MICT, Inc.

MICT Details

Appointment to the Board of Directors: MICT, Inc. (NASDAQ: MICT) operates through its subsidiaries GFH Intermediate Holdings Ltd and its various fully owned subsidiaries, and Micronet Ltd. The market capitalization of the company as on 19 April 2021, stood at ~$182.68 million. As per a recent news update, the company has announced that it has appointed renowned financial executive Robert Benton to its Board of Directors. Mr Benton has replaced Jeff Bialos who has resigned effective 12 April 2021.

FY20 Results Update: The company delivered revenues of $1.2 million in 2020, an increase of ~146% over 2019. It completed the acquisition of GFH Intermediate Holdings Ltd in July 2020. It entered into an agreement to acquire Huapei, a Hong Kong-based securities and investment firm. As per recent reports, it has completed the 100% acquisition of the company. It ended the year with a cash balance of $29 million as of 31 December 2020.

FY20 Financial Performance (Source: Company Reports)

Outlook: The company has launched the insurance platform during December 2020, which has provided revenue comfort in the fourth quarter of FY20 and expects to continue with the momentum in 2021. It also acquired a nationwide license to distribute insurance products throughout China during February 2021. The management believes to reap the benefits of the acquisition in the short term. The company is expected to announce its Q1FY21 results on 14 June 2021.

Key Risks: The company has operations in China and any trade disruptions or trade war might impact the company’s performance.

Stock Recommendation: On 8 March 2021, the company has announced that its subsidiary Micronet Ltd has received a purchase order for 2,000 units of SmartCam connected product from a large client who provides telematics services. The total value of the order is pegged at approximately $0.9 million. The stock of MICT is trading below its average 52-weeks’ levels of $8.45-$0.91. The stock of MICT gave a positive return of ~45.45% in the past one year and a negative return of ~10.61% in the past one week. On a technical analysis front, the stock of MICT has a support level of ~$1.19 and a resistance level of ~$1.94. Considering the current trading levels, improved top-line performance, revenue generation from the insurance platform, receipt of a purchase order for Micronet and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $1.60, as on April 19, 2021.

MICT Daily Technical Chart (Source: Refinitiv, Thomson Reuters) 

Document Security Systems, Inc.

DSS Details

Completion of Equity Investment: Document Security Systems, Inc. (AMEX: DSS) is focused on brand protection technology, blockchain security, direct marketing, healthcare, to name a few. The market capitalization of the company as on 19 April 2021 stood at ~$79.68 million. As per a recent update, the company announced that DSS Biomedical International, Inc. completed an equity investment in Vivacitas Oncology, Inc, which is a clinical-stage company to treat cancers. The investment provides DSS with a rich pipeline of promising assets.

Launch of Alset Solar: The company has recently announced the launch of Alset Solar, Inc for the development of utility-scale solar farms, and provides a clean energy option to polluted or underutilized properties.

Increase of Interest in SHRG: On 1 March 2021 the company has announced that it has increased its investment in Sharing Services Global Corporation, through a $30 million convertible promissory note. The investment will support SHRG for its international expansion plans.

FY20 Performance Update: The company reported an increase in revenue by ~12% to $17.4 million during the year when compared to the prior year. The growth has been aided by the increase in direct marketing revenue to $2.3 million in FY20, compared to revenue of $0.2 million in the prior year. It delivered a positive income of $3.1 million during the year compared to a loss of $2.6 million in the prior year.

FY20 Financial Performance (Source: Company Reports)

Outlook: The company’s investments place it in an advantageous position to leverage the opportunities across its target markets. The company is expected to announce its Q1FY21 results on 13 May 2021.

Key Risks: The company makes investments on a variety of companies and thus is exposed to investment risks as the value of its intangible assets and investments may not be equal to their carrying values.

Stock Recommendation: On 6 April 2021, the company has announced that its subsidiary Impact BioMedical, Inc. has received notice of allowance from USPTO for the Equivir Patent. The stock of DSS is trading below its average 52-weeks’ levels of $13.50-$2.75. The stock of DSS gave a negative return of ~36.84% in the past six months and a negative return of ~12.19% in the past one week. On a technical analysis front, the stock of DSS has a support level of ~$2.7503 and a resistance level of ~$7.066. On a TTM basis, the stock of DSS is trading at a P/BV multiple of 1.1x, lower than the industry average (Basic Materials) of 5x. Considering the valuation on TTM basis and current trading levels, increase in revenues, positive net income from continuing operations and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $2.880, down by ~3.03% as on April 19, 2021.

DSS Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Note: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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