Liquefied Natural Gas Limited

 

LNG Details
 
Higher Investments & Market Opportunities Key Positives: Liquefied Natural Gas Limited (ASX: LNG) is involved in the business of natural gas and provides consistent, secure, and flexible mid-scale natural gas liquefaction solutions, thereby reducing hazardous environmental effect.
 
Shareholder Update:On 20^th December 2019, the company issued an announcement stating that The Baupost Group LLC, and entities, a substantial shareholder of the company, has reduced his voting power from 9.84% to 7.28%.
 
Financial Highlights for the Year Ended 30 June 2019: Revenue for the period came in at $671K as compared to $326k reported in FY18. Net loss for the period came in at $33.5 million as compared to $22.8 million in FY18.
 
Cash flow Highlights: During the quarter ended 30 September 2019, net cash used in operations stood at $6.8 million, as compared to $6.7 million in the previous quarter. The company exited the quarter with cash & cash equivalent of $14.9 million, as compared to $22.1 million at the end of the previous quarter. The company expects total cash outflows in the coming quarter to be approximately $6.03 million, after making major payments for staff costs & administration and corporate costs of $2.63 million and ~$2.12 million, respectively. LNG project developmentcosts for the quarter are expected to be ~$1.02 million.


Cash Flow Estimates (Source: Company Reports)

Stock Recommendation:The stock is trading below the average of its 52-week low and high of $0.145 and $0.60, respectively. As on 24 December 2019, the company’s market capitalisation stands at ~$109.56 million, with 576.61 million outstanding shares. The company is investing in growth opportunities and expects to benefit from ‘Energy Link’ strategy. Further, the company aims to invest in the development and operation of greenfield LNG sites. Considering the aforesaid factors,we recommend a “Buy” rating on the stock at the closing price of $0.190 per share as on 24 December 2019. 
 
 
LNG Daily Technical Chart (Source: Thomson Reuters)
 
 

OneVue Holdings Limited

 

OVH Details
 
New Payments Platform & Cost Reduction Initiatives to Drive Growth: An Australian financial institution, OneVue Holdings Limited (ASX: OVH), is a wholesale service provider of self-managed super fund, retail and digital member-based investment solutions.

Director’s Interest Update: On 23 December 2019, the company announced that Garry Ronald Wayling, one of the Directors in the company, has acquired 30,000 and 15,000 fully paid ordinary shares for a consideration of $11,599.90 and $5749.90, respectively.
 
Key Highlights of September Quarter 2019: During the quarter, number of items processed soared up 44% year over year. The increase was primarily due to new client transitions and robust organic growth. The total number of Funds administered during the quarter increased by 45% and came in at 1,387 funds. Funds under administration (FUA) for the quarter came in at $5.848 billion, an increase of 28% year over year. Platform services amounted to 36% of total revenues in FY19.  Platform services gross inflows came in at $488 million and net inflows stood at $228 million. 
 

Quarter Highlights (Source: Company Reports)

Cash flow Highlights: In FY19, cash from operations stood at $2.02 million as compared to $3.8 million in FY18. Net cash used in investing activities came in at $8.92 million as compared to $8.28 million in FY18.

Valuation Methodologies:
Method 1: Price to Cash Flow Multiple Approach

Price to Cash Flow Based Valuation (Source: Thomson Reuters)

Method 2: EV/EBITDA Multiple Approach

EV/EBITDA Based Valuation (Source: Thomson Reuters)

Note: All forecasted figures and peers have been taken from Thomson Reuters, NTM-Next Twelve Months

Stock Recommendation: As on 24 December 2019, the company’s market capitalisation stands at ~$97.68 million, with 267.62 million outstanding shares. In 2019, the company expects to roll-out a new payment platform and anticipates a reduction in execution risk and overall cost. The company expects that 2020 will provide improved scale benefits and margin expansion through the material transaction. Considering the above factors, we have valued the stock using two relative valuation methods, i.e., Price to Cash flow and EV/EBITDA multiples and arrived at a target price with upside in % terms. Hence,we recommend a “Speculative Buy” rating on the stock at the closing price of $0.365 per share as on 24 December 2019. 

 
OVH Daily Technical Chart (Source: Thomson Reuters)

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