Qlife Holding: Chinese deal has very good long-term prospects, but short-term financial challenges remain
Qlife Holding’s share dropped 8,5 percent yesterday, following an event with CEO Thomas Warthoe, who presented the company with special focus on the recently announced deal with Chine based life-science company Hipro Biotechnology. As we have learned the last week, the collaboration with Hipro Biotechnology offers great potential as the Chinese partner will distribute the by Qlife Holding developed Egoo Health system to their approximately 14.000 customers in the Chinese hospital sector. Qlife Holding previously clarified that they expect that Hipro Biotechnology will sell Egoo Health system for SEK 100-200 million in the first full year of business (2025) and for SEK 300-500 million within 5 years. At the event CEO Thomas Warthoe shared some very positive details about the partnership explaining that Qlife Holding will receive a royalty rate of 20 percent with further upside if Hipro Biotechnology has a margin of over 40 percent in which case Qlife Holding’s royalty rate will rise an extra 1 percent for each 2 percent the margin is above 40 percent. The high royalty rate was certainly positive news and bodes very well for Qlife Holding’s long-term prospects. Short term, however, investors were probably more concerned that Qlife Holding will not receive any up-front milestones from Hipro Biotechnology, and confirmation by CEO Thomas Warthoe that the company needs to bridge their financing needs somehow in 2024 without giving any further details.
Listen to the interview here: Qlife Holding event
Disclaimer: HC Andersen Capital receives payment from Qlife Holding for a Digital IR/Corporate Visibility subscription agreement. /Claus Thestrup 10:00 AM/ 12-12-2023.