Intellego Technologies AB

Stocks
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Let’s open a new thread for this relatively fresh listed company from our western neighbor.

The company was founded in 2011 and operates with photochromic (photocromic?) indicators. The listing took place in the summer 2021 hype on Stockholm’s First North.

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The company’s operations are divided into 3 segments:

Intellego Healthcare

UV Assure

Smartsun bands

If you can manage the other domestic language (Swedish), @Kalqyl, known from Twitter, has done an analysis of the company. In my opinion, this excellently explains the company and its industry. The analysis is from summer 2023.
It can be found here: https://intellego-technologies.com/wp-content/uploads/2023/04/Intellego-Technologies-Initial-take.pdf

Latest reports
2023
Q4: https://storage.mfn.se/9d434df8-5273-4b6c-9248-6151a26459e8/intellego-company-report-2023-q4-21-02-2024-final-version.pdf
Q3: https://storage.mfn.se/cfab46d5-748f-41c9-926d-5e71173ec8e8/intellego-technology-delarsrapport-1-juli-31-sept-2023.pdf
Q2: https://storage.mfn.se/32cb1faf-3d9d-4984-939c-f86aaf1fdd4b/intellego-q2-2023-final.pdf
Q1: https://storage.mfn.se/381a78c0-7de7-4317-b363-8a09bcc68804/intellego-q1-2023-final.pdf

2022 Annual Report: https://storage.mfn.se/15932b70-db6b-4a4c-ad4d-f4cec98930c8/intellego-arsredovisning-2022-04-20-final.pdf

2021
Q4: https://storage.mfn.se/3c9dacda-1530-412b-bf8f-a5ffb349a3d5/intellego-rapport-q4-220224.pdf

E: I will update the opening post, but hopefully, this rough opening will spark some discussion.

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Thanks @jaska7 for bringing this up. It looks really promising to me. I need to do some more thorough research over time. I had to FOMO into this, though, and bought 500 shares for my portfolio at 26.85 SEK since it seems to be moving quite briskly. Based on last year’s results, the valuation is ridiculously cheap for a company growing this fast. And it doesn’t even need to grow much to still look cheap (as long as they don’t print too many shares). I wonder what kind of bombs (surprises) might still lie ahead? Whatever happens, it’s at my own risk, of course. Usually, I do more thorough research before buying, but this time I made an exception.

I found a few concerns while studying the report.
The number of shares has increased by 6.6 million in a year, i.e., +33.5% (Number of shares average 26,305,282 vs 19,702,660). That’s a shocking amount of new shares in a year. Does Jaska know if these are related to an acquisition or are they incentive bonuses?
Also, when I was calculating those incentive bonuses, it looks like maybe another couple of million additional shares could be coming at most. If I understood correctly, the recipients pay for these themselves, so they wouldn’t be completely free. Let’s hope for a more moderate policy in the future.

Cash flow was in the red, but as the company is growing, it wasn’t very surprising. Accounts receivable have risen significantly, which also doesn’t sound strange during growth, but of course, it easily gives off some Tecnotree vibes if receivables rise. However, the report mentions:

Receivables continue to be paid according to plan and, as Intellego grows, we are shortening payment
times for our customers. Intellego does not currently have any past due receivables. In 2024, the
Intellego group expects receivables to stabilise at around 25-35% of annual revenue.

So, in my opinion, it’s not a red flag, but maybe something that needs to be monitored. Let’s believe everything is fine with the receivables until proven otherwise.

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Quick reply, as I’ve looked into the company enough previously to recall that a completed acquisition is being paid for with business income and new shares. If I remember correctly, the total impact is around 50 MSEK to fully settle the deal. This is just from memory, so please correct and provide more detail.

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Here is a link to the Discord discussion in Swedish Intellego Technologies

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Here are those stock options from Discord. The number of shares will increase somewhat.

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Intellego is indeed a listed company that is a couple of years old and has grown rapidly. There have also been inaccuracies in stock exchange releases, which Dagens Industri, among others, wrote about last year. Due to these, the share price plunged last summer. You can find those Dagens Industri news stories at the link.

Accounts receivable have grown significantly and must be monitored going forward.

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The company has already released preliminary information regarding its Q1 figures.

“Intellego Technologies announces a significant financial milestone as its Q1 revenue exceeds 70 million SEK (43) with an expected EBIT above 32 million SEK. This achievement underscores the company’s robust sales strategy and the strong market acceptance of its product offerings.”

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In my opinion, this points to an outrageously cheap valuation, given that the enterprise value is around 785 MSEK and there is a small hint that 32 MSEK in EBIT was already achieved in Q1. 785M/32M → EV/EBIT 24.5 even if they were to make zero EBIT for the rest of the year :money_mouth_face:
This could be a potential ten-bagger imo, but time will tell.

For example, Kempower’s full-year forecast has an EV/EBIT of 33.2.

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One interesting partner/customer of Intellego is HAI Solutions, a US startup with its own patented needleless IV port. The plan is to integrate Intellego’s indicators into it, allowing for monitoring to ensure that bacteria do not enter the bloodstream. HAI Solutions’ FDA approval process is currently underway. The market appears to be large.

In the press release, the value of deliveries over a 9-year period was estimated at 1.5–4.0 billion SEK. The FDA approval was supposed to arrive at the end of last year but has apparently been delayed.

