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Oneview Healthcare plc

ASX:ONE

Last Price:

$0.080

Our Investment Summary

Date of Initial Coverage

12-Mar-21

Initial Entry Price

$0.060

Returns from Initial Entry

33%


Our Big Bet for ONE

ONE will sign on enough new hospital beds at an accelerating rate to achieve a $1Bn valuation (based on 5x to 10x forward ARR multiple) and be acquired by a large health tech provider.

Investment Memo: Oneview Healthcare plc (ASX:ONE) - LIVE

Opened: 13-Jan-2022

Shares Held at Open: 8,525,000


What does ONE do?

Oneview Healthcare (ASX:ONE) is a health tech company that provides hospital patients a “virtual care and digital control centre” at their bedside. ONE’s products are cloud-hosted patient dashboards that help make hospitals more efficient and patients more engaged in their own care.

What is the macro theme?

The pandemic has rapidly accelerated the trend towards healthcare modernisation, and we believe any product or service that brings efficiency to healthcare systems will be highly sought after. As big tech companies like Google, Amazon and Microsoft look to enter the health tech space, companies with an early-mover advantage should thrive or become takeover targets in their own right.

Why did we invest in ONE?

Proven tech, liked by customers

ONE is moving into the growth stage having proven out its tech products in a hard to enter sector (hospitals).

$20M capital injection to fund rapid growth

ONE completed a capital raise late in 2021 and with a war chest to fund its growth we look forward to ONE becoming cash flow positive and quickly increasing the number of contracted beds it has in the US.

Under promise, over deliver

ONE’s management team has delivered everything they said they would since we invested, so we are confident they will hit their revenue projections and US market share objectives in 2022.

What do we expect ONE to deliver?

Objective #1: Fast revenue growth and contracted beds in excess of 15,000

For ONE, ‘contracted beds’ is like an ‘active user’ metric for a tech company. We think this will be the basis for judging ONE’s success in 2022. More contracted beds = more revenue. We want to see ONE hit a total of 15,000 in 2022, primarily out of the USA.

Objective #2: Increased sales/marketing spend leading to more deals with major hospital networks

ONE now has a proven tech product that is valued by its clients. As of this memo, ONE spent less than 10% of its receipts from customers on advertising and marketing - if its to quickly accelerate contracted beds (revenue), we think upping spend in this area is crucial.

Objective #3: More sales through Microsoft and Samsung partnerships

As Samsung tablets are the device which works with the ONE product - Samsung sales reps should be incentivised to push ONE’s product. Likewise, since Microsoft’s Azure Marketplace is the cloud platform that ONE has opted to work with, we would like to see sales growth through this channel.

Objective #4: Material contribution to revenue from upsells to older coaxial wired hospitals wings

ONE is now providing “coaxial set-top boxes” which allow older hospital rooms that are wired up using legacy coaxial cables to use ONE (where previously they couldn’t) - we we want to see a wave of sign-ons of older hospital rooms that previously couldn’t use ONE, enough to materially impact topline revenue.

What could go wrong?

Sales risk

Despite a strong customer retention rate and the endorsement of the product by prestigious hospitals, ONE could lose key clients or not seal as many deals in the coming 12 months, hurting their revenue and share price.

Competition risk

ONE has an early mover advantage, but it is not alone in the space it operates in. We think ONE has a really powerful product that should be helped by its traction at some of the most prestigious hospitals in the US. That being said, a big tech company could launch a competitor product.

Funding risk

Although ONE raised $20M in November 2021, growth companies need cash to achieve their goals. If ONE doesn’t use the money from this raise wisely, then share price pain could follow. This was ONE’s third capital raise since it listed in 2016.

Technology risk

ONE will need to add functionality to its products over time as the health tech industry advances. ONE has flagged that a range of additional features are in the pipeline, and the successful roll out of these features could help it reduce this particular risk as hospitals become more advanced.

What is our investment plan?

We have invested in ONE twice since we announced it as our Tech Pick of the Year for 2021 in March last year.

The first time at 6 cents and the second time in the recent cap raise at 27 cents.

ONE experienced a significant share price re-rate during 2021 after it announced several new contracts and the health tech sector became hot. As per our usual investment plan we partially de-risked our position selling 22.37% of our total holding, achieving a partial free carry.

