WiseTech Global Ltd

Strategic growth initiatives & strong 1H 2018 results: WiseTech Global Ltd (ASX: WTC) stock plunged 23% on February 21, 2018 after the company reported 1H 2018 results entailing 31% growth in the revenue and 8% growth in the net profit attributable to equity holders to $15.6m. Moreover, WTC in 1H 2018 to February 2018, announced 11 valuable acquisitions across Brazil, Taiwan, Australia, North America, the Netherlands, Ireland and Belgium. The company has progressed product development in China, Italy, Germany and Brazil and across the global adjacencies. Additionally, for FY 18, WTC expects revenue in the range of $207m to $217m and EBITDA in the range of $71m to $75m, which might not have gone down well with the investors. The stock still trades at a very high level and looks “Expensive” at the current price of $11.25
 

1H 18 Financial Performance (Source: Company Reports)
 

a2 Milk Company Ltd

Second half will be affected by a higher marketing expense:a2 Milk Company Ltd (Australia) (ASX: A2M) stock surged 29.7% on February 21, 2018 after the company for 1H 2018 has reported 70% growth in the revenue to $434.7 million, while its net profit after tax grew 150% to $98.5 million. However, the earnings growth in the second half will be affected by a higher marketing expense, with a half-on-half increase now likely to be in the range of ~NZ$35 - $40 million given the timing and scope of marketing programmes in China and the United States. On the other hand, a2 Milk Company and Fonterra Co-operative Group Limited have formed a comprehensive strategic relationship for a range of supply, distribution, sales and marketing arrangements in targeted markets. This will provide growth initiatives in new A1 protein free products and enable consumers to obtain new and innovative milk products. Meanwhile, A2M stock looks to be trading at a higher level and is “Expensive” at the current price of $11.30
 

Corporate Travel Management Ltd

On track to achieve top end of FY18 Guidance:Corporate Travel Management Ltd.’s (ASX: CTD) stock rose 13.8% on February 21, 2018 after the company reported for 1H 2018 Underlying EBITDA growth of 32% to $53.5m and TTV growth of 21%. Moreover, the company had previously projected FY18 underlying EBITDA range of AUD$120-125m (22.0%-27.5% growth on the pcp). The company is on track to achieve top end of FY18 Guidance (approximately $125m), despite unfavorable FX. Therefore, 2H EBITDA organic growth on the pcp will be nearly 23%. We give a “Hold” recommendation on the stock at the current price of $24.31, given the trading scenario.
 

Lendlease Group

Buy back and 8% growth in net profit in 1H 2018:Lendlease Group’s (ASX: LLC) stock rose 6.5% on February 21, 2018 after the company reported 8% rise in 1H 2018 net profit to A$425.6 million, underpinned by strong performance in its development and investment segments. Moreover, LLC has also announced a buy-back of A$500 million of its shares. LLC has made further progress in reallocating capital to the international operations after the part sale of the Retirement Living business, the growth in the international urbanisation pipeline and the launch of a telco infrastructure JV with Softbank Group in the US. As there is more room for upside momentum, we give a “Hold” recommendation on the stock at the current price of $17.00
 

Fairfax Media Ltd

Modest 3% growth in the revenue in 1H 2018:Fairfax Media’s (ASX: FXJ) stock rose 5.3% on February 21, 2018 after the company reported modest 3% growth in the revenue to $873 million in 1H 2018. However, the company posted the net profit of $76.3 million, down 10%. Moreover, the trading in the first seven weeks of FY18 H2 saw revenues approximately 4% to 5% below last year and the total revenue growth of 11%. We give a “Hold” recommendation on the stock at the current price of $0.695, while the stock seems to be recovering a bit.
 

