Fatfish Group Ltd

Fatfish Group Ltd (ASX: FFG) is a tech venture builder firm. The company owns an extensive network of resources, domain knowledge, and tech expertise across multiple verticals, including Buy-Now-Pay-Later and Online Lending, online insurance, video games and esports, e-commerce and digital entertainment and enterprise cloud and software.

Financial and Operational Update: On 15 December 2021, the company highlighted that its investee company – RightBridge has raised SEK 5 million (A$770,000) by way of a private placement of 3.2% RightBridge shares to Blue Horizon ApS, thus valuing RightBridge at around SEK 150 million (A$23.1 million), providing a substantial upward valuation. Besides, in the quarterly activities report for the quarter ended 30 September 2021 released on 29 October 2021, the company mentioned that FFG holds a strong cash position following the A$8 million financing in August 2021 from US-based Arena Investors L.P. Following the launch of its retail Buy-Now-Pay-Later brand - PaySlowSlow, in the second week of September 2021, the brand has recorded A$50,839 gross merchandise sales within its first two weeks of operations. On the financial front, FFG has recorded a significantly higher net loss of $7.93 million during the six months ended 30 June 2021 compared to a net loss of $6.22 million in the pcp primarily due to one-off share-based payment to executives. Revenue was also reduced to $145,512 from $344,916 in the pcp.

Technical Analysis

Daily Price Chart

Note: The purple color line in the chart depicts RSI (14-period). The sky-blue and green color lines represent 21-Period SMA and 50-Period SMA respectively.

On the daily chart, FFG prices are sustaining above the horizontal trend line support zone and taking support of the same. The momentum oscillator RSI (14-period) is trading at ~55.04 level, indicating positive momentum in the stock. The prices are trading above the trend-following indicators 21-period, which may act as a support level for the stock.  The crucial support level for the stock is placed at AUD 0.0495, while the key resistance is at AUD 0.060.

Stock Recommendation

The company holds cash and cash equivalents of A$8.25 million at the end of the quarter ended 30 September 2021, mainly supported by the completion of the fund raising of A$8 million through the issuance of convertible notes in August 2021. The funds raised will be utilised towards the company’s expansion within the Southeast Asian fintech sector. Further, the company plans for a faster launch of PaySlowSlow across Southeast Asia.

Therefore, considering the facts above and the current trading levels, we give a “Speculative Buy” recommendation on the stock at the closing market price of A$0.052, up 1.96% as of 12^th January 2022.

Creso Pharma Limited

Creso Pharma Limited (ASX: CPH) is mainly based in Switzerland (R&D and marketing), with wholly owned cultivation in Canada and cultivation potential in Colombia. The company holds innovative pharmaceutical-grade cannabis and hemp product portfolio across four categories. Further, CPH holds global distribution agreements. The company, through its subsidiary, is engaged in the development, production, and global marketing of cannabis and hemp-derived products for human and animal health.

Financial and Operational Update: The company, on 11 January 2022 has announced that its wholly owned, Canadian based psychedelics subsidiary, Halucenex Life Sciences Inc. was asked to register as a potential supplier to Health Canada’s Special Access Program, following recent regulatory changes. The approval, if attained, is likely to unlock various near-term revenue generating prospects for Halucenex. Besides, the company, on 6 January 2022, highlighted that it would release an overall 6,802,872 fully paid ordinary shares from voluntary escrow on 14 January 2022 for the consideration payable to the vendors of Halucenex Life Sciences Inc. upon the completion of the acquisition of Halucenex Life Sciences Inc. in July 2021. On the financial front, its wholly owned, Canadian subsidiary Mernova Medicinal Inc. has generated revenue of A$0.666 million during Q4CY2021. The recent revenue from Mernova, coupled with growth from its Swiss operations, has generated overall group revenue of A$1.48 million during Q4CY2021, representing a growth of ~28% on the previous quarter A$1.16 million.

Technical Analysis

Weekly Price Chart

Note: The purple color line in the chart depicts RSI (14-period), while the yellow color line represents the trend line. The sky-blue and red-color lines show 21-Period SMA and 50-Period SMA, respectively. The green-color histogram at the bottom of the charts represents volumes.

On the weekly chart, CPH's prices are consolidating on the lower levels and sustaining below the support turned resistance level AUD 0.100 for the past two months, indicating the possibility of a downside direction. On the weekly chart, the leading indicator RSI (14-period) is trading in the negative territory at ~36.52 levels. The trend-following indicator 21-period SMA and 50-period SMA are sustaining above the CMP and may act as resistance levels for the stock. Now an immediate support level for the is placed at AUD 0.074 while resistance is at AUD 0.100 level.

Stock Recommendation

The company continues to attain favourable advancement across its other key operating divisions in North America and Switzerland. The company’s operating businesses continue to emphasise advancing various initiatives, comprising international expansion, sales growth, and product development. All these initiatives are expected to deliver several growth opportunities for the company.

Therefore, considering the facts above and the current trading levels, we give a “Watch” recommendation on the stock at the closing market price of A$0.084, up 1.204% as of 12^th January 2022.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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