2 Stocks to benefit from New Revenue Streams – KGN and CCL

Kogan.com Ltd

KGN Details

Launching low cost nbn internet services for fast-growing mobile business: Kogan.com Ltd.’s (ASX: KGN) stock surged 7.4 per cent on April 12, 2018 after the announcement of extending its partnership with Vodafone Hutchison Pty Ltd (VHA) into fixed broadband internet space with the intention of launching nbn services in 2018. As per this agreement, Kogan.com will provide branding and marketing services at competitive price for nbn service while VHA will provide network access and customer service support in Australia. As a result of this, online retailer Kogan.com could become one of the top four telcos in Australia within a year. Further, KGN is offering NBN service plan at 50 Megabit per second download speed for $58.90 per month. It is also offering 12 Megabit per second download speed at the same price with upfront modem charges of $69.
 

Kogan nbn Monthly Plan (Source: Company Reports)
 
Currently, KGN has a priority to acquire strong consumer base, which is expected to result into volume growth in year ahead. During the period, the KGN issued total of 18,013 of Performance Rights to its eligible executives, employees other than directors under Kogan’s Equity Incentive Plan. The stock price is up by 89.8 per cent in past six months as at April 11, 2018. Based on the potential to grow further on the back of cost advantage within the peer group, we give a “Hold” recommendation on the stock at the current market price of $ 9.170.
 

KGN Daily Chart (Source: Thomson Reuters)
 

Coca-Cola Amatil Limited

CCL Details

Amatil X to Create Millions of Possibilities in Future: Coca-Cola Amatil Limited (ASX: CCL) has recently launched Amatil X program, a new platform for emerging possibilities to fuel growth beyond the core business. The Board of the Company has approved an initial investment of at least $10 Mn over the next 12 months that will help to find new sources of revenue growth for the company. According to management, this platform will support the development of concepts, start-ups, and early-stage businesses that “anticipate and address customer needs”. In other words, Amatil X would look for new avenues of growth such as sustainability and changing customer needs and concepts for exploring new ways of getting customers what they want through, for example, new ordering platforms and supply chain technology. Investment opportunity will be delivered through AX Ventures, a multi-million-dollar venture capital program and it will identify opportunities through Xcelerate which will be run by Mr Sullivan’s team and start-up accelerator BlueChilli that will find applications from entrepreneurs and early stage companies to build a pipeline of investable businesses. Additionally, Xponential, an employee venturing program, will help to tap internal opportunity and ideas.
 

Business Strategy (Source: Company Reports)
 
On the other hand, the company delivered underlying net profit after tax (NPAT) of $416.2 million for FY 17, which is broadly in line with the previous year and in line with guidance provided in April 2017. The company’s statutory net profit after tax (NPAT) grew 80.9% to $445.2 million in FY 17. The management believes that Amatil X will set a benchmark for how to bridge the gap between large established corporations and agile and innovative start-ups that will create millions of business possibilities in future. Meanwhile, the stock has risen 11.98% in six months as on April 11, 2018, and, we maintain our “Buy” recommendation on the stock at the current price of $ 8.830.
 

CCL Daily Chart (Source: Thomson Reuters)

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