iSignthis Limited

ISX Details
 
GPTV and MSF numbers in-line with Expectations:iSignthis Limited (ASX: ISX) operates in remote identity verification and payment authentication along with emoney, transactional banking, IBAN issue and payment processing capability. The company provides an end-to-end onboarding service for merchants, with a unified payment and identity service with the company’s Paydentity™ and ISXPay® solutions.

Recently, ISX released updates for the month of August 2019 and stated that annualized GPTV (Gross Processed Transaction Volume) exceeded A$1.1bn, up 160% from June 2019 as growth from the EU and AU region continued as per expectations. The company also informed that Business Customer approvals grew by 28% to 270 from 210 in 30 June 2019.


Annualized GPTV update (Source: Company Reports)

 H1FY19 Performance Highlights: iSignthis Limited announced H1FY19 results wherein the company posted a revenue of $7.5 million, up 49% on y-o-y. Statutory loss for the period came in at $0.73 million as compared to the loss of $2.93 million in 1HFY18. The company reported Client Funds held during 1HFY19 at approximately $34 million. Merchant Services Fee (MSF) from the EU Tier 1 Network continues to grow as expected in-line with new merchant onboarding and rising processing volumes. In August 2019, the company announced Australian Principal Member licensing agreement with the Asia Pacific (Singapore) based regional subsidiary of Visa Inc. ISX reported $9.9 million of cash balance and total assets at $51.81 million as on 30 June 2019. Net Assets during H1FY19 stood at $12.86 million.

Outlook:The management cited an EBIT target of $10.7 million, excluding non-cash items for the financial year 2019. The company expects healthy growth form Merchant Services Fee (MSF) and Gross Processed Transaction Volume for FY19.

Stock Recommendation:The stock of ISX is trading at $1.020 with a market capitalization of $1.02 billion. The 52-week trading range of the stock stands at $0.105 to $1.765 and currently, the stock is trading above the average price of its 52-week high and low. The stock has generated a stellar return of 64.52% and 292.31% in last three-months and six-months, respectively. The stock price remained volatile during the last five trading sessions and was down 34.82%. Looking at the current business scenario, the company expects to deliver healthy growth from GPTV and MSF during FY19. Considering the results for 1H19, current price movement, and business prospects, we have a watch stance on the stock at the current market price of $1.020, up 9.677% as on 13 September 2019 after falling 34.043% on the previous trading session.

 
ISX Daily Price Chart (Source: Thomson Reuters)

 

Syrah Resources Limited

SYR Details
 
Long-term Business Scenario Remains Positive aided by EV Demand: Syrah Resources Limited (ASX: SYR) is an Australian-based industrial minerals and technology company. Syrah owns and develops the Balama Graphite Project (Balama) in Mozambique. The company is also engaged into selling of natural flake graphite and ongoing development of logistics, sales and marketing arrangements with targeted customers.

Recently, SYR informed that sudden and material decrease in spot natural flake graphite prices in China due to depreciation of Chinese Yuan and Chinese inventory level. Led by these concerns, the company has opted for price negotiations and contract renewals for the business. The company’s production and sales volume during Q3FY19 stood at ~45kt. The weighted average price in Q3FY19 came in at US$400/tons, reduced from US$457/tons during Q2FY19.

H1FY19 Performance Update: SYR recently released first-half FY19 results for the period ended 30 June 2019, wherein the company posted a revenue of US$46.9 million and net loss of US$81.4 million as compared to a loss of US$8.3 million in H1FY18.Net cash outflow from investing activities during the first half of FY19 came in at US$17.8 million, which included payments for progression of the downstream BAM project, and the payment of creditors from production ramp-up activities at Balama. The company reported a cash outflow from operating activities at US$10.2 million at the end of first half of FY19. Cash balance stood at US$64.7 million with total assets at US$420.5 million and net assets at US$380.4 million as on 30 June 2019. During the first, the company produced 92,000 tonnes of graphite as compared to 32,400 tonnes in H1FY18. SYR sold and shipped 101,000 tonnes during H1FY19 as compared to 16,000 tonnes in the first half of FY18. The company had 7,000 tonnes of sales orders awaiting shipment at the Port of Nacala in Mozambique as at 30 June 2019. The company reported sales from natural graphite products worth $46.9 million.


H1FY19 Financial Highlights (Source: Company Reports)
 
Outlook:Production volumes during Q4FY19 are likely to come in at 5kt on a monthly basis. SYR updated that construction of Vidalia Battery Anode Material facility is about to complete and commissioning underway. Despite near term challenges experienced by the raw material battery sector, demand for lithium-ion battery is likely to remain positive. SYR expects a significant growth in the coming years and will continue strategic partnerships and capacity plans across Europe and North America.

Stock Recommendation:The stock of SYR is quoting at $0.515 with a market capitalization of $227.36 million. The stock is trading at the lower band of its 52-week trading range of $0.415 to $2.373. The stock has generated negative returns of 50.63% and 49.93% in last three-months and six-months, respectively. Despite the near-term challenges, the long-term business prospect remains positive aided by growing demand from EV in the coming years. Considering the aforesaid facts along with the recent price movement and H1FY19 operating performance, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.515, down 6.364% as on 13 September 2019.


SYR Daily Price Chart (Source: Thomson Reuters)

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.