1. Yojee Limited (Recommendation: Speculative Buy, Market Cap: ~$164.76 Million)

Decent Growth in H1FY21 Revenue: Yojee Limited (ASX: YOJ) operates a cloud-based software as a service (SaaS) logistics platform that services the logistics market at both the SME and enterprise levels.

• For the half-year ended 31 December 2020 (H1FY21), the company reported revenue of $553,139, up 37% on the previous corresponding period (pcp). Over the period, the company deployed its software to existing clients and signed new SaaS customer contracts, with a strong focus on enterprise customers. Net loss for H1FY21 stood at $6.21 million, up from the loss of $2.04 million in pcp, mainly due to increase in technology and related costs, rise in currency related losses, and share-based payments expenses.
• Cash and Debt Scenario: As at 31 December 2020, the company had cash and cash equivalent of $21.14 million, up from the cash balance of $4.31 million as at 30 June 2020, mainly due to the share placement of $20.0 million from institutional and sophisticated investors in September 2020. Debt balance as at 31 December 2020 stood at $0.1 million. Current ratio for H1FY21 stood at 24.96x compared to 4.50x in pcp.
• Outlook: The company has received positive feedback from its existing enterprise clients from its platform deployments and expect this to result in identification of further opportunities in countries within their global operations. It recently entered revenue generating go-live with two further Enterprise Clients and expects revenue growth over the coming quarters. The company expects to sign new agreements and undertake additional deployments of its Platform through calendar year 2021.

A Pictorial Presentation of Key Metrics:

SWOT Analysis:

Stock Recommendation:

• The stock has corrected by 27.49% in the last three months and is trading slightly below the average 52-weeks price band of $0.012 and $0.290, offering a decent opportunity for accumulation.
• On the technical analysis front, the stock has a support level of ~$0.116 and a resistance of ~$0.168.
• The company currently has a decent pipeline of new enterprise countries and is in advanced discussion with all existing Enterprise Clients for expansion Enterprise Projects.
• Key Risks: Technology Disruption, Foreign Exchange Risks, Fluctuations in Logistics Demand
• Considering the rise in the company’s cash balance, improved H1FY21 revenue, expected revenue growth in the coming quarters, current trading level and associated key risks, we give a “Speculative Buy” recommendation on the stock at the closing price of $0.150 as on 12 March 2021. 

2. Envirosuite Limited (Recommendation: Speculative Buy, Market Cap: $153.92 million)

Improved Gross Margin in H1FY21: Envirosuite Limited (ASX: EVS) is engaged in the development and sale of environmental management technology solutions. The company provides its solutions across the Air, Noise, and Water segments, and serves 500 customers worldwide, including BHP, Thames Water, Tata, Lendlease, etc.

• For H1FY21, the company reported revenue of $23.6 million, up by 533% on pcp. Further, the company reported improve gross margin of 40.6% compared with 32.0% for H2FY20 and 25.6% for H1FY20. Adjusted EBITDA loss for H1FY21 stood at $3.6 million, an improvement over the loss $6.9 million in H2FY20, despite the impacts of COVID-19 on the Group’s nonrecurring revenue, temporary discounts offered to Airport customers, and the impacts of FX on the Group’s USD revenue.
• Cash and Debt Scenario: As at 31 December 2020, the company had a cash balance of $9.7 million and debt of ~$4 million. Current ratio for H1FY21 stood at 1.61x and debt to equity ratio stood at 0.04x.
• Outlook: In H2FY21, the company expects its recurring revenue to grow by 4-8% on H1FY21, as temporary discounts offered to Airport customers start to unwind. Adjusted EBITDA is expected to be positive in Q4FY21, dependent on timing of non-recurring revenue.

A Pictorial Presentation of Key Metrics:

SWOT Analysis:

Stock Recommendation:

• The stock of EVS has corrected by 13.88% in the last three months and is trading lower than the average 52-weeks price band of $0.07 and $0.255, offering a decent opportunity for accumulation.
• On the technical analysis front, the stock of EVS has a support level of ~$0.131 and resistance of ~$0.172.
• Looking ahead, the company is focused on unlocking new opportunities through its product strategy and expects its recurring revenue to grow by 4-8% on H1 FY21.
• Key Risks: Foreign Exchange Risk; COVID-19 Uncertainties, Technology Disruption
• Considering the company’s decent performance in H1FY21, expected improvement in recurring revenue and Adjusted EBITDA in H2FY21, ongoing transformation of the company’s operational model, current trading level, and the key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.160, up by 6.66% as on 12 March 2021.

3. BluGlass Limited (Stock Recommendation: Speculative Buy, Market Cap: $57.8mn)

Decent Rise in H1FY21 Revenue: BluGlass Limited (ASX: BLG) is an Australian semiconductor developer that develops high-value semiconductor devices such as laser diodes, next generation LEDs and microLEDs.

• For the half-year ended 31 December 2020 (H1FY21), the company reported revenue of $2.21 million, up 26% on pcp. Total expenditure for the period increased by 19.7% to $5.9 million, driven by increase in consumables expenses and depreciation expenses. During H1FY21, BLG received a $250,000 advanced manufacturing federal government grant to manufacture smarter, more efficient plasma deposition sources. Net loss for H1FY21 stood at $3.68 million.
• Cash and Debt Scenario: As at 31 December 2020, the company had cash balance of $4.29 million and debt of around $2 million. Current ratio for H1FY21 stood at 5.38x and debt to equity ratio stood at 0.18x.
• Outlook: Looking ahead, the company is focused on advancing its breakthrough RPCVD low resistivity p-GaN and tunnel junction laser diode designs for enhanced laser products. It is also advancing its MOCVD standard laser diode product suite ahead of its first product launch in early 2021.

A Pictorial Presentation of Key Metrics:

SWOT Analysis:

Stock Recommendation:

• Over the last three months, the stock has corrected by 13.68%.
• The stock has a 52-week low and high of $0.018 and $0.135, respectively.
• On the technical analysis front, the stock has a support level of $0.073 and resistance of ~$0.0882.
• BLG is on track to launch its first commercial laser diode product, the 405nm device, in early CY2021.
• Key Risks: Change in Technology, COVID-19 Disruption
• Considering the company’s decent rise in H1FY21 revenue, healthy balance sheet, its target of achieving 6-10% share of US$658 million addressable market by 2025, modest long-term outlook, and the key risks associated with the business, we give a “Speculative Buy” recommendation for the stock at the current market price of $0.082, up by 2.5% as on 12 March 2021.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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