3 ASX Companies that may have huge upside potential

Pro Medicus Limited, significantly increased its total addressable market

TEAM VEYE | 04 Feb 2021 

PME receives FDA clearance for Breast Density Algorithm
Leading health imaging company Pro Medicus Limited [ASX: PME] on 2 February 2021 announced that it had received FDA clearance for its Breast Density AI Algorithm. This was in addition to previously receiving CE clearance (Europe) and TGA clearance (Australia) paving the way for the company to market the algorithm across all three jurisdictions.

Highlights

  • First Artificial Intelligence (AI) algorithm developed by PME
  • Developed using PME’s unique end to end AI Accelerator solution
  • FDA clearance is in addition to previously received CE (Europe) and TGA (Australia) approvals
  • Paves the way for commercialisation in North America, Europe and Australia Opens up further research collaboration opportunities
(Chart source: TradingView)

PME signs A$40M – 7 year contract with Intermountain Healthcare

Pro Medicus Limited on 14 January 2021 announced that its wholly-owned U.S. subsidiary, Visage Imaging, Inc., had signed a 7-year contract with Salt Lake City based Intermountain Healthcare (“Intermountain”), the largest health system in the State of Utah. Intermountain also provides medical services in the states of Idaho and Nevada making it the largest healthcare provider in the Intermountain West region.

Highlights

  • PME signs 7-year, A$40M deal with Intermountain Healthcare
  • Intermountain is the largest healthcare provider in the Intermountain West (Utah, Idaho, Nevada)
  • Visage to replace legacy PACS and other specialty systems across their 24 hospitals and more than 200 clinics
  • Contract includes the Visage 7 Viewer and Visage 7 Open Archive
  • Visage 7 platform to be fully deployed in the public-cloud
  • Extends PME’s leading position in large, regional health systems
  • Transaction-based model with potential upside (Data Source – Company Reports)

Veye’s Take

Pro Medicus had developed the Breast Density algorithm using its own AI Accelerator platform which enabled it to significantly speed up every stage of the process from concept to FDA approval. This further provides PME with a fast-track mechanism to develop its own algorithms in the future and paves the way for further collaborations with the growing number of its research oriented clients. PME signing $40M – 7-year contract with Intermountain Healthcare is very important not only because of its size and scope but will also provide it with a material footprint in Intermountain West, previously an untapped region for the Company. This is its fifth major contract win in six months. The formation of “Bullish engulfing” on the price chart has taken the support at exactly the middle band of the Bollinger. The stock has maintained the upside move supported by MACD and RSI indicators

Nanosonics Limited (ASX: NAN)

TEAM VEYE | 04 Feb 2021 (ASX | NAN)

The company Nanosonics Ltd (ASX: NAN) is an Australia-based company focused on developing automated disinfection technology. The Company’s principal activities include manufacturing and distribution of the trophon ultrasound probe disinfector and its associated consumables and accessories and research, development and commercialization of infection control and decontamination products and related technologies

(Chart source: TradingView)

On 24 November 2020, the company had its AGM Highlights:

  • In the first three quarters of the year, strong growth was experienced with total revenue increasing 26% on prior corresponding period. o Q4 Revenue of $25.3 million was essentially flat compared to prior corresponding period driven largely by the expected implications of the COVID-19 pandemic with very limited hospital access and a reduction in a range of healthcare procedures during this period.
  • Total revenue was up by 19% to $100.1m in FY20 from$84.3m in FY19
  • In the first three quarters of the year, the growth in installed base in North America was in line with expectations (i.e. similar to FY19). During that period, the number of new units installed in Europe and the Middle East was up 37% and up 56% in the Asia Pacific compared with the prior corresponding period.
  • Installed base growth was impacted in Q4 due to COVID-19 pandemic restrictions with the number of units down 46% compared to the prior corresponding period. 
  • Global installed base grew by 13% to23720 in FY20 from20930 in FY19.
 
