3 Small-cap Stocks to watch – NUH, SMP and YOJ

 

Stocks’ Details
 

Nuheara Limited (ASX: NUH)

Australian Government registers Nuheara to its Hearing Program: Australian Government has approved Nuheara as a registered device supplier under the Hearing Service Program (HSP, which enables eligible Australians have access to free and subsidised hearing devices and respective services). In the 2017-18 Federal budget, HSP was allocated with $539 million and the forward year estimates were $566 million for funding. As HSP provides an access to free and subsidised hearing devices to eligible Australians, the registration of Nuheara as a supplier to the HSP was a significant development for the Company which demonstrates that its innovative hearing solutions are being recognised as a cost-effective option by the Australian Government. This secures Nuheara’s mainstream position in the rapidly changing global hearing health care market. The Company will place both IQBuds (wireless earbuds) and IQBuds Boost on the Device Scheduled as Assisted Listening Devices. Meanwhile, the Company has issued a total of 9,500,000 fully paid ordinary shares under the notice issued pursuant to Section 708 A(5)(e) of the Act. The stock price surged up by 36.4 per cent on 16 March 2018 at the back of this approval but trades at a higher level. Further, competition from players such as Cochlear is intense. Meanwhile, the group reported a decent 1H18 revenue while its loss has widened. We believe that the stock is “Expensive” at the current market price of $0.135
 

Global Retail Stores (Source: Company Reports)
 

Smartpay Holdings Limited (ASX: SMP)

Partnership with Alipay can be a catalyst for growth: Up 9.8% on March 16, 2018, Smartpay has signed a cornerstone agreement with Alipay, China’s largest online and mobile payment provider. Alipay’s mobile wallet users will soon be able to pay by Alipay through Smartpay EFTPOS terminals across both Australia and New Zealand and will make Smartpay the first acquirer in both countries that will provide dynamic QR payment solutions through an integrated terminal offering. The partnership with Alipay aligned the Smartpay’s strategy so that it becomes a leading independent financial transaction acquirer in Australia and New Zealand. Smartpay actively engages with marketing partners who provide solutions to the merchants that drive the targeted marketing campaigns directly to Alipay users before and during their visits. Smartpay are early adopters of Alipay in Australia and New Zealand and are well-positioned to be benefitted from the high growth from Chinese visitor market. On the other hand, the group updated that the proposed Pemba Transaction (on non-binding and conditional offer received by SMP) is not to proceed ahead. While the stock trades at a higher level post a rise of36.67 per cent in the past five days, it is an interesting one to watch for trends in digital industry. As of now, we give an “Expensive” recommendation at the current market price of $0.225
 

Sales Performance in Australia and New Zealand (Source: Company Reports)
 

Yojee Limited (ASX: YOJ)

Integration of Blockchain Services: Yojee’s stock rose up by 10.5% on March 16, 2018 while the group entered into a pilot services agreement (Pilot Agreement) (via its wholly owned subsidiary, Yojee Ops Pte Ltd) with UPS Asia Group Pte Ltd (UPS) (a subsidiary of United Parcel Service, Inc.) to establish a proof of concept for the use of Yojee’s blockchain technology in the UPS specific supply chain environment. Yojee will deliver the Pilot by early 2018 (unless extended), while no revenue will be derived by Yojee from the Pilot Agreement. Blockchain has enormous applications in the freight and logistic industry; and the group through this technology, aims to deploy technology-enabled operations and will provide maximum efficiencies. It will help in identification of the applications of the new technologies for its business. As per the latest S&P/ASX March Quarter Index Rebalance, YOJ has been added to All Ordinaries effective from March 19, 2018. The stock price has risen by 36 per cent in the past six months with a fall of 27% in last three months. While it is an interesting stock to watch, we avoid the investment at the current price of $0.21, given the level of volatility.

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