Stocks’ Details

SportsHero Limited

Launch of new rugby union platform: SportsHero Limited (ASX: SHO), during November 2018, has announced that the group had secured exclusive partnership rights in Malaysia with Spain’s top football division LaLiga.As per the release, SHO’s exclusive LaLiga Malaysian partnership is for the remainder of the 2018/2019 LaLiga season and the 2019/20 season. The partnership is expected to generate rapid user base growth in the Malaysian market, where football is a leading sport with 4.4 Mn passionate LaLiga fans.On February 14, 2019, the company has announced the launch of its rugby union prediction platform and set to capitalise on rugby union’s growing global fan base with its new rugby union prediction platform.
 

1HFY19 Consolidated Income Statement (Source: Company Reports)

The revenues from ordinary activities is up by 100% to $0.373 million in H1FY19 primarily from the competition ticket sales in Indonesia where the company generated sales income of US$0.372 million. However, the net loss of the group for the half year ended 31 December 2018 was US$0.941 million as compared to the net loss of US$2.74 million in the prior corresponding period.

What To Expect From SHO: With the recent launch of Version 3 and commencement of both the LaLiga and English Premier League football seasons, the company has generated an additional AUD$131,000 in revenue and is positioning itself as a significant player in a very rapidly expanding global games market, which is expected to deliver both growth and opportunity for the company going forward.

Meanwhile, the share price has fallen 42.31% in the past three months as at March 01, 2019 and is trading close to lower level.Thus, considering the improving financials in 1HFY19 and launched of new rugby union platform along with secured two former high-profile Wallabies, Mr. Drew Mitchell and 100 tests Caps winner Mr. Matt Giteau as SportsHero Ambassadors, we maintain our “Speculative Buy” recommendation on the stock at the current market price of A$0.075 per share (up 7.143% on 1 March 2019).
 

BrainChip Holdings Ltd

Revenue from continuing operations grew by 252%: BrainChip Holdings Limited (ASX: BRN) has recently come up with a business update and product development. It has increased focus on Akida^TM Product Development. The engineering and marketing resources are focused on the Akida integrated circuit (IC) design.The company is nearing the completion of vendor selection for Application Specific Integrated Circuit (ASIC) manufacturing. On the company restructuring front, it has planned a reduction in spending of US$1.3m to US$1.5m annually. With regard to restructuring and reduction in expenses, BrainChip Studio end-user sales and marketing roles will be eliminated, and discretionary spending will be reduced.

 
AI Acceleration Chipset Forecast (Source: Company Reports)

Overall, the changes implemented in this restructuring are expected to result in a decrease of 10% to 15% of overall planned spending. Further, the revenue from continuing operations grew by 252% Y-o-Y to US$0.94 million primarily driven by revenue recognised in the current year from the GPI agreement.

Introduction of Akida product going forward: Moreover, going forward, the company is committed to the introduction of an Akida product that incorporates technology which benefits the customer with a high-performance, low-power NSoC for inference and autonomous learning in high-volume edge applications.

However, the stock performance remained subdued in the past few months with a negative YTD and one-month return of 29.59% and 21.59%, respectively. Hence, considering decent outlook and strong revenue growth in 1HFY19, we maintain our “Speculative Buy” recommendation on the stock at the current market price of A$0.069 per share (up 7.812% on March 01, 2019).
 

Envirosuite Limited  

Strong ARR growth: Since the beginning of November 2018, the Annual Recurring Revenue (ARR) for Envirosuite Limited (ASX: EVS) has increased by over 45%. The revenues from ordinary activities for the reported period stood at $4.306 million as compared to $1.061 Mn in the prior corresponding period. Net loss for the period was $2.08 million, compared to $1.89 million for the same period last year, a decrease by 10.0%. The prior year included revenues of discontinued activities associated with the divestment of the consulting division.


ARR Growth- FY19 vs FY18 (Source: Company Reports)

What to expect going forward: The existing qualified sales pipeline has line-of-sight to the FY19 ARR target and the focus is on maintaining this momentum to achieve the FY2020 target. The sales team headcount currently is at 16 which is consistent with projections made in previous announcements, having grown steadily from 3 at the commencement of FY18. The company continues to see and budget for a 5-6-month lead time before new sales hires start to close deals.

The company’s stock has posted the return of 14.46% in the time of previous 6 months while, in the time frame of previous three months, the stock’s return stood at 37.68% and is trading at 52-week higher level. Hence, we maintain our “Hold” recommendation on the stock at current market price of $0.095 per share (up 3.261% on 1 March 2019).


Stock Price Comparative Chart (Source: Thomson Reuters)     

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