Tauren Investments has published an analytical study on Gemabank (IMCB, MOEX: GEMA).
IMCB is a member of the Artgen Biotech Group (MOEX: ABIO) and, under the Gemabank brand, offers personal storage of biomaterials, mainly hematopoietic stem cells. The company is also developing gene therapy drugs to treat blood and immune system diseases.
Gemabank’s market capitalization is RUB 1.9 billion. The company operates in the innovation sector, investors are exempt from paying personal income tax on incomes from the sale or redemption of the company’s securities if they have owned them for more than 1 year (the program has been extended until the end of 2027). In 2024, IMCB’s shares were split 1:10, making them more accessible to investors with small accounts. In July 2024, ACRA upgraded Gemabank’s credit rating to BBB-(RU), OUTLOOK - STABLE.
Gemabank consistently pays dividends several times a year. Total dividends for 2024 are expected to be from RUB 8 per share (yield of 6.3% of the share price as of 12/6/2024). In the first half of 2024, the company has already paid RUB 5 per share in dividends, another RUB 2.7 is to be paid for the 9 months of 2024.
Analysts noted that one of the key advantages of Gemabank’s business model is its extremely high profitability. At the end of 2023, the EBITDA margin was 55.9%. Even if the margin decreases slightly in the long term, it will not have a significant negative impact on the company.
Over the past 8 years, Gemabank has increased the number of samples by an average of 6.6% per year. Year 2024 saw accelerated growth: in 9 months of 2024, 33% more samples were accepted for storage than during the same period in 2023. Over 9 months of 2024, the company showed a revenue growth of 20.3% y/y, and this figure may well increase to RUB 352 million (+24% y/y) by the end of the year.
As of the end of the 3rd quarter of 2024, Gemabank stored 42,502 samples of hematopoietic cord blood stem cells. 62 samples were donated for transplantation (the demand is about 0.15%, which is much higher than in American and European banks).
Analysts estimated the fair price of Gemabank’s shares at about RUB 138.4 per share with growth potential of more than 9% from the current value. It was also noted that the company’s shares could well cost around RUB 145.6 if the market conditions are favorable, which implies growth potential of around 14.7% from the current value.
Tauren Investments analysts noted that the company’s shares have almost always been traded on the stock exchange with a forward multiple of P/E>10. Assuming that the company will also be traded in 2030, the terminal value will be around RUB 2.3 billion, which is 21% higher than the current market price. Moreover, the company distributes almost all of its net profit, ensuring a consistently high dividend flow to shareholders.