We initiate coverage of Mauna Kea Technologies with an OUTPERFORM recommendation and a target price of €4.10 per share. Mauna Kea is a commercial stage medical device company headquartered in Paris, France. The company's main product, Cellvizio, is a market-leading confocal laser endomicroscopy system used for in-depth analysis of cellular microstructure, facilitating the real-time identification of pre-cancerous lesions in anatomical tracts such as the gastrointestinal and pulmonary tract. In addition to Cellvizio, the company markets Cellvizio Dual Band for pre-clinical, non-human research, as well as a range of disposable probes for each of its systems. We believe the company is well-positioned to enter a period of accelerated growth, driven mainly by Mauna Kea's new business model in the US and improved reimbursement structures for procedures involving Cellvizio. We forecast strong revenue growth at a 2018E-2022E revenue CAGR of 27% and expect profitability from 2022E.
