Ready to Capitalize on Rapid Market Growth in Poland
ODI Pharma AB:s (”ODI Pharma” or the ”Company”) latest quarter was affected by import restrictions in Poland, which has been resolved after the quarters end, as the Polish government nearly doubled the import quota for medical cannabis for 2025, driven by rapidly growing demand. As ODI Pharma is the exclusive supply partner to one of the leading pharmaceutical brands in Poland, the Company is expected to capitalize on this rapidly increasing demand. With estimated net sales of SEK 96m by 2025/2026, and with an applied P/S multiple of 2.5x, a potential present value per share of SEK 12.3 (17.4) is derived in a Base scenario.
- Net Sales was Affected by Import Restrictions
ODI Pharma’s net sales amounted to SEK 0.1m (0.5) during Q1-24/25. Sales were affected by import restrictions set by the Polish government, where the import quota for medical cannabis in the country for 2024 were initially set at 6 tons, which was reached with several months left of the year, leading to that the polish government increased the estimated annual demand for cannabis, hence also the quota, by an additional 5.3 tons in October 2024. As the updated quota is expected to be applied from January 2025, ODI Pharma’s sales in Q1-24/25 as well as the upcoming Q2-24/25, is expected to be affected by the import restrictions. However, based on the rapid market growth, illustrated by the updated quota, and the fact that ODI Pharma acts as the supplier to one of the leading pharmaceutical brands in the country, we estimate strong revenue growth in the upcoming year.
- Rights Issue of SEK 4.1m to Leverage Market Potential
On October 30th, ODI Pharma announced that the Company intends to carry out a rights issue of SEK 4.1m before transaction costs. The net proceeds are expected to be used to strengthen the financial position through loan repayments, support continued expansion into new European markets, and further establish a strong presence in Poland. Based on a pre money valuation of SEK 49m, and the estimated sales growth ahead, based on a strong market growth in Poland and expansion to more countries, Analyst Group believes that the rights issue entails a great risk/reward for investors.
- Updated Valuation Range
Based on the Q1-24/25 report, where sales were affected by import restrictions, nevertheless below our expectations, we have updated our financial forecasts for ODI Pharma. Although import quotas have now been increased, the lower sales in the first quarter of the fiscal year, which is also expected for the upcoming quarter, still impact our full-year forecast. This also serves as a reminder of ODI Pharma’s dependence on government regulations, which, combined with the updated forecasts and the estimated additional outstanding shares following the rights issue, results in a revised valuation range.
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Samtliga analyser av bolag från och med år 2020 betygssätts utifrån ett nytt betygssystem - Värdedrivare, Historisk Lönsamhet och Ledning & Styrelse sträcker sig från 1 till 10, där 10 är högsta betyg. Riskprofil sträcker sig från 1 till 10, där 10 är att anse som högst risk. Aktieanalyser av bolag publicerade innan 2020 har betygssatts utifrån en annan modell.
