Amaysim Australia Limited
Rising Competition: Amaysim Australia Limited’s (ASX: AYS) stock has fallen almost 42.66 per cent in the past three months with rising competition and following the news on mobile price war wherein its rival TPG Telecom Ltd introduced ultra-aggressive mobile pricing in the Australia market. Based on this, many investors expect that the pricing model (i.e., free access to 4G for six months with unlimited data and then $10 a month) will adversely impact AYS performance in terms of realisation going forward. While there are concerns relating to implementation by TPG and having small cell sites to manage fibre network, AYS is expected to witness an impact in terms of mobile subscribers. On the other hand, the company recently released its first-half results for FY18 and it was observed that the number of subscribers increased by 10% over the prior corresponding period. It was achieved despite an increased competition and the shutdown of the Optus 2G network in August 2017. We expect that the group has potential to grow further at the back of diversification strategy and key strategic investment. Over the year, the group has invested in building a robust brand portfolio which can be extremely useful if the company wants to expand into new product category.
1HFY18 Financial Highlights (Source: Company Reports)
Recently, Escrow shares (604,604 shares) were issued on May 01, 2018 in relation to Amaysim’s acquisition of Click Energy Group Holding Pty Ltd which was subjected to voluntary escrow arrangement. On the other hand, the group informed to the market that FIL Limited and its entities, being a substantial holder of the Group changed respective holding on 17 May 2018 from 9.0 per cent of the voting power to 10.0 per cent of the voting power. Besides this, Investmentaktiengesellschaft für langfristige Investoren TGV (The Investment Stock Corporation for Long-Term Investors TGV) also increased its interests in AYS from 13.03% to 14.26%. In the meantime, we recommend a “Hold” position on the stock at the current market price of $ 0.860, considering strategic investments and its diversified portfolio despite mobile price war running into the Telcom industry. Despite the developments, AYS rose 2.4% on May 25, 2018.
Magnis Resources Limited
Strategic Investment for growth: Up 12.2% on May 25, 2018, positive sentiments are pulling Magnis Resources Limited (ASX: MNS) up given the battery market dynamics. MNS has recently reported about completing NY Battery plant acquisition and increased its ownership to 41% in Imperium3 New York. Production is expected to begin in first half of 2019. This strategic acquisition will bring forward commercial cell production at Huron Campus, New York from the previously indicated end of 2019 year target. Lately in the quarter, the Company had made a strategic investment to acquire a 10% interest in leading US based, lithium-ion battery technology group, Charge CCCV LLC (“C4V”), and secured an exclusive agreement over selective patents, which will assist in driving the Company’s growth in the lithium-ion battery sector. During the quarter, the group has signed a Letter of Intent (LOI) with Siemens to allow collaboration with Magnis and Charge CCCV (C4V) to enhance its lithium-ion manufacturing technology via synchronous approach of digitisation and automation.
Gen II and Solid-State Lithium-ion Battery Technology Roadmap (Source: Company Reports)
Besides this, the cash position for the Company at 31 March 2018 was A$3.47 Mn. The funding position provides a capital base for the future as the Company continues its focus on the lithium-ion battery factory strategy including the responsibility for the end to end supply chain in sourcing the raw materials and associated technologies for lithium-ion battery cells. Moreover, the Company disclosed to ASX that one of its director Frank Poullas had direct and indirect interest in the Company and acquired 35,665 shares via On-market Purchase. Based on aforesaid developments, we maintain our “Hold” recommendation on the stock at the current market price of $ 0.415.
Northern Cobalt Limited
Operational Update: Northern Cobalt Limited’s (ASX: N27) stock climbed up 2.041 per cent on May 25, 2018, while the diamond drilling at its flagship Stanton deposit, which is a part of the Wollogorang project in the Northern Territory, has demonstrated exceptional thick high-grade cobalt intercepts. N27 in fact reported for a 41% increase to its contained cobalt at Stanton. The company recently disclosed its operational updates on Wollogorang Cobalt Project. According to the release, the Wollogorang Cobalt Project has been underway for a major 15,000m drilling program set to commence at the end of May month. Following this development, the style of drilling was said to be modified to use smaller, lighter and more mobile drilling rigs, to allow more prospects to be drilled in a shorter time and at significant cost savings. The findings will be used to identify additional cobalt drill targets over the remaining outcropping areas of Gold Creek Volcanics, host to the Stanton Cobalt Deposit. High priority targets from the new survey will be incorporated into the 2018 drilling campaign. Meanwhile, the stock has fallen 65.25 per cent in the past six months and by 9.26 per cent in past one week as at May 24, 2018. The stock trades close to 52-week low level, hence we maintain our “Hold” recommendation on the stock at the current market price of $ 0.250, while being cautious on the recent downfall and any potential catalysts being worked out with boost from commodity prices.
Northern Cobalt’s Project Map (Source: Company Reports)
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 advice or recommendations.