Mauna Kea reported H1/2018 sales of €2.7m (-18% YoY) slightly below our expectations, mainly due to delays in revenue recognition from new Cellvizio systems installed under the new consignment business model in the US and a 40% decline in sales in EMEA as a result of increased focus on the core clinical business in the US. Importantly, the company reported strong installed base growth, with the number of new consignment systems installed in H1/2018 (16) already exceeding the number of systems installed in FY2017 (13). As a result, we are revising our sales forecasts for FY2018E and FY2019E. Our estimates for out-year remain broadly unchanged as we continue to believe that Mauna Kea is well-positioned to enter a period of accelerated growth, driven largely by its new pay-per-use business model and continuous improvements in reimbursement for procedures involving Cellvizio. We reiterate both our OUTPERFORM recommendation and €4.10 target price.
