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1. Company Snapshot

1.a. Company Description

MedCap AB (publ) is a private equity firm specializing in investments in secondary direct, later stage, industry consolidation, growth capital, middle market, mature, turnarounds, buyout.It prefers to invest in healthcare equipment and services, biotechnology, life sciences, and pharmaceuticals companies.The firm prefers to invest in small to medium size companies that are not listed on the stock exchange and are based in Northern Europe.


It typically invests between SEK25 million ($2.75 million) to SEK150 million ($16.51 million) with enterprise value and sales revenue between SEK50 million ($5.90 million) to SEK200 million ($23.06 million) and EBITDA between SEK1 million ($0.11 million) to SEK50 million ($5.50 million).The firm seeks to acquire stakes between 20% and 50% in its portfolio companies.It uses its capital and loans and makes balance sheet investments.


MedCap AB (publ) was founded in 2001 and is based in Stockholm, Sweden.

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1.b. Last Insights on MCAP

MedCap's recent performance has been negatively impacted by a decline in profit margin, dropping to 10% from 12.7% a year earlier. The company's earnings have turned negative over the most recent year, despite delivering average earnings growth of 25.9% per year over the past five years. A decrease in profitability, coupled with a significant forecasted revenue growth rate of 13.2% per year, raises concerns about the company's ability to maintain its growth trajectory. This profit margin drop challenges the bullish growth narrative surrounding MedCap.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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MedCap (OM:MCAP) Profit Margin Drop Challenges Bullish Growth Narrative

Oct -26

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.60%)

6. Segments

Aid

Expected Growth: 8%

Aid from MedCap AB (publ) with 8% growth driven by increasing demand for medical devices, strategic partnerships, and expansion into emerging markets. Additionally, investments in R&D, cost savings initiatives, and favorable regulatory environments contribute to the growth momentum.

Medical Technology

Expected Growth: 12%

MedCap AB's 12% growth in Medical Technology is driven by increasing demand for innovative medical devices, expanding healthcare infrastructure, and an aging population. Additionally, advancements in digital health, AI, and data analytics are fueling growth. Strategic partnerships, regulatory approvals, and investments in R&D are also contributing to the company's rapid expansion.

Specialist Medicines

Expected Growth: 9%

Strong demand for rare disease treatments, increasing prevalence of chronic conditions, and strategic partnerships drive MedCap AB's 9% growth in Specialist Medicines. Additionally, investments in R&D, expansion into emerging markets, and favorable regulatory environments contribute to the segment's rapid expansion.

7. Detailed Products

Medical Imaging

MedCap AB provides medical imaging solutions for hospitals and clinics, offering a range of imaging modalities including MRI, CT, and X-ray.

Radiation Therapy

MedCap AB offers radiation therapy solutions for cancer treatment, providing advanced technology for precise and effective treatment.

Patient Monitoring

MedCap AB provides patient monitoring solutions for hospitals and clinics, enabling real-time monitoring of patient vital signs and medical data.

Medical IT Solutions

MedCap AB offers medical IT solutions for healthcare providers, including electronic health records, practice management, and revenue cycle management.

Medical Consulting

MedCap AB provides medical consulting services to healthcare providers, offering expertise in medical imaging, radiation therapy, and patient monitoring.

8. MedCap AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for MedCap AB (publ) is medium due to the presence of alternative medical devices and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for MedCap AB (publ) is low due to the specialized nature of medical devices and services, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers for MedCap AB (publ) is medium due to the presence of multiple suppliers of raw materials and components, but the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for MedCap AB (publ) is high due to the growing demand for medical devices and services, making it an attractive market for new entrants.

Intensity Of Rivalry

The intensity of rivalry for MedCap AB (publ) is high due to the presence of established competitors in the market, leading to a competitive pricing strategy and high marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 12.11%
Debt Cost 7.09%
Equity Weight 87.89%
Equity Cost 7.09%
WACC 7.09%
Leverage 13.78%

11. Quality Control: MedCap AB (publ) passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HBM Healthcare Investments

A-Score: 6.4/10

Value: 9.6

Growth: 3.8

Quality: 7.5

Yield: 5.6

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
MLP

A-Score: 5.7/10

Value: 4.8

Growth: 5.1

Quality: 3.1

Yield: 7.5

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Brooks Macdonald

A-Score: 5.5/10

Value: 4.2

Growth: 2.7

Quality: 7.5

Yield: 7.5

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
IP Group

A-Score: 4.6/10

Value: 9.8

Growth: 0.6

Quality: 7.2

Yield: 1.2

Momentum: 5.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
MedCap

A-Score: 4.4/10

Value: 1.1

Growth: 9.0

Quality: 7.6

Yield: 0.0

Momentum: 7.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Bellevue

A-Score: 4.0/10

Value: 4.4

Growth: 2.4

Quality: 6.1

Yield: 9.4

Momentum: 0.0

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

534.0$

Current Price

534$

Potential

-0.00%

Expected Cash-Flows