Company Overview: Webjet Limited (ASX: WEB) is an Australia-based business engaged in the online sale of travel products, including hotel rooms and flights. The company’s business operates in both business-to-business (B2B) wholesale division (includes WebBeds) and retail business-to-consumer (B2C) retail division (includes Webjet OTA and GoSee). Ainsworth Game Technology Limited (ASX: AGI) is an Australia-based company, which is engaged in designing, manufacturing, developing, selling, and distribution of gaming content and platforms. Kalkine’s Market Event Report covers the Investment Summary, Event Summary, Data Insights & Analysis, Key Financial Metrics, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.
Investment Summary
Event Highlights
Data Insights and Analysis
Key Drivers versus Key Challenges
According to the announcement on Chinese tour group, two ASX stocks are identified to showcase the momentum.
(1) Webjet Limited (ASX: WEB)
(Recommendation: ‘Buy’ at AUD 6.730, Potential Upside: Low Double-Digit)
(M-cap: AUD 2.58bn)
Company Overview: WEB is an Australia-based business engaged in the online sale of travel products, including hotel rooms and flights. The company’s business operates in both business-to-business (B2B) wholesale division (includes WebBeds) and retail business-to-consumer (B2C) retail division (includes Webjet OTA and GoSee).
12-month ended 31 March 2023 Financial Year (FY23) Financial Performance: Reported EBITDA for the period stood at AUD 134.8mn, representing a YoY turnaround of AUD 150mn. As of 31 March 2023, WEB held AUD 514mn in cash balance post repayment of AUD 86mn bank debt. Group bookings inclined by 16% and surpassed the pre-pandemic levels. The total transaction value (TTV) stood at AUD 4.35bn relative to AUD 1.64bn in FY22 and AUD 4.30bn in calendar year 2019 (pre-COVID).
Business Update: On 4 September 2023, WEB pursued capital management initiatives for the buy-back of AUD 250mn convertible notes which mature in 2026 and enter into equity derivative agreements with up to a maximum exposure of AUD 150mn for obtaining economic exposure to the price and dividends.
Outlook: As of 27th August 2023, WebBeds TTV surged over 30% (based on EURO functional currency) and bookings surged more than 30% on prior comparative basis. For the same period the TTV went up over 20% for webjet.com.au and bookings surged over 5%. WEB is focused towards differentiating product offerings with ROOMDEX and serving new markets (B2C and Merchant of Record).
The stock has witnessed a decline of ~9.42% in last one month, and over the last six months, it dipped by ~2.46%. The stock has a 52-week low and 52-week high of AUD 4.620 and AUD 7.990, respectively and is currently trading above the 52-week high-low average. WEB was last covered in a report dated ’8 December 2022’.
(2) Ainsworth Game Technology Limited (ASX: AGI)
(Recommendation: ‘Hold’ at AUD 1.000 Potential Upside: Low Double-Digit)
(M-cap: AUD 336.79mn)
Company Overview: AGI is engaged in developing, designing, manufacturing, selling, and distributing gaming content and platform.
6-month ended June 2023 Financial Period (1HFY23): Revenue surged by AUD 143.6mn, up by 20% PcP. EBITDA stood at AUD 10.4mn relative to AUD 12.5mn in 1HFY22. The top-line bulge was largely associated to higher sales in Argentina and North America. On PcP basis, the underlying EBITDA remined constant at AUD 29.4mn. Net profit for the year increased to AUD 4.2mn relative to AUD 2.7mn in 1HFY22, largely attributed to AUD 13.2mn increase in product sales, AUD 5.7mn surge in gaming operations, and AUD 3.3mn uptick in service revenue.
Outlook: AGI entered FY23 with favourable momentum and expected to sustain further growth in North America, improvements in Latin America markets, and steady movement in Australian market.
The stock has witnessed a surge of ~2.56% in last six month, and over the last one year, it advanced by ~8.11%. The stock has a 52-week low and 52-week high of AUD 0.770 and AUD 1.350, respectively and is currently trading slightly below the 52-week high-low average. AGI was last covered in a report dated ’28 August 2023’.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an Indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 25 September 2023. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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