iCollege Limited

ICT Details

iCollege Limited (ASX: ICT) provides vocational education and offers training solutions of knowledge-based skills to gain employment. The market capitalization of the company as on 22 July 2021 stood at $63.97 million.

Cash Flow and Activity Report for the Third Quarter Ended 31 March 2021 (Q3FY21):

Driven by the domestic student business, which is performing strongly, demonstrated by increases in student numbers for existing qualifications and early interest in new course offerings, quarterly revenue of the company (with no reliance on JobKeeper) stood at $4.55 million, which was 52% compared to the previous corresponding Quarter in FY20. Operating EBITDA during the period stood at $1.02 million. The period witnessed strong progress in Aegis and Pharmacy Guild contracts where till date, over 1,360 have attended training. Cash balance at the end of the period stood at $5.18 million.

(Source: Company Reports)

Result Performance (Half-Year Ended 31 December 2020 – H1FY21)

The company’s revenue from continuing operations for the interim period ended 31 December 2020 stood at $7.86 million, as compared to $7.02 million in the previous corresponding period (pcp). Net Profit after tax for the period stood at $1.22 million, as compared to loss of $107.81k in the pcp. Basic and diluted loss per share for the period stood at 0.226 cents per share as compared to -0.067 cents per share.

Recent Update:

• Recently, the company highlighted that the RedHill Board has recommended its shareholders to continue to ‘TAKE NO ACTION’ in relation to the ICT Offer. ICT has further extended its takeover offer for RedHill until, 23 August 2021, unless withdrawn or further extended in accordance with the Corporations Act 2001.
• In the previous update, the company announced entering into an indicative, nonbinding term sheet in respect of its Off-Market Takeover Offer for RedHill Education Limited (RedHill) (ASX: RDH) shares. Subject to satisfaction with the findings of due diligence, ICT has agreed to an increase in the share exchange ratio for iCollege’s Off-Market Takeover Offer from 7.6 to 9.5 iCollege shares for each RedHill share.

Outlook:

The company is well-placed for the remainder of FY21 and expects to deliver its highest full year revenue and earnings since the listing of iCollege. This anticipation stands on the basis of domestic course delivery in more locations throughout Australia including Perth, Brisbane and Sydney. Moreover, the company is actively pursuing expansion opportunities in New South Wales and Victoria through potential acquisition.

Key Risks:

Any further restrictions on travel ban and international border closure might have an impact on overseas student enrolments which contributes 47% of total revenue.

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

Technical Overview:

Source: REFINITIV 

Note:  The black color line in the chart depicts RSI (14-period). The blue color histograms at the bottom of the chart indicating daily volumes.

ICT prices are trading in a medium term upward trend making higher lows and higher highs on a monthly chart. After tested its 52-week high levels at $0.17, the stock prices are getting correction from higher levels. Prices are now trying to reverse from its 138.6% Fibonacci supply ratio. RSI (14-period) is hovering near to ~47 level, indicating moderate positive momentum. Volumes are showing increasing trend along with increase in prices further indicates active participation in the stock. Now an immediate resistance level for the stock appears at AUD 0.135 while support is at AUD 0.100 level.

Stock Recommendation:

The company’s EBITDA Margin and Net Margin for H1FY21 stood at 22.7% and 13.9%, better than the H1FY20 result of 9.6% and -1.5%, respectively. Current ratio for H1FY21 stood at 1.13x, better than the H1FY20 result of 0.26x, implying that the company possess better capabilities to meet its short-term obligations.

Considering the aforesaid facts and current trading levels, we give “Speculative Buy” rating on the stock at the current market price of $0.110 per share as on 22 July 2021.

OncoSil Medical Ltd

OSL Details

OncoSil Medical Ltd (ASX: OSL) is an Australian based medical device company with an emphasis on treating patients with pancreatic and liver cancer. The market capitalization of the company as on 22 July 2021 stood at $47.04 million.

Quarterly Activities and Cash Flow Report for the Third Quarter Ended 31 March 2021 (Q3FY21)

During this period, the company targeted hospitals in Greater London in the near-term, pushing forward with launch preparation activities throughout Europe including establishing the Osprey registry. Moreover, following OSL’s first ever commercial sale, OncoSil has achieved further sales in New Zealand. Cash balance at the end of the period stood at $15.3 million.

(Source: Company Reports)

Result Performance (Half-Year Ended 31 December 2020 – H1FY21)

The company has reported revenue of around $93k during the H1FY21 and bagged the first commercial sale of its Oncosli device. It sold 9 doses during the period, which includes both commercial as well as non-commercial doses. Its net loss after income tax for the period stood at $4.7 million, as compared to $3.4 million in H1FY20.

Recent Updates

• Recently, the company has appointed Mr. Otto Buttula to the OncoSil Board as a NonExecutive Director effective 20 July 2021. Mr. Buttula is a prominent biotech investor and has more than 30 years of experience in investment research, funds management and information technology.
• In the previous update, the company highlighted that following the submission to the TGA for inclusion onto the Australian Register of Therapeutic Goods (ARTG), it has decided to withdraw the application on the basis that the provision of additional clinical data comparing the performance of the OncoSil device directly with other standard therapies is expected to support the application.

Outlook

The company recently announced that it has received regulatory clearance for its OncoSil device in Hong Kong, enabling OSL to market and sell the OncoSil device in Hong Kong, for the treatment of locally advanced pancreatic cancer (LAPC). The approval marks a key step in OSL’s commercialisation strategy in Asia, following the approvals received in Singapore and Malaysia last year.

The company is looking at bagging required approvals in order to commence commercial sales in Europe. Meanwhile, it has got the formal approval for 9 sites in UK from HRA as well as REC and it is in the last leg of commercialisation of the same. The company has filed humanitarian device exemption with FDA with respect to distal cholangiocarcinoma (bile duct cancer) in July 2020 and is in the process of finalising the data package as requested by the FDA. Besides, the company is mulling at augmenting acceptance in the New Zealand market and for this, it is working with more sites.

Key Risks

The company is exposed to the risks associated with COVID-19 uncertainties. Further, the company is also exposed to regulatory risks, as it requires approvals from health regulatory authorities.

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

Technical Overview:

Source: REFINITIV, Note: The yellow color line represents the trend line while the purple color line in the chart depicts RSI (14-period). The green color histograms at the bottom of the chart indicating weekly volumes.

On a weekly chart, OSL's prices are hovering around a downward sloping trend line breakout for the past 3 weeks, indicating an upward direction for the stock. The recent fall in the stock is not backed by volumes and suggesting the weakening of a downtrend. The leading indicator RSI (14-Period) is trading at 30.87 level and recovered from an oversold zone, further supporting a positive stance for the stock. Now an immediate resistance level for the stock appears at AUD 0.072 while support is at AUD 0.053 level.

Stock Recommendation

The company’s current ratio improved from 7.30x in H1FY20 to 9.47x in H1FY21, implying decent liquidity position of the company. Its Debt-to-Equity Ratio for H1FY21 stood at 0.01x, lower than the H1FY20 result of 0.03x, implying decent leverage position of the company.

Considering the aforesaid facts, and current trading levels, we give “Speculative Buy” recommendation on the stock at the current market price of $0.059 per share on 22^nd July 2021.

Note 1: The reference data in this report has been partly sourced from REFINITIV. 

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined :- 

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest. 

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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