QT Vascular

QT Vascular (QTV): UOB Kay Hian initiated with a Buy rating with $0.51 TP (+36% upside), based on a 2015F p/S ratio of 10x, in line with completed medical device M&A deals since 2012. House notes the agreements with distributors Century Medical for Japan, Weihai Weigao Medical Devices for China and Cordis Corporation for the US and the rest of the world give QTV immediate access to potential end-user accounts. In the US, this grows the group’s contact network by at least 10x to over 1,500 hospital accounts. This works out to drive projected 176% 3-year sales CAGR. The agreements provide topline visibility as they set out minimum volume or projected sales target commitments to be fulfilled by the distributors. UOB Kay Hian expects the group to begin recognising gross profits in 2014 as it achieves scale.