Afterpay Touch Group Ltd

 
APT Details
 
Strong Performance in the fourth quarter 2018: Afterpay Touch Group Ltd.’s (ASX: APT) stock in one year has grown 368.40% to A$14.38 as on July 20, 2018 as for FY 18 there is 289% growth in the total underlying sales processed through the Afterpay platform to $2.18 billion. The company in the fourth quarter 2018, has reported 171% rise in the underlying sales to approximately $736 m over Q4 FY17 and a 39% increase over Q3 FY18. Since inception, approximately 16,500 retailers and approximately 2.2m customers have been currently live and transacted on the company’s platform. Moreover, the company had launched U.S. business in mid-May 2018  and has posted over $11m of underlying sales in the first full month, June 2018. The company has signed over 400 retailer contracts and over 200 retailers are currently transacting on the platform, which includes major millennial focused brands, URBAN OUTFITTERS (live since 16 May 2018) and REVOLVE (live since 9 July 2018). Additionally, for FY 18, the Group Revenue and Other Income is expected to be in the range of $142m, FY18 Group EBITDA is expected to be in the range of $33m to $34m and FY18 Group EBTDA is expected to be in the range of $27m to $28m. This forecast is subject to audit. As a result, APT stock has been up 154.96% in three months as on July 20, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 15.040.
 

APT Daily Chart (Source: Thomson Reuters)
 

Xero Limited

XRO Details
 
Selected Gusto as Preferred Strategic Payroll Partner in the U.S.:Xero Limited’s (ASX: XRO) stock in five years has grown 208.04% to A$45.99 as on July 20, 2018. The company has recently selected Gusto as Preferred Strategic Payroll Partner in the U.S., which will deliver full service payroll in all 50 states of US for the first time. On the other hand, for FY 18, XRO  has reported 60% growth in net loss after tax to $(27.9) million against $(69.1) million in FY17. The company has achieved for FY 18 positive EBITDA of $26.0 million, compared to $(28.6) million loss in FY17. The company for FY 18 also reported operating revenue growth of 38%, Annualised Monthly Recurring Revenue (AMRR) growth of 33% to $484.4 million and strong net subscriber additions of 351,000, which took XRO subscribers to 1.386 million as at 31 March 2018. Therefore, XRO stock has risen 23.26% in three months as on July 20, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 45.500, ahead of the AGM scheduled for August 16, 2018.
 

XRO Daily Chart (Source: Thomson Reuters)
 

The A2 Milk Company Ltd

A2M Details
 
Cost playing a role over FY19 Outlook:A2 Milk Company Ltd.’s (ASX: A2M) stock has risen 29.5% this year to date to A$9.71 as on July 20, 2018. While not in tech sector to which global stocks like Netflix belong, the company is a significant player in the milk market in Australia with its leading brand a2 Milk having more than a grocery value market share of approximately 9.3%; and this has led the market see the stock as the one that has witnessed great run-up in terms of growth. A2M has trading activities in Australia, New Zealand, China, USA and UK. Further, A2M for FY 18 has reported approximately 68% growth in the unaudited Group revenue to $922 million. A2M expects an EBITDA to Sales ratio for FY18 to be approximately 30% and for FY 19, it is expected to be broadly consistent with the company’s expectations for FY18. Moreover, for FY 19, as the company has completed its planning cycle for the fiscal year, it expects to continue to grow in revenue in respect of nutritional products. The marketing expenditure for FY 19 is expected to be higher than FY18 due to continuing investment in Australia, re-phasing of second half of FY18 activities in China and increased investment for the US market expansion. The overhead costs for FY 19 is expected to be higher than FY18, majorly due to an increasing headcount for China and the Corporate office to support the increasing scale of the company. In FY 19, there will be one-off costs associated with the transition to a new CEO. Meanwhile, A2M stock currently is trading at a high P/E. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 9.58.
 

A2M Daily Chart (Source: Thomson Reuters)
 

REA Group Limited

REA Details
 
Acquired Hometrack Australia:REA Group Limited’s (ASX: REA) stock has risen 17.76% this year to date and in five years the stock has grown 201.85% to A$89.5 as on July 20, 2018. The company runs leading Australia’s commercial and residential property websites and has presence for real estate websites in Europe, Asia and the US. The company has recently updated on acquisition of 100% of Hometrack Pty Ltd for consideration of $130m, and is currently on integration of Hometrack with their own business. The company for the third quarter 2018 has delivered revenue growth of 19% to $186 million and EBITDA growth of 19% to $102 million. This is achieved on back of strong performance of residential and commercial businesses and the inclusion of the financial services business, which was not included in the prior comparative period. The financial services segment was launched in the first half 2018, and expects to deliver FY18 revenue between $26m - $30m and EBITDA between $7m - $11m.
 

Third Quarter 2018 and Nine months’ Financial Performance (Source: Company Reports)
 
Further, the company’s app launches reached a record high of three times more than the nearest competitor with average monthly app launches for the third quarter of 26.1 million. In Australia, realestate.com.au is in number one place for property across all platforms web and app. The average monthly visits to realestate.com.au across all platforms for the third quarter is more than 2.7 times that of the nearest competitor with over 79.4 million visits. As a result, we give a “Hold” recommendation on the stock at the current price of $ 89.140.
 

REA Daily Chart (Source: Thomson Reuters)
 

CSL Limited

CSL Details
 
Raised FY 18 Profit Guidance: CSL Limited (ASX: CSL), a leading global biotechnology manufacturer, saw its stock price move significantly in five years (211.27%) to A$203.20 as on July 20, 2018, followed by a one percent slump on July 23, 2018. CSL lately raised the profit guidance for FY 18, and expects the net profit after tax to be in the range of approximately $1,680 to $1,710 million USD at constant currency. The company was previously expecting the net profit after tax for FY18 to be in the range of approximately $1,550 to $1,600 million USD at constant currency. This is on the back of positive product and geographic sales mix shift, with better than expected sales of Idelvion and Haegarda. Furthermore, the company’s Seqirus had also shown strong performance after a severe northern hemisphere influenza season. The phasing of investments in some of the company’s clinical trials has also yielded a positive financial variance. As a result, CSL stock has risen 27.10% in three months as on July 20, 2018. As of now, we give an “Expensive” recommendation on the stock at the current price of $ 200.830.
 

CSL Daily Chart (Source: Thomson Reuters)

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