Kogan.com Ltd (ASX: KGN)

Brand Partnerships: Kogan.com entered into an agreement with PetSure (Australia) Pty Ltd (PetSure), which is a wholly owned subsidiary of The Hollard Insurance Company Pty Ltd (Hollard) under which Kogan will distribute and promote pet insurance policies under a new brand “Kogan Pet Insurance”. Kogan will now focus on offering a range of affordable pet insurance products and will earn commission on each pet insurance policy issued. Recently, Kogan also entered into an agreement with Medibank Group which enabled Kogan to offer budget health insurance policies under a new brand “Kogan Health” and now Kogan will focus on offering budget health policies while earning commission on sales of all insurance policies. In 2017, Kogan’s revenue was $289.5 m which was 37.1% more than the prior year; and pro forma earnings before interest, tax and depreciation and amortisation was $13.2 m, which is an increase of 230.0% on prior year. The number of customers increased by 36% and touched 955,000 approximately during the year with directors declaring total dividend of 7.70 cents per share which was fully franked. These results reflect management’s strategy so that one should invest in the Kogan.com brand and its expanding portfolio of products and services is delivering both value for customers and return for shareholders. BlackRock Group also became a substantial holder of Kogan.com and held 4,731,516 shares in Kogan.com. The group was also recognised by various rewards which reflected the brand’s standing in the industry like they won People’s Choice Award at the Startrack Online Retail Industry Award Platform. They are planning to launch Kogan Internet and they are also investing in their new Private Label ranges and products.
 
 
 
FY17 Results (Source: Company Reports)
 
Stock Performance: For last six months, the stock price has increased by 206.5%; and with the latest update, KGN moved up 10.3% on December 18, 2017. We maintain a “Hold” on the stock at the current price of $5.46
 

Aconex Ltd (ASX: ACX)

Acquisition Target:  Recently, Aconex entered into a binding Scheme Implementation Deed with Oracle under which it is proposed that Oracle will acquire 100% of the shares of Aconex by the way of Arrangement for A$7.80 in cash per share. After this arrangement, Oracle and Aconex will provide an end to end offering for project management and will effectively plan, build, and operate the construction projects. As of now, Aconex is preparing a Scheme Booklet which will contain all the information relating to the scheme, so Aconex’s shareholders are not taking any action now. 2017 was a significant year for Aconex as it signed 36 new enterprise agreements. It continues to focus on maximising its growth while maintaining positive cash flow and expects revenue to grow to 19% in 2018. For FY17, revenue grew to $161.2 m which was a 36% rise on current basis while EBIDA increased to $15.0m and the group invested $35.1 m or 22% of their total revenue into product development. Vantive Australia Pty Ltd lately became a substantial holder in Aconex by holding 27,123,815 shares.
 

Global Revenue (Source: Company Reports)
 
Stock Performance: In the past six months, the stock price increased by 23.02% and ACX is now trading at high levels with the 44% surge at the back of latest acquisition update provided on December 18, 2017. We give an “Expensive” recommendation at the current price of $7.63

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