SportsHero limited

 Strategic Partnerships with The Leading Brands- A Catalyst for Turnaround: SportsHero Limited (ASX: SHO) has, via a recent release, announced that it has entered into a non-binding pact with Cross Bet holdings Pty Ltd for the purpose of enabling it to launch its existing betting platform in Australia. This is called a Pay-to-Play Venture of the company. Both the companies would jointly incorporate a new Joint venture on a 50/50 Equity basis, so as to operate this new company.

For the quarter ended 30 September 2018, the company earned a revenue of $229K. On account of the partnership with Walletku which aided them in rolling out an Indonesian 2018 World Cup campaign, the company had generated gross revenue of $157k in the 4 weeks of the World Cup competition. Also, the company has entered into a very prestigious partnership with Spain’s top football division La-Liga the that will provide the company with all the IP rights and support.On account of this, the “LaLiga Hero of the month competition” which was started in Indonesia generated revenue of $122k for month.


 
SHO’s Financial Snapshots (Source: Company Reports)
 
Partnership With e-pay to Support SHO: Going further, the company is slated to launch the third sport- “Cycling” on the company’s platform. This launch will take place in the first quarter of the Year 2019. Also, the partnership with Malaysia’s leading retail payment network e-pay will help the company in reiterating its successful revenue model that was earlier launched in Indonesia.
Meanwhile, the stock price has fallen by 11.54% in the past three months as on 14 January 2019. Thus, considering the strategic partnerships with leading brands, a turnaround in the operations is expected in the times to come. Considering the above-mentioned factors, we maintain  our “Speculative Buy” recommendation on the stock at the current market price of $0.115.
 

DigitalX Limited

 
Emerging opportunities in crypto asset management space: DigitalX Limited (ASX: DCC) has recently released its business presentation in which it stated that the company had launched its first ever digital asset investment product/instrument. This would be a proprietary index fund that will deploy in the top ten digital assets by the market capitalization with the goal of outperforming the market cap weighted index by over a period of 5 years.

For the quarter ending 30 September 2018, the company had cash of US$5.4 Mn at the quarter end (i.e. September 2018 quarter). Due to the increased volatility, which was pretty evident in the cryptocurrency market, the company’s treasury management plan emphasised upon delivering the increased cash as well as Bitcoin to company.


DCC’s Working capital position at the end of September Quarter (Source: Company Reports)
 
Partnerships to Support DCC Moving Forward: Going forth, the company sees immense opportunities in the domain of crypto asset management, thanks to the strategic partnership it has entered which will aid it in leveraging its technical expertise within the industry. As the blockchain has been a disruptive technology, the emergence of the crypto asset management is anticipated to help the company in being the first mover in this space.
On the financial metrics front, the company has a pre-tax margin of 24.3% as compared to the Industry median of 20.2%. Also, the company is generating a ROE of 52.2% while the Industry median stood at a mere 20.2%. These all parameters suggest that it is a growth stock as it is growing at a much better pace as compared to the concerned industry. Meanwhile, the stock price has fallen by 51.09% in the past six months as on 14 January 2019 and trading close to lower level. Therefore, considering the emerging opportunities in crypto asset management space and better than industry margins, we maintain our “Speculative Buy” recommendation on the stock at the current market price of $0.046 (up 2.222% on 15 January 2019).
 

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