Biohit Oyj is a Finnish biotechnology company founded in 1988 that operates in global markets. Biohit’s headquarters are in Helsinki, with subsidiaries located in Italy and the United Kingdom. Biohit’s B-series shares (BIOBV) have been listed on the NASDAQ OMX Helsinki Oy Small Cap/Healthcare segment since 1999.
A list of products and what’s going on with Biohit. I can edit this list based on good suggestions, but here is something to start with “off the top of my head”:
Early gastric cancer screening centers have been opened in China. A new partner factory is also being completed in China to ensure sufficient capacity for screenings.
National screenings with Gastropanel have started in Russia:
My own vision is that this will become an excellent dividend machine in the future, as the turn to profitability is just arriving, margins are generally good, and scalability is high. The Chinese partner owns a large portion of Biohit’s shares (at a price of around 4.3 EUR), so the risk of a scam is relatively low in that regard.
It is also impossible to get precise information about the details of revenue recognition.
Two major owners, one of whom holds the voting power.
Previous promises and growth plans did not materialize (Chinese bureaucracy), so trust is weak. This is also reflected in the share price development, which has been very poor so far: -40.51% over 3 years.
GA’s listing in the US would mean a rise in valuation levels for Biohit, almost to the level of US e-commerce companies.
The sale of the Gastropanel product to Chinese companies would bring a very large one-time compensation. On the other hand, this should be avoided because Gastropanel will be a cash cow in the future.
No debt, operationally profitable, cash in hand, and owns a large share of GA (GA:n) shares. Screenings are starting in China and Russia. Market value a mere 55 million.
Biohit’s near future looks very bright, and to grasp the upside, it’s very sensible to compare it to Revenio.
Below is Revenio’s 2018
January-December 2018 in brief
Revenue was EUR 30.7 (26.8) million, an increase of 14.4% from the previous year.
Operating profit was EUR 10.2 (8.1) million, representing 33.3 (30.3)% of revenue, an increase of 25.7%.
Currency-adjusted organic growth of revenue was 14.9%, slightly stronger than reported growth.
Significant successful product launches: Icare ic200, asthma product Ventica, and mHome mobile application.
Sales in emerging markets of India and China grew clearly.
Nearly 18.5 million sensors were sold during the review period, which was over 23% more than the previous year.
Earnings per share, undiluted EUR 0.339 (0.288).
The Board of Directors proposes to the Annual General Meeting, which will convene on 20.3.2019, that a dividend of EUR 0.28 (0.26) per share be distributed.
Revenio made a profit of 10 million with 30 million in revenue. Biohit has slowly reached break-even with revenue grown to approximately 10 million. It also appears that when growth has been followed, half of the increased revenue begins to drop to the bottom line. When recommendations and initial screenings start to turn into money, I believe that in 2 years, Biohit’s financial statements could look very similar to Revenio’s 2018. Revenio’s share price at the time of the 2018 financial statements was around 15€, with a market value of approximately 400 million (after which the price doubled in a short time). If Biohit were valued at 30 million in revenue and 10 million in profit at the same 400 million, the share price would be around 26€. I do not consider this impossible at all.
There’s potential here, but promises have been broken quite a few times, and eyes have been shifted to the next year. Hopefully, after the financial statement, we won’t see another -30% on the board, but things will actually start moving in a more positive direction.
In previous years, there have been unfortunate delays due to, for example, Chinese bureaucracy. The approval of Gastropanel was delayed by a year, and the Chinese screenings started slower than expected, but now they are underway, as is the new ‘screening start’ (seulonta-aloitus) in Russia, both of which have evidence online, but which Biohit cannot comment on yet.
Acetium products have also been painfully slow to generate revenue, not least because Biohit is an ethically operating company and does not market the capsule for hangovers, for which many have found them helpful. Now Biohit has brought professionals on board to acquire partners for Imuace. The capsule already has partners all over the world.
