Despite the awful investor sentiment & macro gloom, there’s still plenty of opportunity for stock pickers and businesses, who wish to further enhance their competitive advantage.
Step forward Belluscura BELL , a specialist developer of portable oxygen concentrators (POCs) that are used to treat patients with acute respiratory conditions (eg COPD, pneumonia & long COVID).
Indeed, not only does BELL appear to be materially undervalued with the shares trading at 70p (mrkcap £80m) vs Dowgate’s 200p target price, alongside having net cash of $11.3m (Jun’22). But also, it has significantly accelerated the commercialisation of its next generation, medical devices, as detailed in this morning’s positive H1 results.
Here, it has significantly lifted production volumes, improved supply chain resilience & reduced unit costs - after signing a “transformational” agreement with one of the world’s largest contract manufacturers and in-sourced its US capacity.
Likewise, BELL continues to invest in its technological lead. Launching a “best in class” telemedicine enabled POC (X-PLOR) in June, with another world-beating device (re DISCOV-R) slated for Q1’23.
Elsewhere, its DTC and 3rd party distribution channels go from strength to strength. Further bolstered by today’s flagship partnership with a “leading US Durable Medical Equipment provider” and planned US TV advertising campaign starting in late Sept to further drive product awareness & brand recognition.
Whilst BELL has also completed important ISO 13485 audits ahead of schedule. In turn, more than doubling the TAM, as it branches out into Asia & Europe next year.
CEO Bob Rauker commenting:” We have considerably expanded our market by securing high quality production & distribution agreements, launching our DTC & innovative partnership programme, and expanding our routes to market, which we are now starting to support with a significant advertising campaign.”
Chairman Adam Reynolds adding: “The initial response from the market is hugely positive and, we expect substantial growth over the coming years.”
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Importantly demand remains strong with Belluscura being able to sell everything it manufactures, as reflected in the buoyant outlook & forecast jump in unit shipments to >500 in Q3 (vs Est 475 H1 & 377 FY’21), 1,000-3,000 for Q4’22, and 18,000 in FY’23 (Dowgate).
However, this should be just the start of things to come:
There are around 1bn people worldwide who suffer from chronic respiratory issues (Source WHO), with the global POC market set climb at 14% CAGR to $2.76bn by 2026. In fact, almost 100m people in China alone have COPD (400% higher than the US), on top of another 50m in India and 5m people in Japan.
Investors can therefore expect even more from BELL at the FY22 results, which is remarkable given the wider awful investor sentiment & macro gloom.