Stocks’ Summary Table
 

REA Group Ltd (ASX: REA)

Creating new Revenue Opportunities: REA Group Limited is a multinational digital advertising business specialising in property. The Group operates Australia’s leading residential and commercial property websites, realestate.com.au and realcommercial.com.au, Chinese property site myfun.com and a number of property portals in Asia via its ownership of iProperty Group. REA Group Limited announced that realestate.com.au Pty Ltd has entered into an agreement to acquire 100% of Hometrack Australia Pty Ltd subject to ACCC approval. Hometrack Australia is a provider of property data services to the financial sector. Its suite of products includes property data analytics and insights, customised data platforms and an Automated Valuation Model (AVM). The purchase consideration of $130 million will be funded from existing cash reserves and debt of $70 million. Hometrack Australia is forecast to deliver revenue between $13 million to $15 million and EBITDA between $6 million to $7 million for their financial year ended 30 September 2018.


Financial Performance (Source: Company Reports)

There would also be cost synergies realised in the REA business once the Hometrack business is fully integrated into REA’s platforms. It’s an exciting move for its business and a natural extension for realestate.com.au. The acquisition will allow the Group to deliver more property data and insights to its customers and consumers. Meanwhile, Pinnacle Investment Management Group Limited and Pinnacle Investment Management Limited became the substantial holder of the REA Group by holding 8,206,768 securities and 6.23 per cent of the voting power. The Group reported a strong revenue growth of 21 per cent for 1HFY18 on the prior year to $406.8 million. Average monthly unique users of realtors.com’s web and mobile sites increased by 9 per cent on the prior corresponding period to 52 million with mobile representing more than half of all unique users. The stock was up by 11.5 per cent in the past six months and rose up by 3.8 per cent in the past one week. It is worth noting that the stock traded at around $5 in May 2008 and is now 1543% up in last 10 years. We give a “Hold” recommendation at the current market price of $ 83.130.
 

CSL Ltd (ASX: CSL)

Trading at a higher level: For the half year ended 31 December 2017, total revenue of the Group was US$4.1 billion, up 13% when compared to the prior comparative period. Reported net profit after tax was US$1.1 billion, up 35% when compared to the prior comparative period. Specialty product sales of US$717 million grew 20% at constant currency. During the period, Privigen® was approved in the US for the treatment of Chronic Inflammatory Demyelinating Polyneuropathy, the largest Ig indication. CSL Behring’s Hizentra is the market leader in the subcutaneous presentation segment, the fastest growing segment in the Ig market. Last year, CSL acquired 80% of the equity of Ruide from Humanwell. Ruide develops, manufactures and commercialises plasma-derived products for the Chinese domestic market and provides a vehicle for the Group to access this growing market for plasma therapeutics.
 

Debt Maturity Profile (Source: Company Reports)

On the other hand, net Interest Expenses for December 17 were US$52 million and whereas for December 16 were US$38 million. Meanwhile, Ms Fiona Mead was appointed as Company Secretary and Head of Group Governance. Ms Mead will commence in this role on 4 June 2018. The Group recently issued 127,458 fully paid Ordinary shares. John Shine, director of the Company having a direct interest in the Company acquired 226 ordinary shares from the market and and disposed 700 shares through market acquisition under the CSL Non-executive Director Share Plan. The stock has been rising up by 26 per cent since past one year and rallied about 329% in last 10 years. It now looks “Expensive” at the current market price of $172.44.
 

TPG Telecom Ltd (ASX: TPM)

Improvement in Consumer Segment Revenue: TPG is becoming a leading force in the Australian telecommunications industry; and through an extensive infrastructure, TPG provides a diverse range of communication services to residential users, small and medium enterprises (SMEs), government and large corporate enterprises. TPG is excited to announce a major refresh to its range of unlimited mobile plans delivered via its existing MVNO arrangement. Additionally, TPG has removed the SIM fee on these plans which means customers can now purchase the service without any upfront cost other than the first month’s recurring charge. The Aggressive new mobile plans are designed to be among the most competitive month-to-month plans in Australia. TPG has been charging a SIM fee since it entered the mobile market in 2008. But now it has changed its business model by offering $0 SIM and $0 delivery which will encourage more new customers to try out its service. Recently, TPG was rated as the top NBN provider for average download speed in ACCC’s Measuring Broadband Australia program. According to the test findings, TPG achieved an average download speed of more than 90% of the maximum plan speed even during busy hours, beating both Telstra and Optus.


Consumer Segment Performance (Source: Company Reports)

As reported in its 2018 Half Year Results, TPG has more than 341,000 NBN subscribers, growing by over 79,000 subscribers from the end of 2017 Financial Year. The Company reported the Net debt to annualised EBITDA leverage ratio of ~1.7x as at 31 January 2018. The mobile network builds in Australia and Singapore continue to progress well and Capital expenditure outlook on both projects remains in line with initial forecasts. Deployment in Australia is well underway, and sites have already been installed in Sydney and Melbourne. A High density of small cell sites and deployment of Cloud RAN will provide a platform for 5G services. The Company advised that the issue price for shares to be given to the shareholders who were elected to participate in Dividend Reinvestment Plan in respect of the interim FY18 dividend (2.0 cents per share (fully franked)) will be $5.1529 per share and this will be paid on 22 May 2018.In the past three months, the stock price was down by 8 per cent and increased by 2.7 per cent in the last one month. In last 10 years, the stock has moved up by 1617%, and still has potential for further momentum. Therefore, by looking at the overall performance and future potential, we give a “Buy” recommendation at the current market price of $5.640.

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