Alexium International Group Ltd



AJX Details
 
Building Sales momentum:Alexium International Group Ltd (ASX:AJX) raised over A$6 million from the issue of 9.7 million shares at $0.62 and intends to use these funds to develop environment friendly solutions (EFS) into new markets and categories. The Group has extensive IP with over 20 patents in 9 countries and management estimates its revenues of US$18.5 million for fiscal year of 2016. Additionally, Alexium has scheduled nine additional initial production runs before production, which further enhance the potential of the revenue pipeline. The group is also targeting the potential USD 6.6 billion global non textile flame retardant market by 2019 by entering into coatings and polymers sector. Recently, AJX got a new purchase order from fiberglass epoxy manufacturer in the South eastern US. We recommend the stock as “Speculative Buy” at the current market price of $0.58
 

AJX Daily Chart (Source: Thomson Reuters)
 
Norwood Systems Ltd



NOR Details
 
Product initiatives to drive growth:Norwood Systems Ltd (ASX: NOR) reported that its March quarter of 2016 notes a significance progress on several parameters like its developments, new product initiatives, and potential future commercial partnership negotiation. The company is expected to see significant change in monetization capability and increase its ARPU via successful upgrade of World Phone to incorporate Free App-to App calling, World Credit and Global Dynamic Pricing. The group’s Corona platform is also on advance stage of testing its two new application – Carona Cloud and Carona GTS.
 


World phone performance (Source: Company Reports)
 
Norwood was granted Company’s first Australian patent in January 2016 and other four patents are progressing towards grants. The stock recovered over 50% (as of May 11, 2016) in the last five days on their positive progress update and therefore we believe the stock as a “Speculative Buy” at the current price of $0.042
 

NOR Daily Chart (Source: Thomson Reuters)
 
Breville Group Ltd



BRG Details
 
Strong half-year performance:Breville Group Ltd (ASX: BRG) reported 12.7% increase in revenues to $331 million as compared to same period of last year while net profit grew 4% to $31 million for the first half of FY16. Operating margin improved to 19% driven by better product mix of high margin products. Earning per share increased to 23.7 cents, up 4% and has declared a dividend of 14.5 cents. Breville Group progress in the US is another growth driver, which recorded 30.8% rise in revenues and 39.9% rise in earning for the first half of FY16, contributing 63% to total group earnings.
 


Breville group first half performance (Source: Company Reports)
 
Additionally, the dollar movements would also play a key role in revenue growth.  The stock has recorded a 39.97% rise in the last three months (as on May 11, 2016) and we still believe there is more momentum for the stock and hence, we recommend a “Hold” at the current market price of $8.16
 

BRG Daily Chart (Source: Thomson Reuters)
 
Fantastic Holdings Ltd



FAN Details
 
Attractive valuations: Fantastic Holdings Ltd (ASX: FAN) reported an 11.7% increase in sales to $272.8 million during the first half of financial year 2016 while earnings before interest and tax (EBIT) and net profit were up 45.8% and 56.6%, respectively.
 


First half performance (Source: Company Reports)
 
The company declared a dividend of 7 cents per share during the period. The improvement in the performance was partially driven by an enhanced customer value proposition and expanded product range along with booming property market. FAN appointed Ms Debra Singh as the new retail CEO. The company is also trading at an attractive P/E and has a decent dividend yield. We recommend a “Buy” on the stock at the current market price of $1.985
 

FAN Daily Chart (Source: Thomson Reuters)
 
ARB Corp Ltd



ARB Details
 
Rising export and investment initiatives:ARB Corp Ltd (ASX: ARB) reported a 7.4% jump in revenues to $174.3 for the first half of FY16 while underlying profit excluding the profit on sale of a property rose by 8.1% to $22.1 million. The company is facing supply issue due to lack of resources. However, ARB is increasing its labor force as well as overtime in manufacturing facilities to cater the rising demand. ARB is also focusing on export market, which grew 17% in the nine months and contributes to 25.7% as compared with 23.9% in previous nine months period. The company is investing in new product development to cater the demand from new launches. It is also planning a distribution center in Dubai to serve the Middle East. On the other hand, the management has warned that profit growth in the second half would be constrained due to product development costs and the recent expansion of warehouse facility. Moreover, the stock is trading at a relatively high P/E with a low dividend yield. We believe the stock is “Expensive” at the current price of $16.14
 

ARB Daily Chart (Source: Thomson Reuters)

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