(Graphic Source – Company Reports)
  • Substantial investments were made for new product development with important milestones met throughout the year towards the product expansion goals.
  • R&D investments increased by 37% to $15.6m in FY20 as compared to $11.4min FY19
  • Cash and cash equivalents were up by $19.6 million to $91.8 in FY20 as compared to $72.2m in FY19 million. The increment in cash and cash equivalents supports the on-going growth and expansion.
  • Consumables service revenue grew to$70.1m in FY20 from $51.5m in FY19.
  • In the first three quarters of the year, revenue was up 39% on the prior corresponding period. In Q4, a reduction in the volume of ultrasound procedures was experienced due to COVID-19 restrictions. Despite this reduction in ultrasound procedures, consumables and service revenue grew 29% in Q4 compared to the prior corresponding period.
  • Free cash flow for the year was $20.9 million compared with $2.6 million in the prior corresponding period, driven by increased receipts from customers.
  • Operating expenses were up by 28% to $63.2m in FY20 as compared to $49.2m in FY19
  • As a consequence of the planned increase in investment in growth, as well as the impacts of COVID-19 on Q4 revenue, operating profit before tax was $12.4m compared with $16.8 million in the prior corresponding period. (Data Source – Company Reports)   

Veye’s Take

Nanosonics is in a strong position, both from a capability perspective as well as a financial perspective, to continue to invest strongly in its growth. The business has positive free cash flow and at the end of June, the business had a strong balance sheet allowing it to make on-going investments. The stock showed good upside movement with minor dips. The stock took the support of the middle band of the Bollinger. The formation of the “Bullish engulfing” is well supported by RSI and positive crossover of MACD.

Bannerman Resources Limited (ASX: BMN)

TEAM VEYE | 04 Feb 2021 ASX | BMN

Etango-8 PFS on track

Bannerman Resources Limited (ASX: BMN, OTCQB: BNNLF, NSX: BMN) (Bannerman or the Company) on 9 November 2020 provided an update on the progress of its Pre-Feasibility Study (PFS) for the 8Mtpa development of its flagship Etango Uranium Project in Namibia (Etango-8).

 
(Chart source: TradingView)

Highlights

  • Etango-8 PFS workstreams proceeding to plan
  • Scoping Study demonstrated the strong technical and economic viability of conventional open pit mining and heap leach processing of the Etango deposit at 8Mtpa throughput1
  • Etango-8 provides an alternative, streamlined development model to the 20Mtpa development of Etango assessed to Definitive Feasibility Study level in 20152
  • High quality consultants engaged to complete the PFS including:
  • Wood plc appointed for processing plant design
  • Qubeka Mining Consultants appointed for mining studies
  • PFS benefits from vast body of technical work previously undertaken at Etango to a definitive level; all resource drilling, geotechnical, metallurgical and environmental work already complete
  • Completion of the PFS is expected during the June 2021 quarter
  • Estimated PFS cost is approx. $1.0M; fully funded from existing cash balance of $3.7M (at 30 September 2020)
 
(Graphic Source – Company Reports)

Bannerman Resources Limited on 29 October 2020 advised on a transformative quarter in which Bannerman released a Scoping Study for an 8Mtpa development of its flagship Etango Uranium Project in Namibia (Etango-8 Project).

Highlights

  • Etango-8 Project Scoping Study released on 5 August 2020 (key outcomes on page 2) o Provides an alternate, streamlined development model o Longterm scalability of Etango Project provides strong optionality and leverage to the upside-case uranium market
  • Pre-Feasibility Study (PFS) underway with completion targeted for Q2 2021 o Vast body of previous technical work enables fast-tracking o All resource drilling, metallurgical and environmental work already complete
  • Strong cash balance of $3.7m at quarter-end
  • Uranium market muted despite supply disruption in 2020 and supply depletion from 2021 (Data Source – Company Reports)

Veye’s Take

Bannerman had commenced an evaluation of various Etango Project scaling and scope opportunities under a range of potential development parameters and market conditions. Indicative outcomes of this work highlighted strong potential for a scaled-down initial development of the Etango Project. It commenced working on the Etango-8 PFS during the September 2020 quarter and all PFS workstreams were proceeding to plan. PFS completion is scheduled for the June 2021 quarter. The stock has become quite bullish on both short and long-term charts although some consolidation/retracement could not be ruled out. If it crosses the hurdle at $0.095, it can have the potential of accelerated momentum and giving significant returns in the long term.

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