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Here are Intellego’s deals and partnership agreements taken from Discord. A lot of sales and partnership agreements have been achieved in two years.
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On the Placera discussion forum, some are still skeptical towards Intellego

A few quite valid points, such as the lack of a CFO and issues with board members.

Personally, I’m confident. They agreed on a 40 mSEK loan in February, which included detailed due diligence.

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A couple of other news items on LinkedIn as well. A patent granted in the UK, and they released a dosimeter operating at a 395 nm wavelength. This is particularly for the plastics and automotive industries when precise monitoring of UV curing is required.

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Intellego ja asiakas saaneet aikaan positiivisen selvityksen UV -kovettumis -markkinoista. Discord huhutaan että asiakas olisi Saksalainen Henkel jolla myyntiä yli 160 maassa. Näyttää ihan hyvältä.

On January 26, 2024, Intellego announced that it and one of its curing partners — a leading global multinational —were conducting a global market evaluation for a category of Intellego’s curing dosimeters.
This evaluation has now been concluded, and the results are positive. This means that the global launch of Intellego’s new curing dosimeters and app is now being planned. Intellego and its as yet unnamed partner will engage further in contractual discussions to expand their existing agreement to include global, exclusive market rights for certain products and applications in the curing industry.

Exactly when these discussions might result in a newly signed agreement can not be said now.

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Deloitte has named Intellego as Sweden’s fastest-growing company.

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Intellego has also made a small acquisition. It has bought the British company UV-light Technology.

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Tuli hankittua eilen seurantapositio, joten tässä tämän päivän osari.

Summary of the period 1 January to 31 March 2024

  • Net sales was TSEK 79 609 (42 869)
  • Cash flow from operating activities was TSEK 34 093 (-16 325)
  • Profit after financial items was TSEK 38 948 (15 176)
  • Profit after tax was TSEK 35 667 (13 887)
  • Earnings per share, before dilution, were TSEK 1,35 (0,59)

“Approximately 70% of the group revenue in Q1 came from reoccurring customers”

:astonished: :exploding_head: Osakkeen hinta 30sek tasolla, joten jos tulos pysyy muina kvartaaleina vähintään samalla tasolla niin tämän vuoden P/E on jossain alle 6.

Joku pieni yritysosto tehty, mutta vaikuttaa suorastaan naurettavan halvalla ostetulta :thinking:

“in Q1, Daro made a small acquisition of UV Light Technology Limited which will accelerate the business across the UV spectrum including UVC disinfection and sales of relevant equipment together with dosimeters. UV Light Technology contributed 45,000 GBP in revenue during Q1 (March only). Its agreed purchase price was 437 500 GBP. The actual payment made was 496 902,81 GBP once all adjustments were agreed and accounting to the cash in the business and UV Light Technology had annual revenue of approximately 510 000 GBP in 2023 and made a profit of 82 500 GBP. The intention with this acquisition is to accelerate growth in the group. Daro sees significant opportunities to increase both revenue and profit in UV Light Technology.”

Näkymät ennallaan

“Growth is expected to continue in 2024 and Intellego and Daro see several attractive expansion possibilities which we are keen to capitalise on, both organically and through acquisitions, using existing sources of funds. The year continues to develop well for the group and market interest continues to grow, which is evident from the increasing, larger commercial discussions the group
has with customers. The Intellego group continues to grow into a global company, and we are investing heavily in that growth. This will be our focus for the foreseeable future. As a sign of this, we have previously communicated 2024 financial goals for the group of over 300 million SEK in revenue and over 110 million SEK in EBIT, which we hereby reaffirm.”

Ja uusi CFO saatu, joten sekin epävarmuus poistunut.

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Inderesin kahvihuone (Osa 8)
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Good interim report. Accounts receivable increased by 115 million SEK, but 55 million SEK was collected during Q1, which is quite a good achievement. 70% of revenue indeed from existing customers, which is very good.

An interesting sentence in the CEO’s statement that Intellego is considering a listing on Nasdaq or some other market (up-listing). Currently, Intellego is on First North Sweden. This could increase share liquidity and interest from funds. A CFO was also hired.

The agreement on the UV curing side is also progressing; Intellego has been invited to start contract negotiations as a global supplier. According to Discord, this customer is possibly Henkel, whose global revenue is 22 billion euros—a very large company. This is very positive.

It will be an interesting year. An interesting detail according to Discord: the number of Intellego shareholders on the Avanza service has grown from about 1,600 last year to 3,600 this year. So there’s interest in Sweden too.

Bad news. The auditor auditing Intellego’s accounts has also received a warning from the supervisory authority. Apparently for the second time. This is not related to Intellego or Intellego’s accounts specifically; they just happen to audit Intellego’s accounts as well. I wouldn’t be surprised at all if the auditor were changed at some point.

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Boldly borrowed octanalytics graph of Intellego’s development.

On the Placera forum, there is speculation about a “small” share issue after the annual general meeting to secure growth investments.

The second installment of the Daro acquisition price, 1.25 million GBP, is due for payment by Intellego at the end of August. This has been announced to be paid from Intellego’s cash flow. Originally, this was intended to be paid in January but was postponed by mutual agreement. The sellers of Daro are significant shareholders in Intellego.

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Here are the quarterly key figures from the Börsdata terminal. The margins look good
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The number of shareholders at Avanza and Nordnet is growing slowly. The previous figures were Nordnet 630 and Avanza 3,258 a couple of weeks ago.

avanza nordet owners may 2024

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