SportsHero Limited

A Look at March Quarter Activities: SportsHero Limited (ASX: SHO) released its quarterly report for the period ended March 31, 2019. During the period, there was finalisation of comprehensive and exclusive, strategic multi revenue stream partnership with Football Association of Indonesia, which is the governing body of football in Indonesia, known as PSSI and is 100% owned and controlled by Indonesian Government. The company also secured access to Sports Bookmaker Licence in order to facilitate the Australian launch of a pay-to-play sports prediction platform. These developments will support the top-line growth of the company moving forward.


Net Cash Used in Operating Activities (Source: Company Reports)

In March 2019 quarter, the company’s net cash used in operating activities amounted to A$0.952 million. In accordance with the Binding Heads of Agreement, PSSI had selected and appointed SHO as the exclusive provider and partner to build first official platform, including apps that will incorporate SHO’s gamified sports prediction platform, social media, merchandise/e-commerce, game highlights as well as player access. Also, on January 23, 2019, SHO made an announcement that it had finalised oversubscribed private placement, as a result of which, it raised $1.65 million and it had received commitments for the exercise of August 31, 2019 options, raising an additional of minimum $0.55 million. As at March 31, 2019, a total of $1,256,250 (before costs) were garnered by the company.

What To Expect From SHO: SportsHero had bought forward and incurred significant additional operational and technical expenditure because as earlier as the two transactions (i.e. one with PSSI and another with respect to Sports Bookmaker Licence) are physically implemented, the earlier the revenue could be generated and received. The newly developed PSSI app (which is powered by SportsHero) would soft launch in Indonesia in the month of June 2019 for 2019 Piala Cup Playoffs.

Stock Recommendation: The key margins of SHO has witnessed a significant improvement in 1H FY 2019 on the YoY basis which might attract the attention of market players. Also, the company’s stock price is currently trading slightly towards the 52-week lower level,proffering a decent opportunity for accumulation as the company has a potential to become a dominant social media platform for sport with the support of synergistic partnerships and agreements. In the meantime,the company’s stock had delivered the return of -19.78% in the span of previous three months, while, in the past one month, its return stood at -9.88%. Hence considering the aforesaid facts and current trading level, we have a “Speculative Buy” recommendation on the stock at the current price of A$0.067 per share (down 8.219% on 6 May 2019).
 

Core Lithium Ltd

Increase in Global MRE: Core Lithium Ltd (ASX: CXO) had made an announcement that global mineral resource estimate (or MRE) for its Finniss Lithium Project in Northern Territory had been increased to total 9.63Mt @ 1.3% Li₂O with the addition of initial MRE in respect of Lees Deposit. In addition to new MRE at Lees, the further exploration target of 2 to 3 million tonnes which have the grading between 1.0% and 1.3% Li₂O had been identified by the company at adjacent Lees-Booths Link. The company stated that there is considerable scope to further increase Mineral Resource from additional lithium-rich pegmatites within CXO’s large >500km² of tenure at Finniss.

Net Cash Used In Operating Activities (Source: Company Reports)

In March 2019 quarter, the company’s net cash used in operating activities amounted to A$2.69 million and, in the same period, it incurred A$2.27 million towards exploration and evaluation.

What To Expect From CXO: In June quarter, CXO plans to appoint new marketing commercial manager and it also plans to progress on additional lithium concentrate offtake. The initial Lees MRE happens to be 0.78Mt at 1.3% Li₂O and is classified as Inferred under JORC code 2012. The maiden MRE which has been announced on May 6, 2019 is anticipated to be significantly upgraded in scale as well as in confidence category over the course of 2019, resulting in additional resources with the further drilling.

In the month of December 2018, the company received the commitments to place 60 million new shares involving an issue price amounting to A$0.05 per share in order to garner $3.0 million, excluding costs.The placement got wrapped up in mid-January and led by strong support from the company’s binding offtake partner Yahua and non-binding offtake partner Ruifu which are two of China’s leading lithium producers, who committed to $1.5 million of new equity.

Stock Recommendation: At the end of December 2018, the company’s current ratio stood at 3.20x which is higher than the industry median of 1.62x reflecting that the company is in the strong position to meet the short-term obligations as compared to the broader industry. Therefore, its sound liquidity position might support it in making deployments towards primary business activities. However, the stock’s return in the past 3 months and 1 month stood at -29.31% and -26.79%, respectively. Currently, the stock is trading slightly below the average of 52 week high and low prices of around $0.051. Based on the foregoing, we maintain our “Speculative Buy” rating on the stock at the current price of A$0.047 per share (up 6.818% on 6 May 2019).    

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