Qantas Airways Limited

QAN Details
 
Update on the Level of Foreign Relevant Interest in Qantas Shares: Qantas Airways Limited (ASX: QAN) is expected to benefit from the continuous influx of tourists into Australia. Total Group revenue has been increasing in FY18 year to date at the back of the performance in the domestic market and improvements in the international market (which is still impacted by capacity growth from its competitors). Lately, the group updated that the Qantas Sale Act 1992 (Cth) and the Qantas Constitution provide that foreign persons are permitted to hold relevant interests of no more than 49% of the issued share capital of QAN. As at 29^th December 2017, the foreign persons potentially held relevant interests in 43.60% of the issued share capital of Qantas. Meanwhile, QAN stock has fallen 13.83% in three months as on February 13, 2018 and is trading at a reasonable level. The capacity to leverage the current trends makes this stock a good opportunity to look at. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $5.03
 

QAN Daily Chart (Source: Thomson Reuters)
 

Flight Centre Travel Group Ltd

FLT Details

First half of 2018 outlook: Flight Centre Travel Group Ltd (ASX: FLT) expects the first half of 2018 underlying PBT to be in the range of $120 million to $135 million, which represents a 6% to 19% growth on the $113.2 million underlying PBT recorded during the first half of last year. Therefore, for FY 18, underlying PBT is expected to be between $350 million and $380 million, which represents 6.2%-15.6% growth on last year.  Moreover, the international businesses currently will be the company’s key growth drivers for 2018, with the EMEA and North America businesses on track to surpass their 2017 contributions, when together they posted 30% of group profit and almost 35% of group TTV. Asia, that is now largely a corporate operation, has returned to profit, albeit modestly during the first quarter. “Other” Segment is on track to make a more significant contribution with a larger DMC network in place and the tour operators in particular set to deliver stronger profits after a challenging 2017. New Zealand business is doing good, particularly in corporate travel, while the Australian corporate business is on track. However, in Australia, the first half profit is expected to be slightly down on last year, while the company is making important system changes within the business. We have a “Hold” on the stock at the current price of $49.57
 

FLT Daily Chart (Source: Thomson Reuters)
 

Sydney Airport Holdings Pty Ltd

SYD Details

Sydney Airport Traffic Performance in December 2017: Sydney Airport Holdings Pty Ltd (ASX: SYD) benefits from improving inbound passenger traffic; and the group, in December, reported 2.1% growth in the Domestic passenger traffic, which resulted in 3.5% growth in the total passenger traffic. There was a 5.6% growth in the International passenger traffic in December compared to the prior corresponding period (pcp). This growth in December is due to both seat capacity growth and stable load factors. Further, Malaysian Airlines, Tianjin Airlines and Hainan Airlines all had announced capacity additions in December.
 

Sydney Airport Traffic Performance December 2017 (Source: Company Reports)
 
However, the group suffers from competition from players like Auckland International Airport and may also face challenges from the second Sydney airport. Meanwhile, SYD stock has fallen 11.69% in three months as on February 13, 2018 and still trades at a high level. The group will release its 2017 full year results on February 21, 2018. Given the scenario, we would wait for the result outcome and give an “Expensive” recommendation on the stock at the current price of $6.42
 

SYD Daily Chart (Source: Thomson Reuters)
 

Gentrack Group Ltd

GTK Details

Launched Veovo:Gentrack Group Ltd (ASX: GTK), which is known for developing operation systems for airports and billing and CRM software-based platforms for energy utilities and water companies, has launched Veovo, which is a new brand for its global airport software group. Veovo will unlock the insights across the airport ecosystem and predict the best path forward while quickly connecting all stakeholders and resources to respond, whatever be the situation. GTK has also appointed Tim Bluett as CFO, commencing his role in April 2018. Moreover, the company is targeting 15%+ long term EBITDA growth though the timing of projects may affect the results in any given year. Meanwhile, GTK stock has been down about 10% in last one month given the volatile scenario. While we wait for any key catalyst to help the group achieve its long-term targets, we give an “Expensive” recommendation on the stock at the current price of $5.60
 

GTK Daily Chart (Source: Thomson Reuters)
 

BWX Ltd

BWX Details 

Acquired Andalou Naturals, Inc & Reaffirmed the FY 18 outlook: With growing demand for certain natural Australian products among the tourists, BWX Ltd (ASX: BWX) seem to have gained some traction over the past few years and it also benefits from the travel size products and gift solutions. BWX has completed the acquisition of Andalou Naturals, Inc, in the US from which the company expects FY 18 revenue of US$41m and the pro forma forecast EBITDA of US$8.5m. BWX has projected the annualized cost synergies of US$1m, that is anticipated to be achieved by the end of the first full year of ownership. This acquisition is transformational for BWX’s US operations. Moreover, BWX has agreed to acquire Nourished Life for AU$20m and has the opportunity to launch the platform across many geographies.
 

Brand Distribution across Geographies (Source: Company Reports)
 
Overall, BWX is focusing on the integration and consolidation of the recently acquired businesses. The company has reaffirmed its FY 18 outlook and expects the FY18 EBITDA to exceed the 30.7% growth achieved in FY17. We give a “Hold” recommendation on the stock at the current price of $7.17
 

BWX Daily Chart (Source: Thomson Reuters)

 
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