Douugh Limited

DOU Details

Business Update: Douugh Limited (ASX: DOU) is an artificial intelligence technology-based company that helps customers to manage and grow their money. The market capitalisation of the company as of 25 May 2021 stood at $61.68 million. As per a recent announcement, Leanne Graham, an ex-executive at Xero, has joined Douugh Board.

Progress since Launch: As per a recent update, the company has reaffirmed the acceleration in product development with the launch of Autopilot feature; Instant virtual card provisioning with Mastercard and Instant bank account funding feature with Stripe. DOU has also announced strategic investment and partnership with Humm Group Limited to launch the BNPL feature during the period. 

Q3FY2021 Financial Result: During the period, the company has witnessed growth in customer metrics where there was an increase in total debit card spends by 6.5x, and total deposits up by 5.5x along with a surge in customer acquisition by 2.6x, when compared to the previous quarter. The cash position of the company stood at $13.3 million at the end of the quarter.

Q3FY21 Cash Flow from Operations (Source: Company Reports)

Outlook: Douugh and Humm are finalising to launch a BNPL Feature card, based on credit score. The company is looking forward to expanding its reach and drive new customers by a strategic partnership with Rakuten. The company will look to scale up its core metrics going forward as acquisition spend increases in Q4FY21.

Key Risks: The company’s activities are exposed to technology risk, credit risk, liquidity risk, which can impact the business structure and operations going forward.

Stock Recommendation: As per a recent update, the company has received Registered Investment Advisor (RIA) licence by US Securities and Exchange Commission (SEC) to launch Wealth Management services such as manage portfolio, single stock, and crypto trading. The stock of DOU is trading below its average 52-weeks’ levels of $0.048-$0.490. The stock of DOU gave a positive return of ~464.7% in the past nine months and a negative return of ~3.99% in the past one week. Considering the current trading levels, strategic collaboration, growth in key metrics, new product launch and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.096, up by 3.225% as on 25 May 2021.  

DOU Daily Technical Chart, Data Source: REFINITIV

Uscom Limited

UCM Details

European CE Mark Approved: Uscom Limited (ASX: UCM) is an innovative medical technology company that offers USCOM 1A, Uscom BP+, Uscom SpiroSonic digital multi-path ultrasonic spirometers and Ventitest through a network of distribution partners globally. The market capitalisation of the company as of 25 May 2021 stood at $21.55 million. As per a recent announcement, the company got approval for European CE Mark for the Uscom digital ultrasonic SpiroSonic AIR spirometer, which is used to assess asthma, COPD, occupational lung disease and post-COVID syndrome.

Uscom Device Regulatory Approval for China: Uscom needs approval for its two new specialised cardiovascular monitors, the "USCOM O₂" and the "USCOM Basic" from China National Medical Products Administration (NMPA). The development of these monitors has created a three-tier range of Uscom haemodynamic monitors for sale in the Chinese market.

Q3FY21 Financial Performance: During the period, the company recorded revenue of $0.78 million, down by 20% from $0.98 million on the preceding quarter. UCM has recorded cash receipts of $0.89 million in Q3FY21, down by 53% from $1.91 million in the preceding quarter. The company has recorded a decline in net operating cash outflow to $0.25 million in Q3FY21, and the cash balance of the company stood at $2.03 million as of 31 March 2021.

Q3FY21 Cash Flow From Operations (Source: Company Reports)

Outlook: The Government is likely to invest in improving the healthcare sector by targeting hospitals with special funding for critical care equipment such as cardiac monitors and ventilators, which might stimulate the company's earnings in the near future. 

Key Risks: UCM has a reach to the global market due to which the company is exposed to risk such as geopolitical, economic, trade and currency risks. The company requires a licence to commence the sale in the foreign market, which could be expensive, complex and time-consuming. 

Stock Recommendation: Despite the impact of the Chinese New Year, the company has reported resilient Q3 sales. The stock of UCM is trading below its average 52-weeks' levels of $0.115-$0.280. The stock of UCM gave a positive return of ~3.7% in the past one week and a negative return of ~9.6% in the past six months.  On a TTM basis, the stock of UCM is trading at an EV/Sales multiple of 3.5x, lower than the industry median (Healthcare Equipment & Supplies) of 11.4x. Considering the current trading levels and valuation on a TTM basis, the strategic distribution, resilient performance, decent cash flow and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.145, up by 3.571% as on 25 May 2021. 

UCM Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from Refinitiv             

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.

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