Stocks’ Details
 

Yojee Limited

Capital Raising Program and Increase in Quarterly Revenue: Yojee Limited (ASX: YOJ) is focused on a cloud-based logistics platform which manages, tracks and optimises freight movements along the entire logistics chain. As on 6 March 2020, the market capitalisation of the company stood at ~$34.42 million. The company has recently appointed Mr David Morton as non-executive chairman. During 1H20, the company generated revenue of $0.4 million and reported a loss of $2.4 million. In the same time span, YOJ raised $3.5 million from a share placement program, which will be used to build marketplaces in Asia Pacific and other international markets. 

For the quarter ended 31 December 2019, cash receipts of the company stood at $141k and revenue witnessed an increase of 48% on prior quarter and stood at $186k.


Cash Receipts and Growth in Revenues (Source: Company Reports)

Future Expectations and Growth Opportunities: The company is focused on growing its sales organisation and reduction in operating costs. The company seems to benefit from massive addressable market, targeting Asia Belt and the countries like Singapore, Malaysia and Thailand.

Stock Recommendation: As per ASX, the stock of YOJ is trading very close to its 52-week low of $0.03, proffering a decent opportunity for accumulation. During 1H20, the company witnessed an improvement in EBITDA margin over the previous half. In the same time span, current ratio of the company stood at 4.5x, higher than the industry median of 1.72x. Considering the current trading levels, improvement in EBITDA margin and decent growth opportunities, we recommend a “Speculative Buy” rating on stock at the current market price of $0.033, down by 5.714% on 06 March 2020.

Sportshero Limited

Successful Launch of Kita Garuda App and Strong Balance Sheet: Sportshero Limited (ASX: SHO) is a gamified social sports prediction platform where users can predict, interact and compete on major sports virtually and in real-time. As on 6 March 2020, the market capitalisation of the company stood at ~$5.91 million. During the quarter ended 31 December 2019, the company launched “Kita Garuda” app and is exploring other strategic revenue share options for its white label technology.

The company has recently released its interim results for the period ending 31 December 2019, wherein it reported a revenue of US$1,151 and a loss of US$842K. This was mainly due a conservative accounting stance and all development expenditure of the half year has been expensed. In the same time span, the company reported a strong balance sheet with increase in cash balance to $517k and a growth in total assets to $734k. 


1H20 Financial Position (Source: Company Reports)

What to Expect: The launch of Kita Garuda App will enable the company to cater the needs of different users covering both domestic and international leagues. The integration of Linus technology into the Kita Garuda app has the potential to significantly increase user engagement and is likely to generate more advertising revenue. 

Stock Recommendation: During 1H20, current ratio of the company witnessed a slight improvement over the past year and stood at 0.94x, up from 0.07x. On developing white label digital solution, the company is now able to offer digital solutions across multiple sports. The strong balance sheet of the company with increasing cash balance will allow the company to comfortably make the planned expenditures in the upcoming years. Considering the improvement in current ratio, strong balance sheet and decent growth opportunities, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.018 on 6 March 2020.

VEEM Ltd

VEEM Completes World's Largest Gyrostabilizer: VEEM Ltd (ASX: VEE) is engaged in the manufacturing of products and services for marine, defence and mining industries. As on 6 March 2020, the market capitalisation of the company stood at $61.75 million. The company has successfully constructed the world’s largest and most powerful known gyrostabilizer for delivery to Damen Shipyards. The company has also developed a substantial defence business, servicing both surface and sub-surface combatants.

Significant Increase in Profit: The company has recently released its interim results for the period ending 31 December 2019, wherein it reported an increase of 3% in revenue to $20.9 million and a growth of 34% in profit after tax to $0.9 million. 


Sales of VEEM Gyros (Source: Company Reports)

Growth Opportunities: The company has received increased enquiries and orders for the gyro range and expects FY20 full year sales of approximately $5.5 million. VEE expects to complete its significant work in the second half which is likely to contribute to profit in the later years.

Stock Recommendation: As per ASX, the stock of VEE is inclined towards its 52-week low of $0.440, proffering a decent opportunity for accumulation. During 1H20, gross margin of the company stood at 69.4%, higher than the industry median of 34.5%. In the same time span, EBITDA margin witnessed an increase over the previous half and stood at 13.3%, up from 11.2% in 2H19. On the TTM basis, the stock is trading at a price to book multiple of 2x, lower than the industry average (Industrials) of 3.2x. Considering the current trading levels, higher gross margin and decent growth opportunities, we recommend a “Speculative Buy” rating at the current market price of $0.5, up by 5.263% on 6 March 2020.

 
Comparative Price Chart (Source: Thomson Reuters)

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