M7T (ASX) MTT and IME

Originally posted by StealthInvest: ↑

well since it’s a thread to debate IME comparative here are some thoughts.

firstly yes IME is clearly the cheapest on a revenue multiple basis. This is largely because the majority of the revenue is a few large contracts which don’t appear to have grown much the last 18 months

secondly with regards to mgt you will note the new chair as of March last year started by making a $500k investment (at $1.50 post 50/1 consolidation prices). And in the 9 months since him and the other directors have been buying on market in a regular and substantial manner I have very rarely seen. They have between them thrown another over $1/2m of their own money at on market shares with many of the purchases even higher than the current traded price. These are not incentives or gifts. They are buying this up left tights and centre so including the original placement over $1mfrom their own pockets like you can still buy on market today.

thirdly they have quietly over the last 18 months moved from being a South American based company to setting up all the groundwork for global distribution:
- obtained FDA approval
- set up US office
- set up Aus office
- CE approval and set up European office (Dec 20)
- signed global imaging partnership agreement with Vital group (multi bn part of Canon group and world leader in PACS imaging) for Aquila cloud on demand version

fourthly I don’t think a lot of people understand the product set. The original developed on prem Hiroko imaging was developed by South American radiology professionals to incorporate workflow and be viewable on any device. This has been targeted still to large hospitals etc with the any device viewing being a boy of a bonus. In a covid world being able to see imagines on an iPad for telehealth consulting has obvious benefits.

however their new Aquila on demand product is where the real growth is, and this was only launched 6 months ago. Based on the same technology and approvals it’s a very cheap ($20k per year) offering for small clinics which can’t afford expensive on prem large contract solutions like M7T and PME provide. From a standing start 6 months ago they have a pipeline of 175 sales and in Dec added $240k of ARR or a run rate of $3.5m ARR a year. They way they are accelerating this Saas offering leveraging their global network of 20 distributors I fully expect in 2021 they will add $5m ARR from it and in 2022 $10m. Their figures show 80% is US practitioners work from smaller clinics with no or poor direct access to imaging due to the cost of installing expensive on premise solutions.

now that’s ON TOP of the existing business which is cashed up after an $8m raise and forecasts to land $10-$12m revenue fod the full year (in upcoming qtrly we will see) over 90% will be from their larger on prem contract business which is still growing and predicted to also land some decent size contracts.

so my assessment is the Aquila business line growth is currently completely hidden to the market. A growing Saas business which is adding ARR and a runrate of $3.5m a year and accelerating month on month on its own would typically be valued higher and they have done this in 6 months. I use IHR as a comparison which has recently run to $150m market cap (now back to $100m) so worth 2-3x send they have taken nearly 3 years to get to $2.75m ARR. (pic below)

just an alternate view since you are having the discussion. I don’t own PME or M7T and I think they are already fair value (PME overvalue) for revenue and potential growth. I am substantially long IME and very confident it will multiple bag and catch up with M7T (5 bags) which is clearly what the directors of the business think as they have thrown over $1m of their own money at shares.

follow the money

good luck and have a nice day

Expand

Thanks for this post, really helpful

Can I ask, from what you’re saying, ime is potentially a non competing different market to pme/m7 in that they have a small clinic offering that aren’t being targeted by the other 2?

And this market being about 80% of clinics will result in smaller contracts, but a lot more of them compared to the other 2?

Obviously they’ll be a degree of grey area cross over, but as a generalisation does the above hold true?

Hence holding both ime and m7t will not necessarily be a hedge bet, but both could do brilliantly?

cheers.

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Last 68.5¢		Change 0.020(3.01%)		Mkt cap ! $165.2M

Open	High	Low	Value	Volume
67.0¢	68.5¢	67.0¢	$31.44K	46.41K


Last 68.0¢		Change 0.020 ( 0.74 %)
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Last updated 15.50pm 22/05/2024 ?

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