Payright Limited

PYR Details

Strong Growth in GMV’s: Payright Limited (ASX: PYR) is present in Buy Now Pay Later (BNPL) segment. The company offers in-store credit, point of sale and online BNPL payment options through participating merchants. PYR allow consumers to make a purchase through an approved Merchant at the time of sale or to pay for the product or service over a period, based on arranged loan repayment terms. PYR has registered a growth in Gross Merchandise Value (GMV) across various sectors they are present in after restrictions lifted on trading. The education sector has seen a growth of 46% QoQ in December 2020 quarter, after a decline in growth in September 2020 quarter by 21% QoQ, affected by Covid-19 situation. The home improvement sector along with Retail, Health & Beauty, Photography and Automotive has seen a consistent growth from past couple of quarters.  

Financial Highlights for 1HFY21: PYR has posted an increase in total revenues by 38% YoY at $5.8mn in 1HFY21. The growth in revenues is mainly due to growth in Gross Merchandise Value (GMV) which indicates a growth in active merchant and customer base. An increase in operating costs by 17% YoY to $7.5mn in 1HFY21 has resulted in EBITDA operating loss of $1.7mn and a net loss of $4.8mn during the same period.  

GMV Growth QoQ (Source: Company Reports)

Outlook: PYR, as a Buy Now Pay Later (BNPL) player has seen a growth of 3% in 2018 and 8% in 2019 in Australia, the company is expecting this growth to reach at 17% by 2023. 

Stock Recommendation: In the last one month, PYR has decreased by 28.49%. The current market capitalisation of PYR stands at ~$68.60mn as on 18 March 2021. The stock is currently trading at par with its 52-weeks’ low level of $0.715. On the technical analysis front, the stock has a support level of ~$0.71 and a resistance of ~$0.79. Considering the increase in loans and borrowings as at 31 December 2020, registering losses in 1HFY21, low market capitalisation, and recently listed on the stock exchange, we would wait to assess any further developments in the company. Hence, we recommend an “Avoid” rating on the stock at the current market price of $0.715, down by 7.14% as on 18 March 2021.

PYR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

VGI Partners Limited

VGI Details

Increased Funds Under Management: VGI Partners Limited (ASX: VGI) is a wealth manager based in Australia. The company manages global equities funds under management (FUM). The Company manages its funds via dedicated portfolio mainly comprising of long-term investments and short positions in global listed securities and cash. VGI has seen a growth in Funds Under Management (FUM) at the start of FY21. The company has up to $3.3 bn of funds as at 19 February 2021 as compared with $3.1bn at the end of 2020. The company has grown almost three times since FY16 (~$1.0bn of FUM) in terms of FUM.

Financial Highlights for FY20: VGI has posted a decline in operating revenue to $63.8mn in FY20 vs $69.0mn in FY19, on the back of decline in performance fees. VGI was able to lower its operating costs from $21.0mn in FY19 to $19.2mn in FY20 due to lower traveling, IT, and research cost. The company has paid a final dividend of 28 cents (fully franked at 30%) on 11 March 2021. 

Funds Under Management (Source: Company Reports)

Outlook: VGI is expecting to keep its dividend payout ratio in a range of 50%-75% of Profits after Tax depending on the performance of the fund.

Stock Recommendation: In the last one month, VGI has decreased by 1.39% and increased by 5.40% in the last three months. The current market capitalisation of VGI stands at ~$539.40mn as on 18 March 2021. The stock is currently trading below the average of its 52-weeks’ price level range of $6.0-$10.95. On the technical analysis front, the stock has a support level of ~$7.45 and a resistance of ~$8.02. On a TTM basis, the stock of VGI is trading at an EV/Sales multiple of 9.4x, lower than the industry average of 10.5x. Considering the company has posted increased funds under management, decline in operating cost, payment of dividend to its investors, and current trading levels, we recommend a “Hold” rating on the stock at the closing price of $7.80, up by 0.905% as on 18 March 2021.

VGI Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Bailador Technology Investments Limited

BTI Details

Pickup in Portfolio Growth: Bailador Technology Investments Limited (ASX: BTI) is engaged in managing a portfolio of information technology and media sectors. The company predominantly invests in businesses within the technology sector that are seeking growth-stage investment. The company focuses on software, Internet, mobile, data, online marketplaces, and telecom related businesses. BTI has registered a 10% revenue growth in its portfolio. The companies within BTI portfolio have exhibited a strong business performance. Instaclustr has been revalued with a growth of 42% on the back of strong operating performance. Stackla is valued at $11.5mn in September 2020 from Nil in the previous 12 months period on strong business performance. Moreover, Straker valuation is up by 71% over HY21, mainly due to translation agreement with IBM.  

Acquisition Update: Instaclustr, BTI’s portfolio company has announced about the acquisition of Credativ. The acquisition will considerably provide financial and operational growth for Instaclustr. Credativ is present in Germany and the USA, through which Instaclustr can get access to the new technologies, thus increasing Instaclustr’s total addressable market. Instaclustr remains an outstanding performer in Bailador portfolio. The company has further strengthened its strategic position by adding the competencies offered by Credativ.

Agreement to Sell Investments in DocsCorp: BTI has announced on 17 March 2021, regarding its completion of cash realisation of DocsCorp. The company has previously announced on 24 February 2021 to sell its investment in DocsCorp for $17mn cash. The cash realisation in DocsCorp represents an Internal Rate of Return (IRR) of 30% for BTI.

Financial Highlights for 1HFY21: BTI has registered a significant growth in gains on its financial assets by posting $23.49mn in 1HFY21 as compared with $2.43mn in 1HFY20. The company has posted $13.08mn of profits in 1HFY21 as compared with $0.11mn in 1HFY20. The company has registered a growth in its total marketable securities at $170.69mn as at 31 December 2020 as compared with $147.19mn as at 30 June 2020.

Portfolio Revenue Growth (Source: Company Reports)

Outlook: With a recent cash realisation of DocsCorp, BTI is expecting more profitable cash realisation through its investments in various information technology and media sector companies, going forward.

Stock Recommendation: In the last one month, BTI has decreased by 8.38% and increased by 18.33% in the last three months. The current market capitalisation of BTI stands at ~$172.0mn as on 18 March 2021. The stock is currently trading above the average 52-weeks’ price level range of $0.490-$1.610. On the technical analysis front, the stock has a support level of ~$1.35 and resistance of ~$1.47. On a TTM basis, the stock of BTI is trading at an EV/Sales multiple of 8.9x lower than the industry average (Investment Banking and Investment services) of 14.7x. Considering the valuations on TTM basis, cash realisation on profitable investments, positive outlook, and current trading levels, we recommend a “Hold” rating on the stock at the closing price of $1.42, up by 1.428% as on 18 March 2021.

BTI Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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