DigitalX Limited

Expanding Footprint in the US market via Strategic Joint Venture: DigitalX Limited (ASX: DCC) is into providing advisory on global token sale, asset management and blockchain technology development services in places including Perth, Sydney, New York, San Francisco and Malta. Recently, the group posted first half-year performance wherein revenue from operation was down by about 78.3 percent against 1HFY18, while loss after tax for the same period amounted to US$4.17 Mn as compared to the profit of US$8.03 Mn in 1HFY18. This was primarily attributable to lower revenues from token advisory which was consistent with the overall market trend for crypto assets.

During the same period, the group launched an incorporated joint venture “DX Americas” with the US Investment Bank AmerX to service the Security Token Offering (STO) market. Moreover, DigitalX reported cash, listed digital assets and fund units of ~US$6.1 million in value at December 2018 quarter end. The Company made significant investments in the Perth Blockchain Centre and the Asset Management division during the quarter which have laid the foundation for the success.


Key Numbers (Source: Company Reports)

What to Expect From DCC: Going forward, the company remains at the forefront of research and activity in the blockchain and crypto asset market on the back of building its global brand within this emerging sector. The establishment of the Perth Blockchain Centre is evidence of the commitment towards the technology and the growth of the industry over the long term. With the maturity of STO market over 2019, the company is well placed to provide services and remains leveraged to an uptick in activity in crypto-assets.  

Meanwhile, the stock price has fallen by 57.39% in the past six months and is trading close to its 52-week low level. On the balance sheet front, current ratio substantially increased from 13.5x to 22.05x in 1HFY19 over the prior corresponding period. By looking at its decent liquidity position, strong business strategy to execute its plan effectively via its four business verticals and expanding footprint in the US market via strategic joint venture with AmerX, we have a “Speculative Buy” recommendation on the stock at the current market price of $0.048 per share (down 2.041% on March 06, 2019).
 

Creso Pharma Limited

Repeat Purchase, Geographic Expansion Aided CPH: Creso Pharma Limited (ASX: CPH) mainly focusses on providing pharmaceutical expertise through delivery of the highest quality products in the cannabis domain.It is developing a foothold in many markets and aims to offer a diversified portfolio of solutions globally.

Recently, the company has announced that 2,053,025 fully paid ordinary shares and 303,027 Performance Shares will be released from voluntary escrow on Wednesday, 20 March 2019.The securities to be released from voluntary escrow are comprised of 2,053,025 Shares of the 8,212,121 Shares issued to the vendors of Kunna Canada Ltd upon the completion of the company’s recent acquisition of Kunna Canada Ltd on 20 December 2018 and 303,027 Performance Shares of the 1,212,120 Performance Shares issued to the vendors of Kunna Canada Ltd, which are subject to vesting conditions.


Key Information (Source: Company Reports)

The total product sales increased by 510% from $91,609 in 2017 to $558,382 in 2018 for the year ended. The company’s revenues were supported by repeat purchase and geographic expansion as well. The net loss of the company however was reported at $16.75 million in FY18 as compared to $15.07 million in FY17. This was primarily on the back of higher operating expenses.

What to Expect From CPH: The primary focus of the company’s strategy is to build a global brand.Creso started by introducing its hemp CBD formulas to markets that readily accepted the commercialisation of CBD products. Many of these markets are still defining their position on CBD, hemp, medical or recreational cannabis. Creso will also introduce products with hemp seed oil but without CBD into emerging markets like Indonesia and Thailand.

Meanwhile, the stock price has fallen by 38.02% in the past six months and generated negative YTD of 30.56%. However, introduction of products andimproving financials of the company would be positive for the company going ahead. Hence, we have a “Speculative Buy” recommendation on the stock at the current market price of $0.375 per share as it is trading at close to lower level.
 

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