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NetScientific — Clinical and commercial progress continues

NetScientific — Clinical and commercial progress continues

In January Glycotest announced that it had completed a 149-person Chinese retrospective study of its test for hepatocellular carcinoma (HCC). It demonstrated 93% sensitivity at 92% specificity, which is superior to the commonly used alpha-fetoprotein (AFP) test. Additionally, ProAxsis announced continued commercial progress with the CE mark of a ProteaseTag research kit for a new enzyme, plasmin, which may have utility in inflammatory conditions of the lung.

Analyst avatar placeholder

Written by

NetScientific

Clinical and commercial progress continues

Clinical update

Pharma & biotech

12 January 2018

Price

68.00p

Market cap

£47m

US$1.32/£

Net cash (£m) at 30 June 2017

11.1

Shares in issue

69.0m

Free float

20%

Code

NSCI

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(7.5)

58.1

3.8

Rel (local)

(11.1)

53.5

(3.7)

52-week high/low

73.5p

40.8p

Business description

NetScientific is a healthcare IP commercialisation group with an investment strategy focused on sourcing, funding and commercialising technologies. Its portfolio of four core investments and one material investment is in three main sectors: digital health (Wanda), diagnostics (Vortex, ProAxsis, Glycotest) and therapeutics (PDS Biotechnology).

Next events

Glycotest, PDS, Vortex and ProAxsis financings

2018

Glycotest opening CLIA lab

2018

PDS and Merck Phase II initiation

H118

Analysts

Maxim Jacobs

+1 646 653 7027

Nathaniel Calloway

+1 646 653 7036

NetScientific is a research client of Edison Investment Research Limited

In January Glycotest announced that it had completed a 149-person Chinese retrospective study of its test for hepatocellular carcinoma (HCC). It demonstrated 93% sensitivity at 92% specificity, which is superior to the commonly used alpha-fetoprotein (AFP) test. Additionally, ProAxsis announced continued commercial progress with the CE mark of a ProteaseTag research kit for a new enzyme, plasmin, which may have utility in inflammatory conditions of the lung.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/15

0.1

(11.3)

(24.4)

0.0

N/A

N/A

12/16

0.5

(12.3)

(20.6)

0.0

N/A

N/A

12/17e

0.6

(9.5)

(12.5)

0.0

N/A

N/A

12/18e

3.5

(12.0)

(14.5)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Glycotest excels in hard to find HCC

The recent clinical results confirmed those from earlier studies that demonstrated that the HCC test could efficiently identify 86% of patients who were missed by an AFP test and even 78% of those who were AFP negative in the early stage disease cohort. This supports the commercial proposition for the test because the ability to catch more patients at an earlier stage will allow them to be treated surgically and significantly reduce downstream costs.

Glycotest to launch in late 2018/early 2019

The current strategy is for Glycotest to perform an additional clinical trial in 2018 using both banked blood samples and prospectively identified patients, although the details on the study have not been released yet. The company then intends to implement the HCC panel test in a US CLIA lab in late 2018 or early 2019. These plans are contingent, however, on securing additional financing, which it hopes to conclude in a near-term Series A.

ProAxsis receives CE mark for third product

ProAxsis recent announced that it received a CE mark for an active plasmin assay using its proprietary ProteaseTag technology. Plasmin, an enzyme responsible for degrading blood clots, can have its activity downregulated in response to various inflammatory lung disorders. The plasmin assay kit may therefore be useful for research involving diseases such as idiopathic pulmonary fibrosis (IPF) and acute respiratory distress syndrome (ARDS).

Valuation: Increased to £70.5m or 102p per share

We have increased our valuation of NetScientific to £70.5m or 102p per share, from £62.1m or 90p per share. This is due to the increase in probability of success for Glycotest to 20% from 10%, resulting in an increase in the value of NetScientific’s share to £19.0m from £10.6m. We expect to update our valuation with the closing of financings for the individual companies, expected in 2018.

Glycotest successfully completes confirmatory trial

On 4 January 2018, Glycotest announced that it had completed a clinical trial measuring the accuracy of its blood-based test for the detection of hepatocellular carcinoma (HCC).The test combines a novel lectin immunoassay with three other biomarkers and demographic data to determine if a patient has developed the disease. The study was performed in China on 149 patients with chronic liver disease under surveillance for the development of HCC. HCC is commonly secondary to other liver diseases such as hepatitis and non-alcoholic steatohepatitis, and therefore there is a population of known at-risk individuals who require routine screening. The current standard biomarker test for these patients is alpha-fetoprotein (AFP), and the goal of the Glycotest technology is to improve on this standard by detecting both earlier forms of cancer and cancer in those patients with low AFP levels.

