NUHEARA LIMITED (ASX: NUH)

Update on Equity Raising: The small-cap hearing device company, Nuheara Ltd (ASX: NUH) has successfully raised about A$6.0 million at $0.095 per share primarily for funding an increase in inventory levels of IQbuds BOOST™, sales and marketing activities, and mass production and launch of LiveIQ™. The group will also use the proceeds for general working capital. These objectives have been planned for the next 9 months with its LiveIQ™ expected for release in Q4 2018. The group is at the forefront of expanding its geographical retail reach into new major markets such as Japan. It’s only recently that the group signed agreement with Value Trade as a key distributor for Japanese market.

Thus, the equity raising would help the group manage the resources well.

The equity raising demonstrated the strong demand from existing institutional investors and the group is confident in yielding targeted results through developing game-changing and affordable hearing solutions against many expensive options available in the market. The group had touched upon placement of approximately 63.2 million shares at an issue price of 9.5c, with no discount to the 20 day Volume Weighted Average Price (VWAP). Another key aspect that emerged out of the equity raising is the key interest from shareholder Farjoy Pty Limited who also has shareholdings in the ASX listed Battery Minerals and Mineral Deposits. With about 93% rise in stock price in the past six months, the stock looks a bit on the ‘Expensive’ side while we wait for further developments and a suitable entry opportunity as risks from big players still loom over the stock performance. The stock moved up about 4.5% on June 12, 2018 to $0.115.
 

GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED (ASX: GMA)

Gaining momentum: Genworth Mortgage Insurance Australia Ltd (ASX: GMA) was the biggest mover on ASX 200 Index on June 12, 2018 with a 7.3% rise as investors seem to be rebalancing their portfolios at the middle of the year with some boost coming in from Trump and Kim Jong talks as many Asian and Australian shares trended higher. Further, interests are building up with GMA share buybacks that look accretive. Meanwhile, China Oceanwide’s $2.7 billion acquisition of GMA’s parent company, Genworth Financial was approved and this also boosted the stock. The group has now set up a Strategic Program of Work with initiatives earmarked for implementation over the next two years and longer term initiatives to be implemented from 2019 onwards. The group’s 2017 performance indicated underlying Net Profit After Tax (NPAT) (excluding mark-to-market movements in the investment portfolio) of $171.1 million, which was down 19.4% in 2017 compared to 2016 at the back of challenging market conditions. Underlying NPAT for the first quarter of 2018 was $19.9 million owing to 2017 Earnings Curve Review, roll-out of initiatives under Strategic Program of Work; and a mark-to-market loss on equity portfolio. However, with changes in mortgage industry, as also expected to be highlighted in a soon-to-be released report by Mortgage and Finance Association of Australia (MFAA) for ASIC and the government, the group might witness a recovery in performance. We maintain a “Hold” at the current price of $ 2.65.

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