ALCIDION GROUP LIMITED (ASX:ALC) - ALC - Valuation Overview, 20932181, page-2 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by Wise_One ↑

In the interests of all the new shareholders that are being attracted to ALC - i'll repost a valuation summary I put together last week which illustrates the sector & its peers both locally & internationally.

Many have asked me, why / how I come up with the values for these specs as I do... this will go a long way in answering it for ALC.

Let's look at ALC & more specifically its peers (why not start with some of the peers mentioned in the MF article yesterday - being PME, NAN & also look at an off-shore company - OneView Healthcare PLC). I would also encourage you all to look at the domestic 3-year price charts!

PME
- Mkt Cap 500m
- P/E 76.45
- P/S 17.71
- 3 yr low - 66c; 3 yr high $6.60

NAN
- Mkt Cap 1B
- P/E 142
- P/S 21.36
- 3 yr low - 73c; 3 yr high $3.60

Oneview Healthcare PLC
- Mkt Cap 250m
- P/E large (earnings negative)
- P/S 72

Note these 3 comparisons, 2 domestic & 1 international are all at more advanced stages in their commercialisation strategies, but not by as much as you would think.

The domestic players are trading at c. 20x sales with extremely large PE's and this is the sort of valuation we can expect for ALC once additional contracts roll in the door. I have said previously that each new contract we win, will be worth 20x its revenue in mkt cap - this is how I have come up with this number.

So - if we win a $2m contract, that is worth $40m in mkt cap (being 6.5cps).

Similarly, the PEs of these companies are extremely large given the enormous future growth potentials which are industry specific & we have discussed these at great lengths previously.

Looking at PME - which IMO is our closest domestically listed comparable company - they only have a T/O of 27m (up from 17m in 2015). We could easily replicate this performance as we are on a strikingly similar trajectory.

If we nail the commercialisation & build revenues to this level over the next 12-18 months, we could also warrant a mkt cap of 500m (same as PME's) which would equate to a share price of a staggering 83 cents!!!!

This is why I am so bullish about this company & am not overly fussed about pips here & there.

The industry has a long way to go to digitise their hospitals & ALC is again in the right place at the right time. Market participants are starting to take notice and we are beginning the re-rating which we deserve. All our peers are worth far more than ourselves with gives us more scope to shoot higher.

When the likes of Sky News, YMYC, Motley Fool etc... start to talk / write about ALC, you know the message is starting to creep out. This will do wonders in the re-rate.

Every savvy investor is looking for market mis-pricing for whichever reason - we have it due to a lack of share market awareness of the stock.

Remember the key valuation metric here is 20x sales... Q1FY17 had 1.385m in sales (annualised is 5.54m) which = valuation of 110.8m (or 18.5 cents per share) on current run-rate!

New contracts add 20x sales to the valuation!

Bring on those new contracts & re-rate at 20x sales value accordingly!

Expand

Well done Wiseone

I agree with your share price forecast over the coming 12-18 months. In regards to the number of sales. I believe Alcidion is targeting 40 sites in the next 12 months, before entering the Canada & U.S Market in early 2018.

Based on a hypothetical sale price of $500k per site (ie. Similar to NT), this supports your forecast of 80 cents.

The unknowns that remain are the news flow of the contract wins and potential value of each contract. If we can get some big contract wins in the next couple of months this will run hard.

No.	Vol.	Price($)
1	116190	5.1¢

No.

Vol.

Price($)

116190

5.1¢

Price($)	Vol.	No.
5.3¢	120000	1

Price($)

Vol.

No.

5.3¢

120000

No.	Vol.	Price($)
1	120000	0.050
1	4166	0.049
3	404000	0.048
2	91297	0.047
2	600000	0.046

No.

Vol.

Price($)

120000

0.050

4166

0.049

404000

0.048

91297

0.047

600000

0.046

Price($)	Vol.	No.
0.053	120000	1
0.055	281145	6
0.056	53500	1
0.058	86744	2
0.059	169500	1

Price($)

Vol.

No.

0.053

120000

0.055

281145

0.056

53500

0.058

86744

0.059

169500

(20min delay)
Last 5.1¢		Change 0.001(2.00%)		Mkt cap ! $68.46M

Open	High	Low	Value	Volume
5.1¢	5.2¢	5.0¢	$25.90K	512.7K

Well done Wiseone I agree with your share price forecast over...

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