Sydney Airport Holdings Pty Ltd

Operating expenses increased by 10.4% in full year 2017: Sydney Airport Holdings Pty Ltd (ASX: SYD) stock fell over 3% on February 21, 2018 after the company reported for full year result with 8.7% growth in the revenue due to the international passengers, capital investment and growth across all businesses. However, the Operating expenses increased by 10.4% to $26.7 million, primarily due to hotel expenses associated with the additional revenues from the new business, higher electricity prices and higher recoverable security expenses. Given the shortcomings, we have an “Expensive” recommendation on the stock at the current price of $6.52
 

Downer EDI Ltd

Statutory net loss after tax of $15.9 million in 1H 2018: Downer EDI Ltd (ASX: DOW) reported 69.3% growth in the total revenue to $6.1 billion for 1H 18. However, the company has reported the statutory net loss after tax of $15.9 million and highlighted its mining business to be a drag. Additionally, for FY 18, DOW is expecting consolidated underlying NPATA of $295 million before minority, including underlying NPATA of $202 million for Downer and $93 million for Spotless. We give an “Expensive” recommendation on the stock at the current price of $6.80
 

Steadfast Group Ltd

Reaffirmed FY18 guidance:Steadfast Group Ltd.’s (ASX: SDF) stock fell 7% on February 21, 2018 after the company posted 1H 2018 statutory NPAT of $33.8m, down 10.9% due to non-trading gains being lower than the prior corresponding period. The company for 1H 2018 has posted record first half gross written premium (GWP) of $2.6 billion placed by Steadfast Network brokers, which is an increase of 8.0%. Moreover, SDF has reaffirmed FY18 guidance announced in December, and we give a “Hold” recommendation on the stock at the current price of $2.50
 

FY 18 Guidance (Source: Company Reports)
 

Lovisa Holdings Ltd

Rise in revenue for first half 2018: Lovisa Holdings Ltd (ASX: LOV) reported revenue growth of 18.9% following comparable store sales growth of 7.4% and NPAT increased 23% to $24.8m. LOV stock has risen 32.88% in three months as on February 20, 2018 and looks “Expensive” at the current price of $8.14
 

Spark New Zealand Ltd

Affirmed full-year 2018 EBITDA guidance:Spark New Zealand Ltd.’s (ASX: SPK) first half 2018 net profit fell about 3 percent to NZ$172 million as it experienced fierce competition in the mobile market. H1 FY18 revenues grew 1.6%, to $1.82 billion, despite intense competition in all the markets. Moreover, SPK has affirmed full-year 2018 EBITDA guidance of 0-2% growth compared to FY17 actual EBITDA (excluding net gain from sale of Mayoral Drive Carpark). Further, SPK is expecting business transformation to strengthen the FY19 result. However, if the program is accelerated, then FY18 guidance may reduce due to the associated costs of change. We give a “Hold” recommendation on the stock at the current price of $3.11
 

Greencross Ltd

GXL business is performing in line with plan in FY18:Greencross Ltd.’s (ASX: GXL) stock rose 3% on February 21, 2018 post losing momentum a day before with the 1H 2018 result reporting 9% growth in the revenue to $433.3 million driven by 4.5% Group LFL sales growth and network expansion. Reported NPAT is up 9% to $23.2 million and underlying NPAT is up 11% to $24.4 million for 1H 2018. Moreover, GXL business is performing in line with plan in FY18 YTD and the company remains comfortable with market consensus for the full year result. GXL expects its effective tax rate for the full year FY18 to be approximately 28%. We have a “Hold” recommendation on the stock at the current price of $6.10
 

Appen Ltd

Strong Financial Performance in FY 17: Appen Ltd.’s (ASX: APX) stock surged 28.83% on February 21, 2018 after the company for FY 17 has reported 50% growth in the revenue, 62% growth in the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $28.1M and 86% growth in the underlying net profit after tax (NPAT) to $19.7M. Moreover, for FY 18, APX expects underlying EBITDA to be in the range of $50M - $55M. As the stock trades at a very high level, we give an “Expensive” recommendation on the stock at the current price of $10.50
 

NetComm Wireless Ltd (ASX: NTC)

 Surging on growth prospects: Up 18.22% on February 21, 2018, NetComm surprised the market with a strong first half 2018 result. NTC’s operating revenue has been up 89% to $88.6m and EBITDA is up 13x to $9.2m. The revenue mix stands at 85% for M2M Growth Business. NTC also highlighted a strong balance sheet with $13.1m cash and no debt. The group has obtained large orders re FTTC DPU contract with nbn and delivered initial order of fixed wireless units to AT&T. The group has also reinforced its presence in key strategic markets including Europe, UK and North America. Looking at the trading scenario and room for growth, we have a “Buy” recommendation at the current price of $1.33
 

Revenues from Growth Business (Source: Company Reports)

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