Funding the opportunity in medical imaging
On 18 April Kromek announced a major seven-year agreement with a Tier 1 OEM to develop and incorporate its CZT-based detectors in the OEM’s advanced medical imaging scanners, and further deals have since followed. In order to fund these opportunities, on 5 May the Group announced a fund-raise of £8m (gross).It is our assumption that the Tier 1 OEM segment targeted is the CT scanner market. This was worth an estimated US$6.7bn in 2022 and, at a 5.6% CAGR, is expected to reach US$9.92bn by 2029. The market is in the process of transitioning to efficient and accurate processes based on cadmium zinc telluride (CZT) semiconductors.
Following the acquisition of Redlen Technologies Inc. in 2021 by Canon, Kromek remains the only commercial-scale independent source of this key CZT-based technology.
Given the market position of a Tier 1 OEM CT supplier and outlook for the CT market, we calculate that a collaboration in this field could exceed a cumulative £100m contribution to Kromek’s revenue by 2029. Additionally, we have revisited the Canon-Redlen acquisition; which would indicate a Kromek sum-of-parts valuation of between 56p and 84p per share.
Whilst awaiting further details of the Tier 1 and Tier 2 OEM agreements, we maintain our Fair Value at 26p/share for now.
Kromek Group is a developer of radiation detectors based on cadmium zinc telluride, providing detection and characterization capabilities within the medical imaging, nuclear detection and security screening markets. Co. designs, develops and produces x-ray and gamma-ray imaging and radiation detection products.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.