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Skan: If they are no1 in the market and have so much repeat business, how come they barely make money: 2020: 4m CHF 2% margin, 2021: 10m 4% margin, All that for a company with 1.3bn mcap.

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Fair question. They actually have a high single digit operating margin, but a lot of that gets passed on to minority shareholders. Understanding just how much of/what subsidiaries the holders of the common stock have a claim to would be a very important thing to figure out. In 2021, it caused a 50% haircut to net income.

Yes, hsd operating margin isn't exceptional for a medtech company, but they are early in the growth cycle, machines still represent the bulk of sales (>80%).

It costs a lot to develop, manufacture and install the machines. Plus, the sales cycle from development to installation takes 3+ years. But that's fine because the repeat business comes in after in the form of consumables.

As long as growth in machines sold is high, margins may be unremarkable, but as soon as it slows, operating leverage should be strong.

The valuation is very high, which was acknowledged in the article, but that's because investors get really excited by these types of medtech stocks due to the consumables aspect.

Just look at stocks like Sartorius Stedim. You can see the potential & how margins improve over time pretty fast.

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