Original-Research: CS MEDICA A/S (von NuWays AG): Buy

Classification of NuWays AG to CS MEDICA A/S

Company Name:	CS MEDICA A/S
ISIN:	DK0061668225
Reason for the research:	Initiation
Recommendation:	Buy
from:	04.11.2024
Target price:	EUR 2.30
Target price on sight of:	12 months
Last rating change:
Analyst:	Christian Sandherr

Revolutionizing alternative medicine; Initiate with BUY

CS MEDICA, a Danish Med-Tech company founded in 2011, is at the forefront of developing CBD-infused medical devices that offer safe, effective alternatives for autoimmune and stress-related conditions like arthritis, psoriasis, pain and hair loss. The company utilizes CBD's proven anti-inflammatory and antioxidative properties in >10 products, classified as medical devices or cosmetics and backed by clinical trials. With regulatory approval in major markets such as the EU, U.K. and the U.S., CS MEDICA has established itself as a key player in the rapidly growing alternative medicine space.

CS MEDICA's capital-light business model focuses on R&D and distribution while outsourcing manufacturing to partners in Europe. This allows the company to scale efficiently while minimizing operational risks. As one of only few CBD-infused medical device company registered for sale in pharmacies, CS MEDICA occupies a unique position at the intersection of the pharmaceutical and cosmetics markets, offering clinically proven products with fewer side effects at competitive price points.

CS MEDICA’s hybrid product formulations, which combine R&D, clinical evidence, compliance, and the benefits of CBD, a natural ingredient, set the company apart from competition. Its flagship line, CANNASEN ®, includes highly effective treatments for pain, skin disorders, and hair loss, with superior bioavailability when applied topically.

Strong growth prospects: Global demand for alternative treatments is booming, with the alternative medicine market projected to grow at a 15.7% CAGR until 2031. CS MEDICA is well-positioned to benefit from this trend. Especially non-European markets such as MENA and APAC offer high growth potentials once the regulatory hurdles have been overcome and social acceptance increased. The company’s private/white-label segment (~ 2/3 of order intake), offers a steady revenue stream, while its CANNASEN® brand continues to expand, contributing to rapid top-line growth.

The market's strong growth prospects coupled with CS MEDICA's unique positioning should allow the company to strongly grow its top-line to DKK 108m by FY 2027/28e, implying a 61% CAGR (vs FY 2023/24e). At the same time, thanks to the resulting operating leverage, the EBITDA margin should turn positive, reaching 25%.

We initiate the coverage with a BUY rating and a EUR 2.30 PT based on a SOTP valuation.

You can download the research here: http://www.more-ir.de/d/31171.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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