The fact that ongoing operations are already in profit without those screenings is something that has not been the case before, and even now the result in the previous interim report was negative only because of this: “In 2017, we activated a patent related to the sale of Biohit Healthcare (Hefei) Co. Ltd. worth EUR 7.1 million, which we will depreciate by approximately EUR 1.5 million per year until the end of 2021.”
Biohit was my first investment back in the day. I threw money down the drain without understanding anything. Should I read a couple of press releases and reports from the company after years of hiatus? Even just for nostalgic reasons.
My biggest losses have been with Biohit, so yes, I’ve had to put emotions aside and look at the situation realistically. Fortunately, future profits are tax-free precisely because of the hit when I sold it last year between 3 and 2.9 and bought it back between 2.5-2.09. I then sold those at a profit for tax benefits (so that the losses wouldn’t expire), but I’ve still added throughout the rise, and even today I added 10%.
Now, the revenue is starting to be enough that the riskiness of the stock has decreased. The company’s name and products are involved in such big schemes now that this is still one possible tenbagger. Even if I’m involved with a small position, I just have to be in it.
The company’s communication was so poor, and it was so hard to dig up information, that I decided to jump ship with a small profit. Hopefully, the future is bright anyway.
Yeah, I agree. The product family seems promising, but investor communications and relations are on the level of a hot dog stand and sweatpants. I’ve lost enough money years ago with this dynamic group. I’ll stay away but thumbs up (not to them) to those who still believe.
This stock has been interesting to follow; the business seems to be moving in the right direction, but things are progressing much slower than many investors expect. The fact that the company is still debt-free is a commendable achievement, considering how many years it has taken to get Gastropanel, Acetium, and other products out to the world and into public awareness. I also expect that the positive momentum (large projects globally, e.g., Gastro Panel / Asia) will start to show in the 2020 results. I believe the Acetium lozenge for quitting smoking has reached a mature point in the market, where governments are trying to influence people to quit smoking. Selling the rights to this Acetium lozenge at some point could be a profitable one-time gain!
The first month of the year is behind us and 24% on the board, not bad after a strong autumn rally. As the fundamentals start to show in the numbers, the rally will also find its footing. The stock is very volatile, so it’s wise to keep your seatbelt on because big movements on small trading volumes are the new normal in both directions. The volume was quite small today, so let’s hope it grows, which will smooth out the jumps and the price will start to reflect the market price. The weekend and China’s opening on Monday are a bit concerning. Then we’ll see if demand is strong or if sentiment overcomes the frenzy.
Make 2020 the year to quit smoking properly, for good! Studies have shown that with Acetium, you could be free from cigarettes & nicotine addiction in 3 - 6 months. #acetium#quitsmoking#nicotinefree
This image shows Biohit’s stomach health products in blue, and future screenings will also be based on these. More detailed information can be found in the image link
I wonder when Semi Korpela, CEO of Biohit, will be interviewed by Inderes. Both have given a thumbs up on the matter, so now we just wait. An opportune time would be sometime soon after the financial statement, but I don’t know if that’s possible on such short notice. It’s positive, however, that we’ll get a new perspective on operations and future assessment with expert questions, and if things go really well, Semi will take up my suggestion that Inderes start following the company now that it’s on the brink of a turnaround.
I haven’t really loaded up on expectations as the stock price has been falling for the past couple of weeks and the financial statements are due in three days. This week, I’ve been able to calmly add to my position and only once when a suitable opportunity presented itself. We could, for once, open up the outlook a bit more precisely, but judging by the stock price, that’s wishful thinking.
Now would be a good time to adjust the mood, as a lot of disappointment has already been priced into the financial statement, given that the share price has fallen from EUR 4.2 to EUR 3.6 in February, which is about 15%. I try to keep in mind that Hefei bought itself as the largest owner for EUR 4.26 a couple of years ago, and since then, a lot of positive news has emerged.
This is indeed a long slip. I believe Russia will see tender wins this year, as the federation recommends using a gastropanel for screenings. It’s a shame that a better view than ‘revenue will grow’ isn’t dared to be taken.
