation appears reasonable, with 2021 sales at EUR 133.60 million and after-tax earnings at EUR 24.9 million. Moreover, with regard to the product pipeline, sales should be able to be lifted significantly in the near future. In recent years, self-tests against the SARS-CoV-2 virus were the best-selling products, generating sales of 100 million units alone, and 4,000 units of the VitaLab rapid analysis device were in continuous use.
The management now has high hopes for the anti-viral nasal spray VirX, which successfully contributed to the fight against the Corona pandemic in Israel and eliminated the mandatory mask requirement there. Viromed Medical GmbH holds exclusive rights for the DACH region, and expansion to Europe is likely only a matter of time. Clinical studies - the phase 3 study has already been published in renowned specialist publications - show that in Corona-infected patients, 94% of the virus with the previously known variants disappeared within 24 hours and 99% after 48 hours after the use of the new VirX spray. A test sale of around 100,000 units via the Company's own sales platform and partner sites such as Amazon has already been carried out, and the nasal spray, which is said to cost around EUR 25, sold out quickly. The margin, which is said to be more than 50% of the sales price, is also high.
Given Viromed Medical AG's long-standing distribution network, sales in the seven-digit range should not be a utopia. The Company has a broad customer base in the DACH region, including various DAX companies such as Volkswagen and Lufthansa, German states and the Federal Ministry of Health, 1,100 hospitals, 7,000 pharmacies and 11,000 medical practices.
Another asset of the Pinneberg-based company is its innovative treatment methodology for wound healing using cold plasma technology. In Germany alone, the market for chronic wound healing is estimated at around EUR 12 billion, with annual growth of 4%. In this process, a mobile, CE-certified cold plasma device closes wounds painlessly and deactivates viruses, bacteria, germs and spores. Wounds heal five times faster in conjunction with cold plasma than with conventional methods, and chronic wounds close 85% of the time, the Company emphasizes. In addition to wound healing, other medical applications are also possible in the fields of cosmetics, dermatology and ENT.
In addition to rapid tests, which are also expected to be used actively in the Corona winter of 2022/2023, the newly launched VirX anti-viral nasal spray and the cold plasma treatment method promise significant growth potential. Around 68% of the share capital is in firm hands and is held by the Perbandt family of entrepreneurs. Fonterelli GmbH & Co KGaA from Munich, which facilitated the IPO via SPAC, also holds a significant share in the Company.
K+S - Debts to be eliminated
The Kassel-based company K+S reported record figures for the third quarter, almost doubling its sales in the third quarter to EUR 1.47 billion. At EUR 633 million, EBITDA more than quintupled compared with the prior-year quarter but was still below analysts' estimates. The world's fifth-largest potash producer remains confident for the year as a whole. Management expects the strong increase in the average price in the Agriculture customer segment will significantly exceed the expected cost increases, especially for energy, logistics and materials. In this context, sales are expected to amount to EUR 2.4 million.
The net financial position was expanded to EUR 152 million at the end of September. K+S intends to use this to further reduce its indebtedness through the partial repurchase of a bond and, thus, to be able to save interest. The bonds are to be purchased at face value plus accrued interest. The bond originally had a total volume of EUR 600 million with a coupon of 3.25%. Currently, around EUR 400 million is still outstanding. The acceptance period runs until the end of November.
The analyst firm Warburg Research raised its price target for K+S from EUR 29 to EUR 32 and left its rating at "buy". In contrast, analysts at UBS are "neutral" on the K+S share. After the figures, the price target was raised from EUR 21 to EUR 22.
Despite the negative forecasts and uncertainties in economics and geopolitics, the markets continue to run upward. Encavis and K+S were able to report strong quarterly figures. Viromed Medical AG, newly listed on the stock exchange, celebrated a successful sales launch of its Corona nasal spray, which offers high growth potential.
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