The data from this trial are very similar to previous data using the assay (Exhibit 1). It was able to identify patients with HCC with 93% sensitivity at 92% specificity. In previous study, composed of blood samples of 208 people with either HCC or cirrhosis, the test was able to identify HCC with a 95% sensitivity and 90% specificity. The sensitivity of AFP found in this previous study (65%) is largely in line with what has been reported in the literature: at the 20ng/mL cut-off sensitivities range from 47% to 68% with specificities in the range of 80% to 91%.1 The Glycotest data also compare attractively to ultrasound, which is another commonly use screening methodology (although there is a wide range of sensitivity for the practice): 60.5% sensitivity and 96.9% specificity.1 The company has not done a direct comparison to ultrasound yet, however.

  Colli A, et al. (2006) Accuracy of Ultrasonography, Spiral CT, Magnetic Resonance, and Alpha-Fetoprotein in Diagnosing Hepatocellular Carcinoma: A Systematic Review. Am J Gastroenerol 101, 513-523.

Exhibit 1: Comparison of HCC detection methods

Source: Glycotest, Colli, et al. Note: AFP representative statistics from previous Glycotest study, * Ultrasound historical comparison.

The company provided an additional analysis in the new data: the Glycotest assay was able to identify 86% of patients with HCC that were undetected by AFP (<20ng/mL), which conclusively demonstrates the superiority of the new test. When the same analysis was performed in the cohort of patients with early disease, The HCC panel was able to identify 78% of the patients that were missed by AFP. We should note however that disease staging was not evaluable for the entire cohort. The ability to detect early disease is of particular importance because it supports the value proposition of the product. Early stage HCC is treatable with surgery and ablation, which can limit a significant degree of downstream costs if detected early.

A limitation of the current study (although not specific to Glycotest) is that it was retrospective in nature using a pre-defined set of blood samples. The benchmark for the demonstration of clinical validity is prospectively defined tests, because they are more statistically rigorous and mirror the application of the test in a real-world setting, in which an array of factors cannot be controlled. The company has stated that it intends to initiate a study with prospective enrolment (in addition to retrospective samples) in the near future.

We believe that this new data continues to build the case that the Glycotest HCC panel can provide a meaningful improvement over the standard of care. Over 480 blood samples have been tested by the company to date. NetScientific’s current strategy is to open a US-based laboratory in 2018 to support a commercial launch in late 2018 or early 2019. This strategy is contingent on the near-term completion of a Series A financing, although this may be easier with the increasing weight of clinical evidence.

ProAxsis gets CE mark for a new test

On 8 January 2017, ProAxsis announced that it had received a CE mark for a test to detect active plasmin using its ProteaseTag technology. Plasmin is a protease that has been implicated in idiopathic pulmonary fibrosis (IPF) and acute respiratory distress syndrome (ARDS) and therefore this assay could be useful for understanding the progression of these diseases. The product is intended for use in a laboratory setting in the study of these and other diseases, similar to the company’s neutrophil elastase immunoassay (NEIA) kit.

Plasmin is a protease present in the blood that, among other functions, breaks down the fibrin protein found in blood clots. It is implicated in inflammatory disorders of the lung because these conditions are characterised by the impairment of fibrin breakdown, which may contribute to the pathology of these disorders. The plasmin assay may therefore be useful in the lab for the development of treatments for these disorders. Similar to the NEIA kit, there already exist other assays for plasmin activity, although the ProteaseTag technology allows very specific and rapid detection.

We expect sales of the plasmin assay to be incremental at first. However, as the recent NEIA has demonstrated with its rapid acceleration of sales, if this test can gain traction in the clinical research markets, it may provide a meaningful revenue source to the company.

Valuation

We have increased our valuation of NetScientific to £70.5m or 102p per share, from £62.1m or 90p per share. This increase is driven by an increase in the probability of success for the Glycotest HCC test to 20% from 10% following the results of the study, leading to an increase in the valuation for NetScientific’s share of the company to £19.0m from £10.6m. We are encouraged by the consistency of the data from Glycotest and believe that the latest study should support further clinical validation and early commercial adoption. We do not plan to include the ProAxsis plasmin assay in our valuation of that company until we have seen early traction for the test.

Exhibit 2: Valuation of NetScientific

Portfolio company

Prob. of success

Profitability

Peak sales (£m)

Margin

rNPV (£m)

Ownership

Share Value (£m)

Vortex

15.0%

2020

138

43%

16.4

95.0%

15.6

Wanda

7.5%

2019

326

52%

16.6

70.9%

11.8

ProAxsis

15.0%

2020

47

51%

14.4

56.5%

8.1

Glycotest

20.0%

2020

113

51%

21.7

87.5%

19.0

PDS

10.0%

2022

270

56%

28.1

17.4%

4.9

Total

 

 

 

 

 

 

59.4

Net cash and equivalents (H117) (£m)

11.1

Total firm value (£m)

70.5

Total shares (m)

69.0

Value per share (p)

102

Source: NetScientific reports, Edison Investment Research

Financials

We have not made any adjustments to our financial forecasts at this time. We expect to update these forecasts with the closing of any financings for individual companies. We expect these to occur for Glycotest, PDS, Vortex, and ProAxsis in 2018. We include the financing shortfall as £16m in illustrative debt.

