Stocks’ Details
 

CSL Limited

 
Margins Contraction Witnessed: CSL Limited (ASX: CSL) stated that it will pay an ordinary dividend of AUD 1.20317500, the record date for which was March 14, 2019 and the payment date shall be April 12, 2019. Also, the company has declared its 1H19 results where it reported a double-digit profit growth. It reported sales revenue of $4,505 million, up 11% in constant currency terms on pcp basis. This rise was primarily driven by increased usage of immunoglobulin products for chronic therapies, sales of transformational Hereditary Angioedema (HAE) product and increased sales of adjuvanted influenza vaccine.

Further, the management assumes that there would be sustained demand for plasma and recombinant products.


1HFY19 Financial Highlights (Source: Company Reports)
 
What to Expect From CSL: The company expects NPAT for FY19 to be in the upper-end range of approximately $1,880 to $1,950 million in constant currency terms. The company expects 30 to 35 new collection centres moving forward and this plan is on track.
 
The firm delivered a fall in ROE to 26% for the 1H 19 vis-a-vis 31% in the pcp. In the meantime, the stock price has fallen 4.40% in the past six months. However, the company’s stock is trading slightly towards the 52-week higher level and thus, we might say that the current price has discounted the key growth catalysts. As a result, we maintain our “Expensive” recommendation on the stock at the current market price of A$194.440 per share (up 0.444% on 20 March 2019).
 

Reliance Worldwide Corporation Ltd

 
Strong EBITDA Growth & Improving Balance Sheet: Reliance Worldwide Corporation Ltd (ASX: RWC) has lately announced that Macquarie Group ceased to be a substantial holder of the group since 1 March 2019. RWC’s net sales for the half year ended 31 December 2018 was $544.2 million, implying a rise of 50% on the comparative period. The company’s reported EBITDA for the period was $120.7 million, an increase of 52% on the comparative period. These raises in financial performance are suggestive of the inclusion of the contribution from John Guest for the entire period.


RWC’s Financial Highlights (Source: Company reports)

What to Expect From RWC: As per the management, the outlook for 2H FY2019 is robust enough. The management anticipates John Guest growth to accelerate in the second half, inconsistency with the historic pattern. The lower cost copper (brass bar) to be processed in the second half, is expected to reduce the production costs. Also, there would be an acceleration of John Guest related synergies.
 
On the analysis front, the company has substantially deleveraged its balance sheet, as the debt-equity has been reduced to 0.37x for the 1HY ended 31 December 2018 from the levels of 1.17x reported in the pcp. Moreover, the company delivered robust EBITDA margins of 22.2% in the half-year ended December 2018, depicting the efficiency gained through operational leverage.
 
Meanwhile, the stock price has fallen 15.90% in the last six months and is trading pretty close to a 52-week lower level making it a decent buy opportunity. Hence, considering the company’s focus on deleveraging its balance sheet, robust EBITDA growth over pcp for HY19 and decent price levels, we reiterate our “Buy” recommendation on the stock at the current market price of $4.590 per share.
 

Nearmap Limited

Robust growth in ACV:Nearmap Limited (ASX: NEA) lately posted its H1 FY 2019 numbers whereby, the Annualised contract value (ACV), which is considered the key growth metric, has grown strongly during the period. The ACV grew ~44% on the pcp which was on the back growth in ANZ and the US.  The group’s 12-month churn ratio fell to 6% as compared to 7.5% (FY 2018), depicting the company’s continued focus on customer experience and retention.


NEA ‘s Key Financial Metrics (Source: Company Reports)

What to Expect From NEA: As regards the outlook, the company has stuck to its earlier stated guidance for FY19 to become cash flow break even excluding the effect of any capital raise. The company is Australian business is building on the market leadership and is gaining ample traction in its US business.  The company is very well positioned & has got a unique business model for the long-term growth as the world market for the Geospatial mapping is expected to see expansion at a robust rate and thus expected to reach US$ 10.10 Bn in 2020.

Meanwhile, the stock price has risen by 53.89% over the past six months. Hence, considering the strong traction which the company’s U.S. business is witnessing coupled with decent growth encountered by the company’s ACV, we, therefore, maintain our “Hold” recommendation on the stock at the current market price of $2.700 per share (down 2.527% on 20 March 2019).
 

Nanosonics limited

 
Robust top line growth: Nanosonics Limited (ASX: NAN) has lately reported that Mr Maurie Stang, Non-Executive Chairman of Nanosonics completed an on-market sale of 1,250,000 ordinary shares in the company. Following the sale, Mr Stang continues as one of Nanosonics’ largest shareholders with 18,946,517 ordinary shares representing 6.3% of the Company’s issued share capital. For the HY ended 31 December 2018, the company registered record first half sales of $40.7 million up 36% on pcp and 33% on prior half. This was on the back of a substantial share of capital revenue of $16.4 million which was up 11% on pcp.
 
The free cash flow for the half was $1.6 million compared with $3.9 million in the pcp. Cash flow for the half year was impacted by an increase in inventory of $3.2 million associated with the launch of trophon^®2 and an increase in trade and other receivables.


NAN’s Financial Snapshot (Source: Company Reports)
 
What to Expect From NAN: Going further for FY 2019, the company’s strategic growth agenda continues to be focussed on establishing the Trophon technology as the standard of care in those markets where Trophon is already represented, expanding into new markets as the fundamentals for adoption strengthen with the release of new guidelines and to develop new products focussing on unmet needs in infection prevention.
 
Meanwhile, if we look at the past six months’ performance, the stock has delivered decent return of 38.06%. However, considering the decent outlook & the decent return given by the company’s stock, we maintain our “Hold” recommendation on the stock at the current market price of $4.340 per share (up 1.402% on 20 March 2019).


 
Stock Price Comparative Chart (Source: Thomson Reuters)     

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