QT Vascular

QT Vascular: 2Q14 net loss widened by 46% to US$22.7m, while top line rose 262.2% to US$6.1m, mainly due to increased sales of its Chocolate PTA. Number of units sold jumped 4.7x to 8,321 units. Gross profit was US$0.2m vs. a gross loss of US$0.1m a year earlier. Nevertheless, bottom line was weighed by increased admin costs (inclusive of US$0.9m IPO fees), R&D costs, and interest costs. Despite losses, meaningful earnings are expected to kick-in in 2015-16 when the company passes this start-up stage. While CEO concedes there is risk that QT Vascular may see risks in maintaining investor support till then, some market pundits do not rule out the possibility that QTV may become a takeover target once its products gain traction. Meanwhile, management remains optimistic on growth in the size of post-65 year olds population across US, Europe, Japan and China, as Peripheral Artery Disease is more prevalent in population of that age group. QT Vascular is trading at 29x annualized 1H14 P/Sales. That said, valuations are not very meaningful at this moment.