Exhibit 3: Financial summary

£'000s

2014

2015

2016

2017e

2018e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

24

122

518

559

3,462

Cost of Sales

0

(6)

(255)

(104)

(821)

Gross Profit

24

116

263

454

2,641

Research and development

(3,098)

(7,256)

(7,443)

(6,343)

(7,197)

Selling, general & administrative

(3,212)

(4,260)

(5,001)

(4,488)

(5,839)

EBITDA

 

 

(6,352)

(11,530)

(12,570)

(10,753)

(10,609)

Operating Profit (before GW and except.)

(6,286)

(11,400)

(12,429)

(10,539)

(10,395)

Intangible Amortisation

0

0

0

0

0

Exceptionals/Other

(948)

(1,518)

(666)

0

0

Operating Profit

(7,234)

(12,918)

(13,095)

(10,539)

(10,395)

Net Interest

77

78

86

1,082

(1,587)

Other (change in fair value of warrants)

0

0

(49)

(46)

0

Profit Before Tax (norm)

 

 

(6,209)

(11,322)

(12,343)

(9,457)

(11,983)

Profit Before Tax (IFRS)

 

 

(7,157)

(12,840)

(13,058)

(9,503)

(11,983)

Tax

30

94

(18)

47

60

Deferred tax

0

0

0

0

0

Profit After Tax (norm)

(6,179)

(11,229)

(12,361)

(9,409)

(11,923)

Profit After Tax (IFRS)

(7,127)

(12,746)

(13,076)

(9,455)

(11,923)

Minority interest

702

1,905

1,881

1,945

1,937

Profit After Tax after minority interest (FRS 3)

(6,425)

(10,842)

(11,195)

(7,511)

(9,986)

Average Number of Shares Outstanding (m)

35.9

38.2

51.1

60.1

69.0

EPS - normalised (p)

 

 

(15.3)

(24.4)

(20.6)

(12.5)

(14.5)

EPS - IFRS (p)

 

 

(18)

(28)

(22)

(13)

(14)

Dividend per share (p)

0

0

0

0

0

BALANCE SHEET

Fixed Assets

 

 

3,040

2,946

4,054

3,057

4,519

Intangible Assets

10

1

0

0

0

Tangible Assets

348

285

779

1,161

1,543

Other

2,681

2,660

3,275

1,896

2,976

Current Assets

 

 

17,720

23,799

11,034

10,013

13,127

Stocks

0

0

0

186

692

Debtors

853

560

1,578

1,119

346

Cash

16,867

23,239

9,456

8,708

12,088

Other

0

0

0

0

0

Current Liabilities

 

 

(1,324)

(2,206)

(2,172)

(2,151)

(2,564)

Creditors

(1,281)

(2,156)

(2,044)

(2,028)

(2,441)

Short term borrowings

(43)

(50)

(128)

(123)

(123)

Long Term Liabilities

 

 

(740)

0

(80)

(80)

(15,874)

Long term borrowings

(687)

0

(80)

(80)

(15,874)

Other long term liabilities

(53)

0

0

0

0

Net Assets

 

 

18,696

24,538

12,836

10,839

(792)

Minority Interest

(1,098)

(1,805)

(3,875)

(5,820)

(7,757)

Shareholder Equity

 

 

17,598

22,733

8,961

5,019

(8,549)

CASH FLOW

Operating Cash Flow

 

 

(6,698)

(10,752)

(12,939)

(8,917)

(9,210)

Net Interest

67

38

43

(2)

(1,587)

Tax

19

83

112

47

60

Capex

(336)

(299)

(457)

(596)

(596)

Acquisitions/disposals

(2,181)

(144)

(1,261)

1,053

(1,080)

Financing

0

18,208

0

8,083

0

Dividends

0

0

0

0

0

Other

119

39

66

0

0

Net Cash Flow

(9,010)

7,172

(14,436)

(331)

(12,413)

Opening net debt/(cash)

 

 

(25,069)

(16,136)

(23,189)

(9,248)

(8,504)

HP finance leases initiated

0

0

0

0

0

Exchange rate movements

(140)

(212)

(603)

166

0

Other

218

92

1,098

(578)

0

Closing net debt/(cash)

 

 

(16,136)

(23,189)

(9,248)

(8,504)

3,909

Source: NetScientific reports, Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by NetScientific and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

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Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by NetScientific and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Research: TMT

XP Power — Strong demand continues into Q4

XP saw a strong finish to the year, with Q4 revenue growth of 16% y-o-y and order growth of 24% y-o-y, resulting in FY17 revenues slightly ahead of our forecast. Good demand across all sectors and geographies was boosted by a strong contribution from the recent Comdel acquisition. Management expects continued growth in FY18; we maintain our forecasts which, based on current momentum, could prove conservative.

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Edison Group

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