NetLinkz Limited
Signing of MOU:NetLinkz Limited (ASX: NET) is engaged in the delivery of virtualized network services through a Virtual Services Platform. Recently, the company via a release dated 11th July 2019, announced that it had inked a memorandum of understanding with iSoftStone Information Technology (Group) Co. Ltd for establishing a joint venture company in China to distribute and sell products developed from the Beijing IoT Lab.
In the release, it was mentioned that iSoftStone Information Technology (Group) Co. Ltd has agreed to purchase a minimum 100,150 VINs for its existing customers from the joint venture company once it is established. As per the deal, ISS and NetLinkz will both contribute equity capital funds for the join venture. Importantly, NetLinkz Limited will earn a royalty and dividend from the joint venture company. At the quarter ended 31st March 2019, the net cash used in the operating activities stood at A$0.384 Mn. During the quarter, the company made payments of $0.514Mn for research and development.
.png)
Cash Flow Statement (Source: Company Reports)
What to Expect:With respect to US Go to Market Strategy, it is developing a business model with San Diego based Blue Tech Inc, which is like its partnership with iSoftStone. Adding to that, Blue Tech Inc has started testing the cyber security functionality and robustness of the latest version of NetLinkz software.
Stock Recommendation: The company stated that the options exercised by investors have provided additional capital which would be allocated to accelerate the Go to Market Strategy in partnership with iSoftStone. Coming to the stock’s past performance, it produced massive returns of 202.20% and 957.69% in the span of three and six months, respectively. As per ASX, the stock is trading closer towards its 52-week higher levels of $0.355, which increases the probability for a correction in the near term. Hence, considering the aforesaid facts and current trading level, we have a watch stance on the stock at the current market price of $0.255 per share (down 3.774% on July 18, 2019) and suggesting that investor should wait for better entry levels.
Splitit Payments Ltd
Signing of Agreement: Splitit Payments Ltd (ASX: SPT) provides a credit card based instalment solution to businesses and merchants. The market capitalisation of the company stood at ~$156.84 million as of 18 July 2019. The company published a presentation, wherein it communicated that Splitit Platform Augments Visa Strategy. The visa trialling technology that will allow individual card issuers to develop their own instalment plan solution. The open API’s allow issuers, acquirers and third parties like Splitit to access and build improved customer experiences. In the release dated 1st July 2019, the company announced that it had inked an agreement with Kogan.com Limited, to provide its unique instalment payment solution for online purchases in Australia via Kogan.com website.
In the release dated 24th June 2019, the company provided information about the completion of its share purchase plan. The company added that it has issued to SPP participants 377,500 new shares at $0.80 per new share, garnering $302,000.
The total amount raised under the Placement and SPP Offer is around $30.3Mn. The proceeds would allow the company to increase its capacity to meet the current excess demand for its products and to pursue its growth strategy at a faster rate than was expected in its initial public offering prospectus. The following picture provides information about active merchants (cumulative) and unique shoppers (cumulative):
.png)
First Quarter Results (Source: Company Reports)
What to Expect: The company has identified several target countries to focus its sales and marketing efforts, with a focus on the US, Canada, UK, Italy, Singapore and Australia. It would focus on the five key industry verticals such as Medical, High-End Fashion, Sports Equipment, Home Goods & Electronics and Travel & Leisure.
Stock Recommendation:It expects the instalments to become a foundational method of payment at checkout for domestic and cross border commerce payment transactions. Coming to the stock performance, it produced negative returns of 34.25% and 60.82% in the time span of one month and three months, respectively. Currently, the stock is trading close to its 52-week low level of $0.305, indicating a decent opportunity for accumulation. Hence, in the view of above-stated facts and current trading level, we give a “Speculative Buy” recommendation on the stock at the current market price of A$0.490 per share (down 3.922% on 18th July 2019).
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.