Myhealthchecked Plc

Myhealthchecked Plc (LON: MHC) is a FTSE AIM All-Share women’s healthcare Company, which helps women with unexplained infertility to conceive. Its products are myLotus monitor (flagship product), Ovulation Test, Pregnancy Test and Fertility App. It was formerly known as Concepta Plc. It is also looking for a Covid-19 RNA test kit.

Rationale for Valuation – Expensive at GBX 3.50

• The Company is presently trading near the 52-week high and Price/Earnings, EV/EBITDA and Price/Cash Flow metrics are in the negative zone as compared to the industry multiples.
• In H1 FY20, the net margin and ROE were in the negative zone.
• The Company is planning to increase its equity allocation.
• The operating landscape remains highly volatile with the continuing uncertainty due to the Covid-19 pandemic.
• From the technical standpoint, 90-day RSI stood at ~60.77, which means the stock price could decline in the short term.

Key Risks

• The Company operates in a highly regulated landscape, and failure to comply could lead to a significant financial or reputational loss.
• Also, the overdependence on technology can lead to loss of data and significant service interruptions.
• The Company may face a loss of output due to disaster or disruptive event at the logistics facility or manufacturing facility.

Recent News

On 17 February 2021, the Company stated that it had received Advance Assurance from HM Revenue and Customs for the issued ordinary shares (under the Enterprise Investment Scheme), but it is eligible for relief when one of the conditions will fulfil (which is for the allotment of the 28,571,428 Conditional Subscription Shares).

On 29 January 2021, the Company has completed its placing off, and subscriptions for, in aggregate 194,285,714 new Ordinary Shares, with a raising of £3.4 million at an Issue Price of 1.75 pence per share.

Financial Highlights (for the six months ended 30 June 2020 (H1 FY20), as on 28 September 2020)

(Source: Company Website)

• The Company generated revenue of £12.7 thousand, with a loss for the period surged to £1.35 million (against the same period last year).
• On 30 June 2020, the cash balance stood at £1.35 million, which decreased from the corresponding period of the last year (H1 FY19: £1.5 million).
• In April 2020, it raised around £1.7 million net funds at a price of 0.8 pence per share.
• It made a commercial launch of MYLO® brand and reached more than 4,000 App downloads, with digital marketing campaigns.
• For App Dx development, the Company made an exclusive global licence agreement with Abingdon Health Limited.

One Year Share Price Chart

 (Source: Refinitiv, chart created by Kalkine Group)

Conclusion

Looking forward, the main focus of the Company is on accelerating UK sales growth, developing the next-generation product, expanding into new markets, and widening the portfolio. Myhealthchecked is a market-leading product and has a strong foundation in fertility tracking and pregnancy self-testing, which will help more and more women and couples through their fertility pathway. However, the near-term economic outlook stays unclear.  Moreover, the Covid-19 pandemic continued to create operational challenges while the global uncertainty remained over the supply chain distribution. In the future, the Company may face emerging headwinds and cost pressures. Further, the prolonged impact of the COVID-19 outbreak continued to affect its financial results, plans, operations, outlook, goals, reputation, liquidity and stock price. The stock made a 52-week low and high of GBX 0.60 and GBX 4.90, respectively.

Based on the factors as highlighted above, we believe the stock of Myhealthchecked Plc is looking “Expensive” at the current price of GBX 3.50 (as on 24 February 2021, before the market close at 10:11 AM GMT), with support from few catalysts needs to be evaluated at a later stage such as decent prospects of London market and improved investors sentiments.

Jangada Mines Plc

Jangada Mines Plc (LON: JAN) is a FTSE AIM All-Share Mining Company and is exploring and developing in North East Brasil, which focuses on the natural resource sector, including Vanadium, Titanium and Iron.

Rationale for Valuation – Expensive at GBX 9.20

• The Company has not reported the revenue from the last four years, which raises uncertainty regarding its earning potential.
• The Company’s profitability margins and Return on equity remained in the negative zone from the last four years.
• The Company’s EV/EBITDA, Price/Earnings and Price/Cash Flow multiples are in the negative zone.
• From the technical standpoint, 14-day RSI stood at ~64.13, which means the stock price could decline in the short term.

Key Risks

• The volatility in the commodity prices and uncertainty in demand can affect the business of Jangada Mines.
• Any disruption in the operations and production caused due to macroeconomic or political events can affect the business.
• The Company is exposed to financial risk, which includes lack of liquidity, weakness in the balance sheet, large tax payments and improper financial reporting.

Recent News

On 24 February 2021, the Company had sold 2 million shares in ValOre Metals at a price of CAD$0.30 per share, which provides JAN with gross proceeds of CAD$600 thousand.

On 19 February 2021, it raised £1.25 million via a placing of new Ordinary shares.

On 16 February 2021, the Company delivered a positive economic assessment for its Pitombeiras Vanadium Project, with USD 106.5 million of post-tax Net Present Value and CAPEX of USD 9.5 million.

Financial Highlights (for the year ended 30 June 2020 (H1 FY20), as on 30 October 2020)

(Source: Company Website)

• The Company has not reported its revenue in the current period, which raises uncertainty regarding its earning potential.
• The Company was a loss-making company and increased its loss from the previous year.
• On 30 September 2020, the Company had cash reserves of USD 912,441.

One Year Share Price Chart

 (Source: Refinitiv, chart created by Kalkine Group)

Conclusion

The Company will ramp up the activity at Pitombeiras, with increasing demand for clean energy materials such as vanadium. However, the Company is in the development stage and do not generate any revenue for the period. The Company’s operational performance was challenged by the Covid-19 outbreak and the collapse in rare earth metals.  The Company remains exposed to low prices for the products. JAN’s business is exposed to economic and market fluctuations, which may adversely affect the Company’s business and financial performance. The Company has also adopted several cost-cutting measures (until the crisis gets subside). The Group is presently trading near the 52-week high, raising doubts at the upside potential at the current price level. The stock made a 52-week low and high of GBX 0.90 and GBX 12.50, respectively.

Based on the current market dynamics and factors as discussed above, we believe that the Jangada Mines Plc stock is looking “Expensive” at the current price of GBX 9.20 (as on 24 February 2021, before the market close at 11:12 AM GMT).

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