We plan to hold a position in ONE for the next 3-5 years (and beyond) as it progresses its plan to gain significant market penetration in the lucrative US healthcare market, and may look to take some profit by selling up to ~17% of our holding if the company successfully delivers on the key objectives listed above and the share price hopefully re-rates again.


Disclosure: The authors of this memo and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 8,525,000 ONE shares at the time of writing. S3 Consortium Pty Ltd has been engaged by ONE to share our commentary on the progress of our investment in ONE over time.


Investment Milestones for ONE

✅ Initial Investment @ 6c
✅ Top Slice
✅ Free Carry
✅ Increase Investment @ 27c
✅ Free Carry
🔲 Take Profit
✅ Price increases 300% from initial entry
✅ Price increases 500% from initial entry

🔲 Price increase 1000% from initial entry
✅ 12 Month Capital Gain Discount
🔲 Hold remaining Position for next 2+ years

Our Past Commentary on Oneview Healthcare plc

Date Title
30-Jan-2023 $ Can ONE deliver contracts as we emerge from the 2022 tech wreck?
04-Oct-2022 $ Accelerating growth, when will the macro catch up?
17-Sep-2022 $ 0.105 Meeting management matters: In person catch ups with GAL, DXB and LRS
28-May-2022 $ 0.240 Share price moves on expected vs unexpected announcements
23-May-2022 $ ONE signs its biggest deal ever
29-Apr-2022 $ Oneview’s Latest Quarterly Shows 3x Increase in RFPs/RFIs
26-Feb-2022 $ 0.225 The War Begins, Cybersecurity, Food Security, Energy Independence and Precious Metals
14-Jan-2022 $ 0.270 How do Fund Managers Invest in Small Cap Stocks?
13-Jan-2022 $ ONE delivers record quarter and unlocks legacy hospital sales.
20-Nov-2021 $ 0.290 Australia bets big on Hydrogen at COP26, investment in companies that solve problems
15-Nov-2021 $ ONE goes for US market share ‘Land Grab’ with $20M Capital Raise
30-Oct-2021 $ 0.375 The fallout from the VUL short attack explained
25-Oct-2021 $ 0.400 Lockdown lifts, Two stocks to watch: MNB and ONE
20-Oct-2021 $ ONE announces US $2.4M contract, leveraging Samsung and Microsoft partnerships
25-Sep-2021 $ 0.410 Managing a market crash - lessons from March 2020
20-Sep-2021 $ 0.430 ONE, VUL all grown up… BPM, LCL finding targets. PUR drilling again.
04-Sep-2021 $ 0.380 Annual Reports, Uranium and a Welcome to New Subscribers
30-Aug-2021 $ 0.330 ONE delivers foundation for “100% revenue growth in next 6 months”
28-Aug-2021 $ 0.330 Recap of the KNI IPO and share price run
31-Jul-2021 $ 0.420 Quarterly Reporting Season and other news from our portfolio stocks
29-Jul-2021 $ 0.410 Expectations exceed, our Tech Pick of the Year delivers a strong quarter of growth.
19-Jun-2021 $ 0.450 What is Tax Loss Selling?
18-Jun-2021 $ 0.440 ONE signs ANOTHER deal - the second in 8 days
12-Jun-2021 $ 0.450 What did our investments do this week? CPH, ONE, TMZ, 88E and more...
10-Jun-2021 $ 0.420 ONE's First Cloud Deal a Monster
10-May-2021 $ 0.310 Top 10 US Hospital Endorses ONE’s Health Tech
27-Apr-2021 $ 0.385 Our Portfolio Performance from January 1st to March 31st 2021
23-Apr-2021 $ 0.375 The Quarterly Results Are in For Our Tech Pick Of The Year
31-Mar-2021 $ 0.325 ONE is Our Pick of the Year - It's Just Turbocharged its Sales Strategy
19-Mar-2021 $ 0.230 Tell Me Why: The 10 Reasons We Invested in ONE
19-Mar-2021 $ 0.230 10 Reasons we Invested in ASX:ONE - Our 2021 Tech Pick of the Year
12-Mar-2021 $ 0.077 Our New 2021 Tech Pick of the Year




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