Nearmap Ltd

Conversion of Options: Nearmap Ltd (ASX: NEA) is into the provisioning of geospatial map technology for business, enterprises and government customers. The market capitalisation of the company stood at ~A$1.7 Bn as on 28^th June 2019.

Recently, the company with the help of release updated the market about the issuance of 85,500 fully paid ordinary shares on the conversion of options. In another update, Nearmap Ltd announced the rollout of its new product, Nearmap 3D, which provides the customers the ability to stream and export 3D imagery on-demand at massive scale via MapBrowser web application. Adding to that, it is also launching the beta version of its artificial intelligence product. The company’s artificial intelligence technology allows the identification of ground features and detection of change over time.

A look at 1H FY19 Presentation: The group’s portfolio lifetime value has exceeded the level of A$1Bn for 1H FY19. The group sales team contribution ratio stood at 117% in 1H FY19, reflecting a growth of 20% on pcp. The company witnessed a rise of 45% in revenue and stood at A$35.5Mn in 1H FY19 and the group’s subscription churn stood at 6.0% in 1H FY19, which represents a decline of 3% on pcp.

Portfolio Lifetime Value (Source: Company Reports)

Future Aspects:In terms of ACV growth, the company is planning to drive strong growth in the portfolio throughout New Zealand, Australia, Canada, and the US. It is continuing to drive leadership in delivering new products and content. The trading for CY19 is in accordance with the expectations. The company would continue to invest in order to support sustained growth.

Stock Recommendation:For attaining the product leadership, it will invest in data analytics for location intelligence. The gross margin of the company stood at 82% in 1H FY19, reflecting a growth of 2% on pcp. On the stock’s performance front, it witnessed a rise of 146.25% and 33.10% in the time span of six months and three months, respectively and is trading slightly towards a 52-week high level of $4.29. Hence, considering the above-stated facts and decent outlook, we maintain our “Hold” recommendation on the stock at the current market price of A$3.780 per share (down 0.526% on 28^th June 2019).

Audinate Group Limited

Launch of New Products: Audinate Group Limited (ASX: AD8) is involved in the sale and development of digital Audio Visual (AV) networking solutions. The market capitalisation of the company stood at A$507.94 Mn as on 28^th June 2019. Recently, the company via a release announced two new software-focused offerings for Dante, i.e., Dante Embedded Platform™ and Dante Application Library™.  The Dante Embedded Platform™ allows the manufacturers to add full Dante functionality in software, which is running on Linux for Intel and ARM processors while Dante Application Library™ enables the software developers to seamlessly integrate Dante functionality directly into their PC & Mac applications. The company is expecting a revenue contribution to begin during FY20.

The company has recently raised $20Mn via an institutional placement at A$7.00 per new share.It added that the institutional placement was substantially oversubscribed and supported by several high quality existing and new investors. The company will also offer existing eligible investors an opportunity to subscribe for new shares up to a maximum of 2,142 shares per investor under a Share Purchase Plan at an offer price. The SPP would be capped at A$4.0 million.It will use the proceeds to expand global sales penetration and to accelerate recent product initiatives. It is increasing OEM customer adoption. AD8 has grownto 455 OEM customers at 1H FY19. 228 OEM customers have announced products in the market.

OEM Customers (Source: Company Reports)

What to Expect:  For increasing market awareness of Dante products, it is planning to educate end users, system designers and integrators so that they install more Dante products in their AV systems. The company’s Core business growth strategy also revolves around increasing the number of OEMs adopting Dante.

Stock Recommendation:The company is a clear global market leader against the competing audio networking solution providers. With respect to stock’s past performance, it has increased by 33.17% and 128.94% in the time span of three months and six months, respectively. As per ASX, the stock is trading closer to its 52-weeks higher levels. Hence, considering the above-stated facts and current trading levels, we give an “Expensive” rating on the stock at the current market price of A$7.990 per share (up 1.139% on 28^th June 2019).

Volpara Health Technologies Limited

A Quick Look at 2019 Annual Report:Volpara Health Technologies Limited (ASX: VHT) is involved in the sale of VolparaEnterprise, which is a comprehensive cloud-based breast imaging analytics platform that delivers quality assurance and performance monitoring. The market capitalisation of the company stood at ~A$350.79Mn as on 28^th June 2019.

In FY19, the company had acquired MRS Systems, Inc. The company would be able to expand its product portfolio and apply its extensive experience in artificial intelligence and machine learning in order to revolutionise personalised breast care via new technology development. The net cash utilised in the operating activities stood at NZ$10.642Mn in FY19 against NZ$7.715Mn of FY18.

Consolidated Cash Flow Statement (Source: Company Reports)

Future Aspects: The company stated that the key business structures and disciplines are now in place. The company is focused on increasing the US market share with a target of 27% and continuing to grow ARR to approximately US$11.5Mn and to integrate MRS into its operations. It will focus on investing further in research and development.

Stock Recommendation: It also focuses on growing the engineering team in order to accelerate the core functionality of VolparaEnterprise and VolparaDensity. The current ratio stood at 3.69x in FY19, reflecting a growth of 55.2% on YoY basis. This represents that the company has improved its position to address short-term obligations. As per the ASX, the company’s stock is trading towards the 52-week higher levels.With the mentioned developments along with the massive gain of 117.50% in the last one year lead us to have watch stance on the stock at the current market price of A$1.685 (up 2.432% on 28 June 2019) and suggesting that the investors should wait for a better entry level.

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