Original-Research: SYGNIS AG (von GBC AG): BUY

Original-Research: SYGNIS AG - von GBC AG

Einstufung von GBC AG zu SYGNIS AG

Unternehmen: SYGNIS AG

ISIN: DE000A1RFM03

Anlass der Studie: Research Note

Empfehlung: BUY

Kursziel: 3.70 EUR

Kursziel auf Sicht von: End FY 2017

Letzte Ratingänderung:

Analyst: Cosmin Filker; Felix Gode, CFA

SYGNIS AG is a life sciences company listed in the Prime Standard of the

German Stock Exchange (Deutsche Börse). The company focuses on the

development and marketing of innovative molecular biology technologies in

the NGS (next-generation sequencing) sector. SYGNIS AG has acquired

Expedeon Holdings Ltd. through a capital increase in kind. This expanded

the product range into the field of proteomics, the second most important

sector in the field of life science. Important synergy effects are arising

especially in the sales area, as Expedeon has a direct sales network in the

most important life sciences markets worldwide as USA, UK and Asia. After

acquiring Expedeon Holdings Ltd., a portion of the liquidity inflow

originating from the last capital increase was used for the acquisition of

the US electrophoresis supplier C.B.S. Scientific. C.B.S. Scientific acts

as a system provider in the field of electrophoresis and thus this

acquisition too is to be viewed as a horizontal extension of the product

range and thus the SYGNIS AG workflow.

The acquisition of Expedeon Holdings Ltd. will be crucial in determining

SYGNIS AG's future corporate development in our opinion. Consolidation of

both companies alone results in considerably higher levels of revenues and

profit, as is already apparent from the situation as at June 30, 2016. We

must bear in mind with this that Expedeon was only included in the past

reporting period from August 2016, i.e. for just two months. The positive

effects should be significant in the fourth quarter of 2016 and in

particular in the 2017 financial year, based solely on full inclusion of

the new company and the integration successes in the sales division at

SYGNIS AG. From the 2017 financial year, we have also taken into account

inorganic effects from the acquisition of C.B.S. Scientific. At an annual

revenue of USD 1.50 million (corresponding to EUR1.42 million), the

laboratory supplier represents a positive contribution to earnings and

liquidity.

According to statements from the company, a fall in the negative operating

result is expected initially as part of the revenue increases expected,

with the break-even point expected for the coming 2017 financial year at

quarterly level. Break-even at the level of the overall year is projected

for the 2018 financial year.

Aside from the typical effects of scale, our results forecasts also take

into account potential synergy effects against the background of the

consolidation of administrative structures and production capacities. The

intention for instance is for synergy effects to be leveraged from the

planned consolidation of production operations and manufacturing processes.

Production operations and manufacturing processes are due to be relocated

to the UK in the fourth quarter of 2016, which should result in further

optimization in terms of the cost structure. The company's future costs

should therefore be characterized by development in administrative

expenditures and in R&D costs that is disproportionately low compared with

revenues. By contrast, the sales and production costs should become

increasingly significant. The planned merger of the production sites of the

two US-based companies, Expedeon Inc. and C.B.S. Expedeon in San Diego, is

also to be viewed in this light. High profit margins are possible for the

future as a result of effects of scale and synergies. Long term we expect

an EBITDA margin amounting to 45.0%.

The fair value per share at the end of the 2017 financial year equates to a

target price of EUR3.70 (previously: EUR3.95). The reduction in the revenue

and results forecasts for the 2016 and 2017 financial years in particular

have the effect of reducing the target price. Based on the current share

price of EUR 1.66, we rate it a BUY.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/14713.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (4,5a,5b,6a,7,10,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung.htm

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