Triterras Inc

Triterras Inc (NASDAQ-GM: TRIT) is a US-listed financial technology Company. The Company is focused on trade and trade finance through Kratos, a blockchain-enabled digital platform for commodity trading and trade finance.

Investment Highlights - Triterras Inc – Avoid at USD 7.54

• Despite the improved performance in nine months period of FY2021, the Company remained cautious towards developments related to covid-19 pandemic.
• In the last six months, the Company delivered a negative return of ~29.14% and delivered lower returns compared to the benchmark Index.
• As per valuation metrics, the EV/Sales and Price/Earnings multiples of the Triterras Inc are currently higher as compared to the corresponding multiples of the Investment Banking & Investment Services industry, reflecting overstretched valuations.
• From the technical standpoint, 14-day RSI is supporting a downside move (around 55 level), which means the stock price could decline in the short term.

Key Risks

• Increased competition could reduce the number of available investment opportunities.
• The Company is also exposed to various operational and financial risks with cybercrime, regulatory changes, and foreign exchange fluctuations.

Recent News

On 30 March 2021, Triterras announced the selection of three senior-level professionals with expertise in Credit Insurance, Business Development and Fund Origination.

Business Update (released on 22 December 2020)

In the third quarter of the financial year 2021, the Company expects revenue to be around $17 million and net income of around $10 million. For financial year 2021, the Company expects revenue and net income to be around $56.6 million and $32.9 million, respectively.

One Year Share Price Chart

(Source: Refinitiv, Thomson Reuters)

Conclusion

The Company’s revenue and net income for the third quarter of the financial year 2021 stood in line with the market expectations. The Company remained focused on growth initiatives to increase volumes on the Kratos platform and diversify trading partners. Triterras may be dependent on external funds to meet working capital needs and other development activities in near future. The Company’s operational performance was also impacted by the outbreak of the covid-19 pandemic due to travel restrictions, temporary closure of office buildings and quarantines. The stock made a 52-week low and high of USD 5.86 and USD 15.45, respectively.

Based on the above rationale, we have given an “Avoid” recommendation on Triterras Inc at the closing price of USD 7.54 (as on 7 April 2021), and with support from few catalysts needs to be evaluated at a later stage such as benefit of expansion of senior team.

Moleculin Biotech Inc

Moleculin Biotech Inc (NASDAQ-CM: MBRX) is a US-listed clinical-stage pharmaceutical Company. The Company is focused on the treatment of cancers and viruses with high resistance.

Investment Highlights - Moleculin Biotech Inc – Speculative Buy at USD 3.86

• Being in the development stage, the Company has a strong liquidity position and well-positioned balance sheet to meet working capital needs.
• In the last one year, the Company delivered a decent return of ~14.33% and delivered higher returns compared to the benchmark Index.
• As per valuation metrics, Price/Book value multiple of the Moleculin Biotech Inc is currently lower as compared to the corresponding multiple of the Biotechnology & Medical Research industry. It reflects, shares are undervalued as compared to the industry.
• From the technical standpoint, 14-day RSI is supporting an upside move (around 41 level), which means the stock price could increase in the short term.

Key Risks

• Any change in regulations and government policies could affect the overall business of the Company.
• The covid-19 outbreak has resulted in supply chain disruptions which will have a negative impact on the Company’s performance.

Recent News

On 6 April 2021, Moleculin Biotech announced the engagement of IQVIA Biotech to manage the clinical trials of WP1122 for the covid-19 treatment.

Financial Highlights – FY2020 (31 December 2020) (released on 24 March 2021)

(Source: Annual Report, Company Website) 

• For the financial year 2020, the Company did not generate any revenue and witnessed an increase in expenses for the period.
• Due to higher expenses, the profitability for the period declined. The Company reported higher loss from operations and net loss of $19,742 thousand and $17,355 thousand, respectively.
• The cash balance as on 31 December 2020 improved to $15,173 thousand (31 December 2019: $10,735 thousand).

One Year Share Price Chart

(Source: Refinitiv, Thomson Reuters)

Conclusion

The Company has shown a decline in financial performance in the financial year 2020. The Company is in the development stage and hence rely on grants and cash balances to carry on all the business activities. The operations are financed by the sale of equity securities by private placements. The Bottom-line performance has declined, with profitability remained in the negative zone. Moleculin Biotech’s operational performance was not materially impacted by the impact of the covid-19 pandemic, while it resulted in the delay in clinical trials, increased costs and disruption in the supply chain. The Company is focused on driving growth across the platform and executing business objectives through collaborations. The stock made a 52-week low and high of USD 3.16 and USD 11.82, respectively.

Based on the above rationale, we have given a “Speculative Buy” recommendation on Moleculin Biotech Inc at the closing price of USD 3.86 (as on 7 April 2021).

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