Bell Potter downgrade NAN to sell above $3

In contrast to the recent upgrade on NAN from Wilson, Bell Potter has downgraded NAN to a sell above $3.00. The Bell Potter report is dated 10/10/18 and can be accessed from the NAN website or via the following link: https://cdn2.hubspot.net/hubfs/2616865/Investor%20Centre%20-%20Annual%20Reports%20and%20Presentations/10.10.18%20-%20Bell%20Potter%20-%20Lack%20Lustre%20Earnings.pdf

For mine, the updated Bell Potter analyst report makes a lot of reasonable points, including the unsurprising and overarching assertion that NAN is overvalued at current prices.

Apart from revising downwards some of its own forecast revenue metrics for NAN over the next 3 years and putting more time padding into the delivery of revenues from as yet unspecified new product(s), Bell Potter makes the following comment that will upset the growth at all costs investors/posters and be supported by those investors/posters who have argued that the company's failure to pay any sort of dividend - no matter how modest - shows an unbalanced approach to capital management: "NAN has approximately $70m of cash most of whichappears excess to its needs, yet it continues to not pay a dividend – further justifyingthe Sell recommendation" .

Bell Potter's decision to extend the assumed time frame before new product(s) contribute to NAN's bottom line out to FY21 seems perfectly reasonable and to my mind is reinforced by the way in which NAN's discussion about new product(s) has been subtly pared back since August 2017 in both quantity and projected timeframe to market . At that time, both the Chairman and the CEO of NAN  stated an expectation in the 2017 Annual Report that a minimum of two new products would be launched over the next two years (perhaps not unreasonably assumed by mug punters like myself to be by August 2019). However, by February 2018, in the Half Year Financial Results, this expectation had been diluted by the CEO to: "targetingone or more new infection prevention solutions in FY20, subject to regulatoryapprovals". Then, in May 2018 at the Wilson Rapid Insights Conference, the CEO further diluted the expectation to: "nowtargeting one or more new infection prevention solutions by end of FY20,subject to regulatory approval".

Now, I don't wish to make too big a meal of all this but I would like to see NAN acknowledge adjustments it makes to previous statements of expectations. I would also like to see the company not only acknowledge and publicise guidelines which support the adoption of trophon, but also acknowledge guidelines which frustrate the adoption of trophon. A case in point concerns the company's quite detailed strategy to target surface probe activities for high level disinfection when such activities could be deemed semi-critical (as set out in the 2018 Half Year Results, Investor Presentation, 26 February 2018, page 25). Yet, barely 3 months later (June 2018), one of the key targetted activities - disinfection of ultrasound transducers used to guide insertion of vascular access devices - has been the subject of updated guidelines which explicitly rejects routine use of HLD when disinfecting ultrasound transducers used in such activities, but NAN has not seen fit to make any comment on the matter - seehttps://cdn.ymaws.com/www.avainfo.org/resource/resmgr/files/hldlld_final_formatted_2.pdf).

zeno9