Stocks’ Details

Laybuy Group Holdings Limited

Positive Momentum Continues in Q2 FY21: Laybuy Group Holdings Limited (ASX: LBY) is a fintech company that offers buy now pay later services. As on 26 October 2020, the market capitalisation of the company stood at ~$307.05 million. During the quarter ended 30 September 2020, the company reported decent growth across all key metrics Gross merchandise value of NZ$127.1 million and an increase of 432% in net transaction value to 2.3% of GMV for Q2 FY21 from 0.5% of GMV for Q1 FY21. During the quarter, active merchants of the company went up by 48% (YoY) to 6,323 and active customers totaled 568,000, an uplift of ~95,000 QoQ. In the same time span, revenue increased across the group by 166% to $7.3 million as compared to the pcp, due to increases in GMV.

Quarterly Operational Performance (Source: Company Reports)

Outlook: The company is increasing its market share co-branded marketing campaigns and is seeking to expand in the health, beauty, digital, travel and ticketing verticals. It is focusing on improving operational efficiencies and merchant and consumer experience and is aiming increasing user engagement and repeat purchases through improvements to the Laybuy App.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The company retains a market leadership position in New Zealand and a growing presence in the United Kingdom and Australia. As per ASX, the stock of LBY is inclined towards its 52-weeks’ low level of $1.360. The stock of LBY gave a return of return of 8.6% in the past one month. On a technical front, the stock of LBY has a support level of ~$1.472 and a resistance level of ~$2.1. We have valued the stock using the EV/Sales multiple based illustrative relative valuation and have arrived at a target upside of lower double-digit (in percentage terms). Considering the current trading levels, modest long-term outlook, decent Q2FY21 performance and valuation, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $1.640, down by 6.819% on 26 October 2020.

Emerge Gaming Limited

MIGGSTER Achieves 3 million Pre-Registrations Milestone: Emerge Gaming Limited (ASX: EM1) is engaged in the development and marketing of online eSport and gaming tournament platform technology branded -ArcadeX. As on 26 October 2020, the market capitalisation of the company stood at ~$96.20 million. The company has recently record 3 million pre-registrations and the MIGGSTER Mobile platform is scheduled to launch globally in November 2020.

FY20 Financial Highlights: During FY20, the company generated a revenue of $31.09k, reflecting a substantial fall of 80% on FY19. This was mainly because the platform was under development or in testing in limited live environments. In the same time span, the company witnessed a loss of $1.29 million. During the year, EM1 reported a cash balance of $1.99 million.

FY20 Financial Highlights (Source: Company Reports)

Stock Recommendation: The company has achieved a milestone of 10,000 new subscribers and is setting a new benchmark for future growth. The user adoption metrics show that the platform’s value proposition is appealing to subscribers. As per ASX, the stock of EM1 gave a return of 438.46% in the past three months and a return of 218.18% in the last one month. The stock is currently trading close to its 52-weeks’ high level of $0.170. On a technical front, the stock of EMI has a support level of ~$0.09 and a resistance level of ~$0.016. On a TTM basis, the stock of EM1 is trading at a price to book value multiple of 53.9x, higher than the industry average (Software & IT services) of 15x. Considering the current trading levels, uncertain market conditions and a significant fall in its revenue, we suggest investors to keep an eye on the business activities and give an ‘Expensive’ rating on the stock at the current market price of $0.14, up by 3.703% on 26 October 2020.

Avira Resources Ltd

Paterson Project EM Survey Confirms Significant Conductors: Avira Resources Ltd (ASX: AVW) is engaged in exploration of tin & gold in Queensland. As on 26 October 2020, the market capitalization of the company stood at ~$15.12 million. The company has recently announced that it has received data and results from the Xcite^tm electromagnetic and magnetic survey, which has defined 152 conductive anomalies and coincident magnetic responses. This includes a pipeline target of ~8km strike length trending south west to Aria Cu prospect and Gwardar target of ~9km strike length magnetic and conductive target.

FY20 Highlights: During FY20, the company completed follow up geo-chemical exploration programs over the Pyramid project in Northern Queensland and the acquisition of two tenement packages in the Paterson Range province of Western Australia. In the same time span, the company reported an increase in other revenue to $6,000k, up from $3,159k in FY19 and a fall in loss to $811k in FY20, down from $1.18 million in FY19.

FY20 Financial Highlights (Source: Company Reports)

Stock Recommendation: As per ASX, the stock of AVW is inclined towards its 52-weeks’ high levels of $0.014, and thus retains limited the potential for further growth. The stock of AVW gave a return of 160% in the past three months and a return of 62.5% in the last one month. On a technical front, the stock of AVW has a support level of ~$0.011 and a resistance level of ~$0.0139. On a TTM basis, the stock of AVW is trading at a price to book value multiple of 6.9x, higher than the industry median (Basic Materials) of 2.7x. Considering the current trading levels, risks of investments, and volatile market conditions, we suggest investors to wait for a better entry level and give an ‘Expensive’ rating on the stock at the current market price of $0.013, up by 18.18% on 26 October 2020.

Daily Comparative Chart (Source: Refinitiv, Thomson Reuters)

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 personalised advice.