Sky and Space Global Ltd

A Look at Recent Updates: Sky and Space Global Ltd (ASX: SAS) had stated they have signed a trial agreement with MTN Nigeria. Both the companies would be examining the potential for integrating the SAS communication solutions into MTN offering and they would also be collaborating together on projects, utilising advanced IoT and narrow band applications in the high-scope African telecommunications market. SAS has also made an announcement that they have sealed Reseller Contract with Cendrawasih Teknologi Nusantara (CTN). As a result of collaboration, SAS’s positioning has been strengthened with respect to fast growing Indonesian market.


1HFY19 Key Financial Numbers (Source: Company Reports)

In half-year ended December 31, 2018, the consolidated loss for SAS after tax from continuing operations stood at $3,182,118 while, in the same period of the previous year, it was $5,077,312. Recently, SAS got signed binding commitments to raise $12 million through two-tranche share placement to sophisticated and professional investors involving $0.03 per share. Also, there are plans that SAS would be conducting fully underwritten priority offer to garner further $3 million, with the ability to accept up to $1 million of oversubscriptions on the same terms after the approval of shareholder.

What to Expect From SAS: The company added that 2019 would be a crucial year and they are preparing the launch of the first batch of Pearl nano-satellites into space, and after this, the company expects to garner revenue from the present customers from several signed agreements which are already in place.

Stock Recommendation: On the daily chart of SAS, Relative Strength Index or RSI has been used and default values were used for the purposes. After observation, it was noted that 14-day RSI has reached the oversold region and soon a rebound can take place. Therefore, the stock price might witness a rise moving forward.  

Also, the company is expected to be supported by strengthening positioning in the Indonesian market and by highly skilled executive management team. The company might also benefit from a decent liquidity position as this would give SAS headroom for growth. However, the company’s stock delivered -50% return in the previous 3 months and -12.50% return in previous one month and is trading close to 52-week lower level. Hence, considering the aforesaid facts and current trading level, we give a “Speculative Buy” recommendation on the stock at the current market price of A$0.029 per share (up 3.571% on 11 March 2019).
 

Crowd Media Holdings Limited

Subscription business Continues to Be Profitable: Crowd Media Holdings Limited (ASX: CM8) generated revenue, interest and other income for the half-year ended 31 December 2018 amounting to $14,009,516 as compared to $21,062,732 in the same period of previous year. The Company has changed the name from Crowd Mobile to Crowd Media Holdings Limited in late 2018. The company’s Q&A business witnessed some headwinds and generated softer than expected revenues. However, the company is developing Artificial Intelligence and Business Intelligence technology so that the growth can be supported. The company’s subscription business posted consolidated revenue amounting to $3,688,171 and this business generally continues to be profitable.

Key Financial Numbers (Source: Company Reports)

Recently, the company updated the market with respect to current JGB debt facility. The company got confirmation that JGB extended the deadline to 31st March 2019 while Crowd Media finalises the refinance of entire JGB debt facility.

What to Expect from CM8: CM8 is presently undertaking operational transition so that it can focus on the core strength when it comes to social media and influencer marketing. In H2 FY 2019, the company’s revenues, EBITDA, NPAT, and Operating Cashflow are expected to be stronger as compared to H1 FY 2019. The company has been shifting its focus on the growing social media marketing industry.

Stock Recommendation: The company’s stock has generated -58.54% return in the span of previous three months, while in the time frame of previous six months, the stock posted the return of -63.83%. However, there are expectations that the company’s revenue would stabilise in 2H FY 2019 on the back of further growth of Media business, continuous utilisation of existing and new products into existing and new markets in both the Q&A and Subscription businesses as well as reduction of operating expenses. Though the company’s stock has delivered negative returns in the recent past, the company is expected to perform better moving forward. Hence, we have a wait and watch stance on the stock at the current market price of A$0.016 per share (down 5.882% on March 11, 2019).

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