WideCells Group PLC (LON:WDC), the healthcare services company focused on providing stem cell services and ground-breaking insurance for stem cell treatment, has today announced that following the Group’s recent placing, Align Research has released an update note with a Conviction Buy stance.
The note covers the significant progress made by the Group in regulatory and commercial developments, overview of the rapidly growing stem cell market, use of funds from recently closed placing and Align’s forecasts for the Group’s future growth potential.
WideCells Group – Initiation of coverage
Stem cell services specialist set for rapid acceleration in revenues in a fast growing medical market
WideCells Group is a Main Market listed healthcare services company focused on growing in the burgeoning market for stem cell services. Over the past few years, management have built up an integrated stem cell services provider, focused on providing products which make stem cell treatments accessible and affordable.
Significant progress made in regulatory and commercial developments
Following significant progress made since IPO in July 2016 and the launch of several products, WideCells is now on the cusp of rapid revenue growth. Across three divisions the company can now offer an end-to-end service via the storage and processing of umbilical cord blood and tissue, stem cell insurance, stem cell research work and training and learning for healthcare professionals and the general public.
Stem cell markets growing rapidly
A 2017 report from Transparency Market Research suggests that the total global market for stem cells is expected to grow at a CAGR of 13.8% from 2017 to 2025 to become worth $270.5 billion by 2025.
Placing and bookbuild provide funds to accelerate growth
WideCells has finalised a £1.871 million placing, including a £164,951 debt conversion, bringing the aggregate value to the group of the placing to £2.036 million gross. Net proceeds receivable will be approximately £1.641 million. The funds will provide the company with general working capital and the firepower to accelerate product development and roll-out across its three divisions.
Indicative forecasts show huge growth potential
WideCells has huge potential for growth over the coming years. Applying a 20% tax charge to our FY2020 forecast operating profits would put the shares on a price/earnings multiple of just 1.1 times. Recognising the early stage nature of the business, but considering the very low valuation should indicative forecasts be met, we initiate coverage of WideCells with a stance of Conviction Buy and initial price target of 12p representing a conservative 5 times multiple for 2020 reflecting the risks involved.
RISK WARNING & DISCLAIMER
WideCells is a research client of Align Research. Align Research owns shares in WideCells. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.
