Touchcorp Ltd


TCH Details

Gain on investment in first half of 2016: Touchcorp Ltd (ASX: TCH) reported a 21% growth in the revenue to $22.5m in the first half FY 16 due to the strong growth in Mobility Services Revenue, the positive growth of European VAS Revenue and the delivery of Change Up platform. TCH’s proforma NPAT increased by 128% to $9.9m. Moreover, TCH holds 50 million shares in Afterpay and 10 million shares in Change Up. Afterpay has come up with the initial public offering on 4^th May 2016 and upon listing TCH share reduced from 35.7% to 30.3%.
 

1H 16 Financial Performance (Source: Company Reports)
 
The profit includes the gain on investment in Afterpay due to an increase in the share of net assets of Afterpay. Meanwhile, TCH stock is available at lucrative levels which are trading at a very low P/E. Accordingly, we give a “Speculative Buy” recommendation on the stock at the current price of $2.10
 

TCH Daily Chart (Source: Thomson Reuters)
 
Money3 Corporation Limited


MNY Details

Exceeded its prior profit guidance in FY 16:Money3 Corporation Limited (ASX: MNY) reported a Net Profit after Tax (“NPAT”) of $20.1m in FY 16, a growth of 44.4% and exceeded its prior profit guidance of $19m. The revenue grew by 40.0% to $96.7m. The secured automotive finance has formed over 50% growth in both revenue and EBITDA and MNY is expanding the offering of secured automotive finance through all the distribution channels.
 

FY 16 Financial Performance (Source: Company Reports)
 
Moreover, MNY is expecting to achieve NPAT of $26m for FY17. MNY stock rose over 64% in the last six months (as of September 19, 2016). Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $1.60
 

MNY Daily Chart (Source: Thomson Reuters)
 
WAM Capital Limited


WAM Details

Successfully Raised funds: WAM Capital Limited (ASX: WAM) has raised capital of $247.2m through the Share Purchase Plan and placement which got significantly oversubscribed. The capital raising initiatives were undertaken at a premium to the WAM’s net tangible assets (NTA).
 

Investment Portfolio Performance (Source: Company Reports)
 
WAM in FY 16 reported 85.7% increase in operating profit before tax to $132.3 million due to 21.6% increase in the investment portfolio, which outperformed by 19.6%. We give a “Hold” recommendation on the stock at the current price of $2.30
 

WAM Daily Chart (Source: Thomson Reuters)
 
a2 Milk Company Ltd


A2M Details

Strong a2 Platinum infant formula performance: a2 Milk Company Ltd (Australia) (ASX: A2M) has reported the revenue growth of 127.4% to $352.8 million in FY 16 over the prior corresponding period (pcp). The net profit after tax is of $30.4 million, against a net loss after tax of $2.1 million in the pcp. The group operating EBITDA before non-recurring items is of $54.6 million, up from $4.8 million on the pcp. In addition, there is an exceptional growth in sales of a2 Platinum infant formula in Australia & New Zealand (ANZ) and China, with the total revenue of $214.4 million, up 414% on pcp. The gross margin reflects change in product mix, with infant formula now the largest component of group sales. A2M has increased investment in marketing and brand development to 9.4% of net revenue, which reflects the targeted increased spend in ANZ, China and USA. Moreover, cash on hand reflects equity raised through private placement and share purchase plan combined with strong positive operating cash flow in the second half of FY 16. Additionally, A2M would remain focused geographically on growing the ANZ and China businesses and developing the market opportunities in the United Kingdom and United States. A2M is progressing plans for the New Zealand liquid milk market after the expiry of the last remaining nonexclusive license with Fresha Valley in May 2017. Meanwhile, the stock rose over 7.5% in the last six months (as of September 19, 2016). We maintain our “Hold” recommendation on the stock at the current price of $1.80
 

A2M Daily Chart (Source: Thomson Reuters)
 
United Overseas Australia Limited


UOS Details

Decent first half performance: United Overseas Australia Limited (ASX: UOS) reported an after tax profit of $55.02 million in the first half of 2016 as compared to the $38.29 million in 2015. UOS holds 46% equity in the UOA REIT. The trust has declared a distribution of 1.75 cents per unit for FY 16 and the group would receive a gross distribution payment of $5.7 million for the period. Accordingly, UOS stock rose over 10.4% in the last six months (as of September 19, 2016). On the other hand, the slowing investments, rising Australian dollar and potential rise of interest rates could still be some concerns which could limit the upside to the stock. We believe that the stock is “Expensive” at the current price of $0.545
 

UOS Daily Chart (Source: Thomson Reuters)
 
IVE Group Ltd


IGL Details

Exceeded its full year prospectus forecast:IVE Group Ltd (ASX: IGL) reported a 13.2% growth in the pro forma revenue to $382m in FY 16 and a 117.5% rise to $20.9m compared to the corresponding period FY 15. IGL has exceeded its full year prospectus forecast revenue, EBITDA, EBIT, NPAT and NPATA level.  Moreover, IGL has acquired six businesses in FY 16 and integrated four acquisitions into the existing businesses.
 

FY 16 Financial Performance (Source: Company Reports)
 
The stock rose 12.56% since its listing (as of September 19, 2016), opening an avenue for investor’s like Wolseley to sell a part of their stake in the stock. We give a “Speculative buy” recommendation on the stock at the current price of $2.17
 

IGL Daily Chart (Source: Thomson Reuters)
 
Monash IVF Group Ltd


MVF Details

Extending Capital flexibility: Monash IVF Group Ltd (ASX: MVF) reported a 25.3% rise in the group revenues to $156.6m in FY 16 in which 10.7% is from organic growth and 14.6% is derived from acquisitions. Net profit after tax (NPAT) rose 34.6% to $28.8m. The FY16 NPAT has exceeded by 4.6% on the upper range of MVF’s guidance of delivering the NPAT growth of 25% to 30% on its FY15 NPAT performance. MVF had acquired the Sydney Ultrasound for Women (SUFW) network in June 2015, which had contributed $17.7m in revenue growth and $4.0m EBITDA in FY16. Moreover, In June 2016, MVF has re-financed its Syndicated Debt Facility with a new $110m term debt facility and $5m working capital facility. The new Syndicated Debt Facility has a blended 3, 4 and 5-year maturity profile. Meanwhile, MVF stock surged over 33.7% in the last six months (as of September 19, 2016), and still generated a decent dividend yield.
 

FY 16 Financial Performance (Source: Company Reports)
 
MVF has also declared a fully franked final dividend of 4.5 cents per share representing a 21.6% increase on pcp, payable in October 2016. We believe there is more momentum in the stock and accordingly, we give a “Hold” recommendation on the stock at the current price of $2.35
 

MVF Daily Chart (Source: Thomson Reuters)

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