Capilano Honey Limited

CZZ Details

Improving prospects:Capilano Honey Limited (ASX: CZZ) stock rose over 13.3% in the last three months (as at September 05, 2017) driven by their FY17 results which has been almost in line with the expectation. Net profit surged 9% year on year (yoy) to $10.335 million during the year while the net tangible assets backing per ordinary share rose to $6.57 as compared to $5.61 in the prior corresponding period. Revenue was down slightly by 0.4%.



Capilano Honey 2017 performance (Source: Company reports)
 
Management reported that they expect a better honey production and intends to leverage this production to expand their sales in international markets. The group launched a new product, prebiotic honey – Beeotic, to strengthen their brand. Trading at a reasonable price to earnings level, we give a “Speculative Buy” recommendation on this dividend yield stock at the current price of $ 16.14



CZZ Daily Chart (Source: Thomson Reuters)

Harvey Norman Holdings Limited

HVN Details

Slashed final dividend:Harvey Norman Holdings Limited’s (ASX: HVN) stock corrected over 12% in the last five days (as of September 05, 2017) as the group cut their final dividend to $0.12 (payable on December 01, 2017) for fiscal year of 2017 as compared to $0.17 in the prior corresponding period. But, Harvey delivered a decent profit before tax growth of 26.3% yoy to $664.82 million (excluding impairment losses), while Company-operated retail segment profit surged 24.3% yoy to $90.85 million.
 
Segment performance (Source: Company reports)

Strong results from various segments supported the overall result. New Zealand retail segment profit enhanced 15.6% yoy to $79.43 million, while Singapore and Malaysia retail segment profit surged 69.9% yoy to $19.30 million. Franchisee aggregated headline sales rose 5.4% yoy to $5.62 billion, in FY17. Property segment profit surged 46.2% yoy to $247.47 million, while the group reported a net property revaluation increment of $108.05 million for investment properties. On the other hand, given the ongoing weak retail sentiment coupled with rising competition,we maintain our “Expensive” recommendation on the stock at the current price of $ 3.86



HVN Daily Chart (Source: Thomson Reuters)

Coca-Cola Amatil Limited

CCL Details

Efforts on portfolio rebalancing: Coca-Cola Amatil Limited (ASX: CCL) corrected over 24.2% in the last six months (as at September 05, 2017) post their weak trading update in April and challenging time for the Australian Beverages. The group reported an underlying before interest and tax (EBIT) fall of 4.3% during the 2017 half year results while underlying net profit after tax (NPAT) lost 4.1% during the period. On the other hand, the group expected a better performance post Easter. CCL also bought 26.7 million shares worth $247.8 million.
 

Investment strategy (Source: Company reports)
The group’s Indonesia & Papua New Guinea underlying EBIT delivered a 37% yoy rise while Alcohol & Coffee division reported a 10.3% yoy increase. On the other hand, Australian Beverages revenue declined by 5.1%. CCL has indicated to rebalance their portfolio in 2017 while focusing on their Sparkling Beverages and Still Beverages. We give a “Hold” recommendation on the stock at the current price of $ 7.99



CCL Daily Chart (Source: Thomson Reuters) 

Qantas Airways Limited

QAN Details

Extended partnership with Emirates:Qantas Airways Limited (ASX: QAN) extended their partnership with Emirates for another five years, which would deliver further benefits to the eight million passengers who have travelled more than 65 billion kilometers on the combined network since 2013. Qantas expects an annualized net benefit at more than $80 million from FY19 onwards. On the other hand, Qantas reported unit revenue (RASK) for fiscal year of 2017 falling about 2%. Underlying profit before tax slipped by $131 million to $1,401 million. Qantas International segment performance was also weak wherein the revenue tumbled 0.7%, while underlying EBIT lost 36% on a yoy basis. QAN stock rallied over 50.1% in the last six months (as of September 05, 2017) and we recommend investors to book their profits as the price now seems to have factored in the positives. Accordingly, we give a “Sell” recommendation on the stock at the current price of $ 5.71



QAN Daily Chart (Source: Thomson Reuters)

Treasury Wine Estates Ltd

TWE Details

Posted good result but trading at higher levels: Treasury Wine Estates Ltd (ASX: TWE) stock rallied over 13.2% in the last four weeks (as of September 05, 2017) driven by their decent 2017 results. The group reported an EBITS’ (Earnings before interest, tax, SGARA and material items) rise of 36.2% yoy while their EBITS margin expanded 4.0 percentage points to 19.0%. On the other hand, Treasury Wine is paying $49 million to settle a shareholder class action which was against them on the grounds of misleading and deceptive conduct. Moreover, the heavy rally in the stock has already placed them at a relatively higher level. We believe the stock is “Expensive” at the current price of $ 14.39



TWE Daily Chart (Source: Thomson Reuters)

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