The e-commerce pharmacy Zur Rose has recently been forced to deal with repeated setbacks, but 2023 could mark the turning point. On Swiss DOTS, Switzerland’s leading OTC marketplace for leveraged securities, risk-friendly investors can find the right solutions for a promising Zur Rose speculation — both upwards and downwards.

Zur Rose shareholders have already been experiencing a rollercoaster of emotions for more than a year. In anticipation of the introduction of electronic prescriptions, the price has been blithely shooting up and down. From CHF 100 in March 2020 — spurred on by COVID-19 — the price flew up to CHF 500 in just under a year, only to then subsequently relinquish all its gains. Even more: At its lowest, the security stood at CHF 23, which represents a capital erosion of an unprecedented CHF 6 billion

The deep dives in the chart go hand in hand with the numerous delays in the eagerly anticipated rollout of e-prescriptions in Germany. Their introduction was initially expected by 1 January 2022, but the start was delayed due to technical issues. At the beginning of this year, the relevant authority, Gematik, published the new roadmap, with a launch scheduled for the second half of the year. Nothing came of this either: The pilot phase in North Rhine-Westphalia was even abandoned in November.

However, this is expected to be the last setback. A few days ago in Berlin,The German Health Minister, Karl Lauterbach, exercised his authority in this respect. E-prescriptions should finally be introduced in 2023. According to him, the ostensible technical issue, which has recently caused delays, will be remedied by the middle of next year. Beyond this, Mr Lauterbach also has value-added offerings in mind for the e-prescription.

Admittedly it’s not just Zur Rose that is waiting for the launch, its competitor, Shop Apotheke, would like a piece of the anticipated billion euro pie. However, thanks to its extensive reach and technological edge, Zur Rose has the right cards in its hand to be at the top of the list for profit. In addition, the market, with estimated annual sales of more than EUR 50 billion, is large enough as a whole for several major players.

Online pharmacies are still in demand, even without e-prescriptions. Coronavirus, in particular, has acted as a catalyst for business. Numerous consumer habits shifted to the internet almost overnight and Europe’s largest e-Commerce pharmacy experienced a real boom in demand. At the end of 2020, the company with its headquarters in Frauenfeld in the Canton of Thurgau, had 10.5 million active customers — over 50% more than in the previous year. This growth continued unabated: At the end of 2021, this figure had increased to 12.4 million. Admittedly, after the first three quarters of 2022, there was a small drop to 11.3 million people, who are registered wit Zur Rose. This is mainly due to the fact that the company has implemented optimisation measures on its southern European marketplace to ensure more profitable sales.

Apropos profitability: Zur Rose is still operating deep in the red, but this is expected to change soon — regardless of the accelerated rollout of e-prescriptions. To this end, an EBITDA break-even programme was established for 2023, which is progressing well, according to the Executive Board. The first improvements will be visible this year. The adjusted target EBITDA has been restricted to between minus CHF 75 million and minus CHF 85 million, whereas the spread has previously extended to minus CHF 95 million. The medium-term goal for a target EBITDA margin of 8% has also been confirmed.

In order to achieve the forecast, the online pharmacy is also streamlining its distribution network, resulting in the closure of the logistics centre in Bremen, Germany, at the end of the year. In future, the intention is for customers’ medication to be supplied by the DocMorris pharmacy chain from the new logistics centre in the Dutch city of Heerlen.

Despite these measures and success, the focus of shareholders, analysts and professional investors continues to be on e-prescriptions. This is demonstrated once again in the latest price response to Minister Lauterbach’s statements. The initial response was for the price of Zur Rose to shoot steeply upwards and to close 15% higher, but this did not mark the end of the upward trend. In the following days, the price rose by a further 18% to a high of CHF 32.24. So the hard-hit stock appears to be back in the game.

Analysts are currently divided as regards the further evolution of Zur Rose shares. While UBS and Deutsche Bank, for example, recommend selling and see a fair value as being around CHF 24, Baader Bank (Target: CHF 55) and Warburg Research (Target: CHF 106) are more confident. Bullish investors could exploit the current momentum and venture a leveraged speculation. A total of 136 leveraged products for mid-caps are listed on Swiss DOTS, of which 26 are long and 110 are short products. The mini-long product (Valor 123265473) issued by BNP Paribas on Swiss DOTS in early December is suitable for upward speculation. The mini-future, which can be traded on trading days between 8:00 and 22:00, offers leverage of 5.7.

The stop loss, which is always adjusted on the first of the month, is CHF 24 and thus allows 13% on the lower side in a consolidation. The knock-out call warrant (Valor: 122085347) offers a somewhat greater buffer. The open ended product also offered by BNP offers a barrier distance of 34.2%. Greater security comes at the cost of leverage, which is 4.15 for this instrument.

In the event that hope of a launch of e-prescriptions should fade again, a short product would be the appropriate trading solution. For example, the knock-out put warrant (Valor 121551821) with “conservative” leverage of 2.81 and a stop loss of CHF 37.653 is worth considering. In this case, the buffer is 35.6%. The mini-short product (Valor 123265874) packs a little more punch with leverage of close to 5. The risk threshold is CHF 32. Should a knock-out event occur for the above products, there is a risk of total loss.

Swiss DOTS is Switzerland’s leading OTC platform for leveraged products. The Zur Rose derivatives presented here are just some of more than 90'000 ideas you can trade affordably between 08:00 and 22:00 each day from CHF 9.00 flat/trade.