Stocks’ Details

Nuheara Limited

Expanding Footprint in International Market:Nuheara (ASX: NUH) is focusing on increasing its footprint in international market after receiving better response of its product mix from the market. To achieve this, the group has recently appointed Value Trade as a key distributor partner to supply and unlock the Japanese retail market with Nuheara’s complete product range.The first phase of Nuheara’s product rollout will begin with 218 consumer electronics stores including famous retailers such as Yodobashi Camera, Ysamada Labi, Bic Camera, Loft, Tsutaya Electrics and Tokyo Hands. In phase two, the Nuheara’s product rollout will commence in the early phase of 2019 and it will include the continued expansion of consumer electronic stores as well as the addition of Hearing and Optical channels such as Aigan Optics, Megane Ichiba, Paris-Miki, Megane Super, Megane Tanaka, Washin Optical, which totals a further 2,500 retail touchpoints. In the same order, the group has also inked an agreement with Force technology with the objective of distributing its product range in Australia and New Zealand market,with a specific attention to brick and mortar retail. Besides this, the group posted strong sales growth in first half of the year with unit sales up by 49% as compared to H2 FY17. On the business segmental front, online unit sales rose 43% while Brick & mortar retail grew by 55% during the same period. With this strong topline growth, gross profit (GP) margin turnaround from (-26%) in H2FY17 to 27% in H1FY18 was noted. Logistics efficiencies also played a significant role in the GP margin improvement with a 60% reduction in shipping costs per unit. Meanwhile, the share price climbed up 56.67 per cent in the past six months at May 31, 2018 and currently trading at slightly above the 52-week low level. Despite the competition from biggies like Cochlear, we believe that the group may continue to improve its financials at the back of synergy benefits from Value Trade and Force technology coupled with cost-effective products with advanced technology. We give an “Expensive” recommendation on the stock at the current market price of $ 0.095, while we watch out for improvements in financials.


Nuheara’s historical go-to market model (Source: Company Reports)
   

Donaco International Limited

Mixed Outlook:Donaco International Limited’s (ASX: DNA) stock rallied up 23.529 per cent on June 01, 2018 following the update on freezing order over its shares held by the Thai vendors of the Star Vegas casino business.According to the release, the Supreme Court of New South Wales has granted a further extension to the freezing order until 2^nd November 2018, when the matter is listed for further directions. Till date, the group has purchased 67,936,51 shares via on-market trade with the consideration of $19,46,841.59 under buy-back event.

On the other hand, the company disclosed its March quarter trading update wherein Star Vegas’ EBITDA was down by 41% to $ 22.98 Mn in 9M against previous corresponding period (pcp) while Aristo International Hotel’s EBITDA declined by 23% on pcp basis. However, Star Vegas business continues to rebuild and recover from the damaging effect of the Thai vendor’s breaches and resulting illegal competitions. During the period, the group has been successful in signing up several new VIP junkets to replace those that left the property last year. We maintain our “Hold” recommendation on the stock at the current market price of $ 0.210.

 
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