5G Networks Limited

 

5GN Details
 
Synergies from Acquisitions & Growing Customer Base are Key Catalysts: 5G Networks Limited (ASX: 5GN) is an Australia-based telecommunication company with a mission of offering a digital experience to the customers and government via data connectivity, cloud and data centre and managed services. The company is also involved in providing high-speed broadband connectivity services to the corporates.
 
Highlights for FY19 Results for the Period Ended 30 June 2019: The company reported FY19 revenue amounting to $51 million, witnessing a growth of 846% year over year.  EBITDA for the period came in at $3.2 million, up 421% on a year over year basis.In the second half of FY19, EBITDA came in at $2.3 million, an increase of 158% from the year-ago period. The company declared a fully franked dividend of 1 cent per share in FY19.
 

Financial Highlights (Source: Company Reports)
 
Key Activities & Highlights: The company concluded and integrated three acquisitions in FY19. Total number of customers for the period increased to 2,500 with robust growth in the B2B mid-market. The company witnessed national expansion to 12 offices and 200 experienced employees. In FY19, around 71% of total revenue was contracted and recurring in nature.
 

Key Highlights (Source: Company Reports)
 
Balance Sheet & Cash Flow Details: The company generated net operating cash flow of $1.31 million for the September quarter 2019. The company exited the quarter with cash and cash equivalents of $3.067 million. For the coming quarter, cash outflow is expected to be $12.805 million.
 
Outlook: For FY20, the company expects revenue to be in the range of $55 million to $65 million and EBITDA, excluding the latest buyouts, is expected to grow in the range of 8% and 12%.The company is also working to enhance the operational efficiencies and is focusing on expanding its network and data centre product.
 
Stock Recommendation: As per ASX, the stock is trading below the average of its 52-week high-low of $1.715 and $0.400, respectively. The stock went up 69.05% and 73.17% on a year to date basis and on a year’s time, respectively. As on 24 December 2019, the company’s market capitalisation stands at ~$46.56 million, with 65.58 million outstanding shares. The company is focusing on continuous expansion via acquisition synergies and organic growth and aims to penetrate deeper into key geographic regions. It intends to increase its customer base with the cross and upsell strategy. Considering the aforesaid facts,we have a “Speculative Buy” rating on the stock at the current market price of $0.730, up 2.817% on 24 December 2019. 
 
 
5GN Daily Technical Chart (Source: Thomson Reuters)
 
 
 

Clean TeQ Holdings Limited

 

CLQ Details
 
Collaboration with Panasonic Corporation Group: Clean TeQ Holdings Limited (ASX: CLQ) is involved in providing metals recovery and industrial water treatment solutions, thereby helping to lower environmental burden. The company uses its Clean-iX ion exchange technology to better serve its clients. On 19 December 2019, Clean TeQ Holdings Limited joined hands with Panasonic Corporation Global Procurement Company. The move is in-line with the company’s long-term vision to work and assist industry players to develop new applications for Scandium Aluminium Alloys.
 
Shareholder Update: On 9December 2019, the company announced the change in its Director’s interest, where Ian Knight has a direct interest in the company. He disposed 40,000 fully paid ordinary shares, subject to regulatory conditions. 
 
September quarter 2019 Highlights: Clean TeQ Holdings Limited provided an update to the market pertaining to its wholly-owned Sunrise Project in New South Wales.The company reported good progress pertaining to its Sunrise Project design and engineering works. It also stated the transition of project implementation to Engineering, Procurement and Construction Management (EPCM) approach. The report also updated investors that Fluor Australia will work with Clean TeQ Holdings Limited to provide a Project Execution Plan. Further, the company stated that it has received a cash payment of $14.6 million as a research and development rebate in July 2019.
 
Cash flow Detail for the Quarter Ended 20 September 2019: In the September quarter, the company reported net cash flow from operating activities of $8.493 million, net cash used in investing activities of $14.209 million and net cash from financing activities of $50k. The company exited the September quarter with cash and cash equivalent of $73.205 million. For the coming quarter, cash outflow is expected to be $26.013 million.
 

Expects Cash Flow (Source: Company Reports)
 
Stock Recommendation: As per ASX, the stock is trading below the average of its 52-week trading range of $0.180 - $0.502. As on 24 December 2019, the company’s market capitalisation stands at ~$160.49 million, with 746.46 million outstanding shares.  The company is focused on finishing two additional major projects at the Fosterville Gold Mine in Victoria and the second one at a copper-cobalt mine in the DRC. The completion of these projects will help the company to demonstrate its suite of proprietary ion exchange technologies for metal extraction and wastewater treatment. Hence, we give a “Speculative Buy” recommendation on the stock at current the market price of $0.220, up 2.326% on 24 December 2019.
 
 
CLQ Daily Technical Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.