Scandinavian Medical Solutions A/S deals in medical imaging equipment worldwide. It offers equipment in the categories of CATH lab, CT, linear accelerator, mammography, PET/CT, SPECT/CT, X-ray, ultrasound, MRI, GAMMA/SPECT, C-arm, mobile X-ray, R/F, DEXA, and others, as well as provides CT, MRI, CATH lab, X-ray, MAMMO, PET/CT, and C-arm parts. The company also provides equipment rental and technical services. It serves hospitals, medical clinics, and distributors. The company was incorporated in 2018 and is based in Aalborg, Denmark.

Denmark

Scandinavian Medical Solutions A/S

Healthcare

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

SMSMED.CO reported revenue of DKK 227mn in the last 12 months, up 17% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 9% from FY23 to DKK 0.30.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 21ppts and its growth accelerated by 2ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 9.9% in the last 12 months, a decline from 10.0% in FY23. 

Historically, SMSMED.CO has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 3.4%, down from 6.4% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to 8.2%, below the peers. 

Scandinavian Medical Solutions A/S reported a return on equity (RoE) of 9.9% in the last 12 months, down from 10.5% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 4.6% in the last 12 months, a decrease from 4.7% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.0 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SMSMED.CO has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is minimal. We note resilient historical revenue growth, strong debt servicing capacity, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, poor working capital management.

In highly turbulent market conditions, SMSMED.CO is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, SMSMED.CO is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from large to notable. We would also like to highlight the notable intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is considerably underpriced compared to similar stocks. Specifically, the stock is 'cheap' on P/E, undervalued on EV/EBITD. 

Scandinavian Medical Solutions A/S

DKK 4.31

4

Scandinavian Medical Solutions A/S

DKK 4.31

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

DKK 4.31

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