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20.5¢ resapp health limited

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20/04/18

14:49

Post #: 32588704
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Originally posted by barry1990 ↑

agreed, weak volume means nothing... big news is expected this Q
whether this goes up or down in the short term (i.e. two months) doesn't bother me - if it gets lower i will buy, why? the sheer numbers and market is mind blowing, if they can get results greater then 70% then they should receive FDA approve within 60-90 days from submission. They have had previously of 80%/90%+ if recordings are good cant see why it should vary.

Telehealth market in the US - estimated telehealth visits is circa 100m p.a. (conservative) and about 30% respiratory and growing at a rate of 50% p.a. (check the latest investor presentation)
so potentially 30m users p.a using the app - even if we only capture 50% of the market (remember the market is dominated by a small number of large telehealth companies) is potentially 15m users p.a. Resapp has stated US$5 to US$10 per use - lets go conservative and say AUD $5 is our Gross Profit is $75m GP costs at about conservative $25m gives us $50m profit x 30 (conservative) = market cap $1.5bn or $2.25 per share

Telehealth market China - one company has 370,000 users per day!!!! they report that 50% are respiratory related ... that alone is $67.5m users per year relating to telehealth. do the above and again the potential profit and market cap is easily in the billions

Now look at sleep side - resmed is valued at $17bn based on selling the machines - again massive potential

overall it is not hard to see that this company could one day be worth $3 to $5 (this is what BL had said to me as the possibility - assuming it all goes right - i have to agree)

the two major risks i see at the moment are:
1. does the algorithm work? all their data to date indicates that it does work - if this doesnt then very very worse case there will be a class action. IMO i believe the algorithm works - you dont sign up the best hospitals in the USA and get accurate results if its a lie.
2. are the recording accurate? I am happy to see all the control they have put in place, they have received some recordings and are very happy with them. I do not believe the recordings will be poor. They have too much riding on this.

There is always a risk but the reward IMO outweighs the risk, especially at this price.

Upside if they can get accurate results, get FDA and secure telehealth partners is $3+
downside is back to 5c or loose all your money - this isnt a stock to bet your life savings, but it could be one of those rare stocks that can create life changing rewards. I am rolling the dice and i am sure many here are too.

will just have to wait and see what the results are - fairly binary outcome

other outcome to consider is a takeover offer, how much of a competitive advantage would you have if you are the only company with resapp - IMO they should not accept an offer. Imagine this in the hands of Apple or one large telehealth company... monopoly. Pretty scary when you think about it.

Reminds me of the guy who made Polio - had the opportunity to sell it for billions of dollars but instead didn't patient it and let the world have the formula, we now have basically wiped it out thank to him. That in the hands of one corporation will be like that recent pharma company (Horizon pharma?) who jacks up the prices of life saving drugs to make profit.

enjoy your weekend everyone!

Expand

I agree with most of what you have said here.
It it true that both the Respiratory and Sleep Apnoea markets are very large indeed, and growing
but the class action ideas seem a bit out there.

I would say that I think having such a good start with sleep apnoea will be a great potential risk reducer. Success in the sleep market alone could be worth many times the current market cap if successful.

And on top of that there are still other application that they are working on but cant yet talk about which could yield something in the future.

RAP Price at posting: 13.5¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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