Oncimmune Holdings PLC

Oncimmune Holdings PLC (LON: ONC) is an FTSE AIM All-Share listed Company that develops immunodiagnostics, focusing on immuno-oncology, infectious diseases, and autoimmune disease.

Investment Rationale – SELL at GBX 140.00

• Weak Fundamentals: During H1 FY22, there was a significant decline in revenue and gross profit. Moreover, the losses worsened against H1 FY21.
• Reduction in Liquidity: At the end of H1 FY22, the Company held a gross cash balance of £2.97 million (H1 2021: £3.28 million), following the increase in administrative expenses and R&D expenses.
• Loss-Making Entity: The Company has a history of operating losses, which can take some time to be profitable amid the rising level of supply chain disruption and market inflation.
• Macroeconomic Risk: The Russian invasion in Ukraine has already jolted the market, while the slow retail growth and battered consumer spending in the UK amid rising fuel costs can keep the equity market under pressure.
• Gloomy Outlook: The year 2022 is expected to be the year of inflation, Central Bank tightening, and wage pressure. All these factors can hurt the corporate profits and equity markets.
• Technical Indicators: From a technical standpoint, the current market price is approaching the upper Bollinger Band and face retracement from the current level.
• Underperformance Against Index: ONC’s stock has fallen over 32% in the past six months, showing significant underperformance against the FTSE AIM All-Share index.

Share Price Chart

 (Data Source: REFINITIV, analysis done by Kalkine Group)

Valuation Methodology: EV/Sales Approach (FY22) (Illustrative)

*Peers: Genedrive PLC, Deltex Medical Group PLC, and EKF Diagnostics Holdings PLC.

*All selected peers are LSE-listed Companies from the Health Care sector.  

Conclusion

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. As ONC has given decent gains since our previous coverage, it is prudent to exit the position amid rising market uncertainties. The stock made a 52-week High and Low of GBX 261.63 and GBX 105.93, respectively.

Based on the weak production update, subdued market sentiments, and unfavorable valuation conducted above, we have given a “SELL” recommendation on Oncimmune Holdings PLC at the current market price of GBX 140.00 (as of 4 March 2022, at 8:30 AM GMT).  

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Note 3: Dividend Yield may vary as per the stock price movement.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios. 

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.