Translation: Original published in Finnish on 11/04/2026 at 08:00 am EET

Biohit's share price has fallen clearly since the H1 report, even though no major negative news has been heard from the company's business operations. We keep our estimates unchanged, but raise the required return in our DCF model due to the increase in the risk-free rate. We are also postponing our estimate for the collection of receivables. We lower our target price to EUR 2.8 (was EUR 3.3) as a result ofthe revisions, but raise our recommendation to Buy (was Accumulate) following the share price decline. We find the valuation of the share favorable, and the risk/reward ratio has become attractive.

Strategic projects are progressing, albeit slowly

The CEO's Q3 review published in October did not include new financial figures. The progress of strategic projects was in line with our modest expectations. In the UK, GastroPanel is being tested in pilots at Oxford and Cambridge, among others, but the completion of the first pilots will still take at least half a year. The FDA process progressed slowly at the beginning of the year due to reasons related to the authority, and the company did not provide an updated schedule in this regard.

Biohit received positive news from South America at the end of last year, as Chile took Biohit's products into its national health program. Similar projects are underway in Chile's neighboring countries, from which we estimate the company has good prospects of securing similar defensive sales in the future. The company's comments have also been positive regarding development in the UK, although the timeline appears to be stretching compared to previous expectations.

Estimates unchanged

We keep our estimates unchanged. We expect the company's revenue to grow by 4% to 16.3 MEUR this year, which is slightly below the company's guidance range of 16.5-17.3 MEUR. We expect the company's EBITDA to reach 3.0 MEUR (18.2% of revenue). For next year, we expect growth to accelerate to around 10% as screening projects progress We expect the EBIT margin to decrease slightly as a result of the change in the sales mix and, particularly, the end of royalty payments from China. We believe the collection of significant receivables in China remains a key question for the investment story, as the growth of receivables has weighed on cash flow, making it clearly weaker than the reported earnings. According to the annual report, receivables will be collected gradually over several years, and a significant portion of the receivables will be recognized as revenue more than five years from now. We have postponed our estimate for the collection of receivables compared to our previous estimates. This has no impact on earnings estimates, but the shift in cash flows decreases the value of the DCF model. We also raise our required return in the model based on the rise in the interest rate level.

The risk/reward ratio has turned attractive

Based on our 2027 forecasts, the stock’s P/E ratio is approximately 13x and the EV/EBIT ratio, which takes net cash into account, is approximately 10x, which is clearly below that of global diagnostic peers. We find the multiples attractive based on good profitability, moderate growth, and the defensiveness of the industry. On the other hand, we believe that Biohit's acceptable multiples have decreased due to the slow collection of receivables and the flattening slope of growth. Based on our DCF model, the share value is EUR 3.0. From a risk perspective, the situation is twofold. The highly profitable, defensive business and strong balance sheet decrease the risk level, whereas the cash flow development and limited visibility into the future increase it. Overall, we believe the risk/reward ratio is attractive following the sharp share price decline.