amaysim Australia Limited
AYS Details
Sale of Energy Business: amaysim Australia Limited (ASX: AYS) provides simple and transparent mobile and retail energy plans. The market capitalisation of the company stood at $182.97 Mn as of 1st October 2020. Recently, the company finished divestment of its Energy business to AGL Energy Limited for the cash consideration of $115.0 million. These businesses include Click Energy, amaysim Energy and On The Move. The company is likely to have net proceeds of a minimum $50 million after the settlement of $53.05 million of debt, transaction costs, and completion adjustments.
Growth in Mobile Subscribers: For the year ended 30th June 2020, the company reported net revenue amounting to $490.5 million, reflecting a fall of 3.5% over pcp. Underlying EBITDA for the period amounted to $40.1 million, down by 15.2% over FY19. However, this surpassed the FY20 guidance of $33 million to $39 million. The gross profit margin for the year stood at 30.8% against 29.9% in FY19. Mobile gross margin stood at 40.9% up from 34.2% in FY19 driven by the strength of the network supply agreement (NSA). During 2H FY20, the company witnessed strong growth in organic mobile subscribers. As of 30th June 2020, the total mobile subscribers stood at 1.18 million.
Key Financials (Source: Company Reports)
Outlook: Going forward, the company will continue to make investments in mobile marketing to maintain growth in subscribers. The company has scheduled to conduct its Annual Shareholders Meeting on 22nd October 2020.
Valuation Methodology: Price to Earnings Multiple Based Relative Valuation (Illustrative)
Price to Earnings Multiple Based Valuation (Source: Refinitiv, Thomson Reuters)
Note: All forecasted figures and peers have been taken from Thomson Reuters, NTM-Next Twelve Months
Stock Recommendation: The stock of AYS has given a positive return of 5.08% in the past three months. The 52-week low-high range for the stock stands at $0.240-$0.810. On a technical analysis front, the stock price of AYS has a support level of ~$0.566 and a resistance level of ~$0.813. We have valued the stock using the P/E multiple based illustrative relative valuation method and arrived at a target price with an upside of low double-digit (in percentage terms). For the purpose, we have taken peers such as REA Group Ltd (ASX: REA), Vocus Group Ltd (ASX: VOC), News Corp (ASX: NWS) etc. Therefore, considering the growth in subscribers, increased cash balance, and positive outlook, we have given a “Hold” recommendation on the stock at the current market price of $0.595 per share, down by 4.032% on 1st October 2020.
AYS Daily Technical Chart (Source: Refinitiv, Thomson Reuters)
Liquefied Natural Gas Limited
LNG Details
Orders from Supreme Court: Liquefied Natural Gas Limited (ASX: LNG) is the 100% owner of Magnolia LNG LLC, Bear Head LNG Corporation Inc, Bear Paw Pipeline Corporation Inc and LNG Technology LLC. Recently, the company notified that its Administrators (Craig Crosbie, Daniel Walley and Simon Theobald) of PwC Australia had received orders from the Supreme Court of Victoria. The court stated that the Administrators are justified and working reasonably in proceeding with a process (Stage 2 Process) pursuing expressions of interest in relation to either a recapitalization of the company and/or its remaining subsidiaries, or one or more transactions in respect of the company’s remaining assets.
Termination of Binding Sale Transaction: On 25th May 2020, the company terminated the binding sale transaction with Global Energy Megatrend Limited in regards with its interest in subsidiary entities that own Magnolia LNG Project. The contract was terminated due to Global Energy Megatrend Limited’s failure to close the transaction within the specified period. However, the company reached a new transaction agreement, wherein, LNG divested its stake in the US Entities for a cash price of US$2.0 million to Magnolia LNG Holdings, LLC. For the half-year ended 30th June 2020, the company reported revenue from operating activities of $70,000 as compared to $439,000 in 1H FY19. Net loss for the half-year amounted to $13.88 million against $16.9 million in 1H FY19.
Key Financials (Source: Company Reports)
Stock Details: On 30th April 2020, the company requested ASX to grant a trading halt on its securities as the company was seeking to release an announcement in relation to the change in office holders. However, on 1st May 2020, the stock of LNG went into a suspension from Official Quotation due to its failure to file the relevant periodic report by the due date. Earlier, the company expected the removal of suspension on 4th May 2020. The stock last traded at $0.043.
LNG Daily Technical Chart (Source: Refinitiv, Thomson Reuters)
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