Hansen Technologies Limited


HSN Details

Expanding via Strategic Acquisitions: Hansen Technologies Limited (ASX: HSN) has signed a letter of intent in the month of May to acquire PPL Solutions which provides billing services to the utilities sector in the United States, business processing outsourcing and information technology services. HSN has been acquiring and integrating aligned businesses from 2010 and expanding their business to North America, Australia, Caribbean and Europe to become global. Meanwhile, HSN is pursuing opportunities in emerging markets for Pay TV with new service providers and increased subscribers. There is an opportunity in the Utilities segment as the company sees increase in billing complexity with the introduction of Smart Meters and moving to full retail contestability in the markets like Japan and India.
 

Half year ended on December 2015 (Source: Company Reports)
 
For the first half of FY16, HSN reported a 50% growth in revenue and 43% growth in net profit due to Tele Billing acquisition (effective from May 01, 2015). The group paid the loan of $10 million and fully implemented the new six region operating structure. HSN is taking strategic initiatives to grow revenue through new business and existing clients, and has a target to maintain EBITDA of 25%-30%. Given such positive drivers, the shares of HSN have already rallied over 34.85% (as of June 27, 2016) in the last one year placing the stock at a higher P/E. We believe that the stock is “Expensive” at the current price of $3.50
 

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


A2M Details

Upward revision to earnings for FY16: a2 Milk Company Ltd (ASX: A2M) has recently enhanced its financials and now expects the group revenue to be in the range of $350 million to $360 million while the group’s operating EBITDA is forecasted to be in the range of $52 million to $54 million for FY 16. A2M expects improved operating cash flow in the second half of 2016 and cash on hand is estimated to exceed $50 million. This update from the group drove the stock by 14.93% in the last four weeks (as of June 27, 2016) as investors were happy that the group has the ability to withstand the regulation pressure from China. A2M is positioning itself based on the regulatory environment in China and adjusting its manufacturing and distribution model in response to such changes.
 

Protein type makes it a differentiator (Source: Company Reports)
 
A2M is also building businesses in USA & UK and targeting growth across multiple markets. Meanwhile, A2M stock is added to the S&P/ASX 200 index from June 18, 2016 which would drive the stock further. Based on the foregoing, we recommend investors to “Hold” the stock at the current price of $1.66
 

A2M Daily Chart (Source: Thomson Reuters)
 
RCG Corp Limited


RCG Details

Boosting capital position: RCG Corp Limited (ASX: RCG) sometime back raised $50 million through placement of shares in which around 33.3 million new shares were issued representing 7% of RCG’s existing issued capital. The funds raised would be used to repay the $28 million debt taken in 2015 to acquire Accent Group Limited and to fund RCG’s expected 35-40 store rollout by mid of 2017. On the other side, RCG has even extended the distribution agreement with New Skechers for another five years to 2026 which would provide RCG with the ability to accelerate the store rollout. Meanwhile, RCG has upgraded the FY 2016 EBITDA forecast to $58m - $60m and FY2016 earnings per share growth forecast to 40% - 45%.
 

Earnings for 1H2016 (Source: Company Reports)
 
RCG was added in S&P/ASX All Australian 200 Index after June 17, 2016 market close. Consequently, the stock recovered over 6.06% in the last one month (as of June 27, 2016) and we are bullish on the stock and give a “Buy” on this dividend yield stock at the current price of $1.385
 

RCG Daily Chart (Source: Thomson Reuters)
 
WiseTech Global Ltd


WTC Details

Acquisition of Cargo Community Network: WiseTech Global Ltd (ASX: WTC) has acquired Cargo Community Network Pty Ltd (CCN Australia) which is the exclusive distributor of CCN’s global messaging and applications for the air cargo industry for A$2.75 million. WiseTech Global has developed the operating system, CargoWise One which is an integrated and comprehensive logistics solutions to strengthen the supply chain management. Globe Express Services (GES) is used it to enhance business processes and capabilities globally by linking across 56 GES offices located in 20 countries. Meanwhile, WTC had reported a 51% revenue growth in the first half of 2016 as compared to the corresponding period of 2015 on the back of growth of new & existing customers of CargoWise One Application suite coupled with three companies’ acquisition contribution. On the other hand, we believe that WTC stock has been listed at an overvalued price and has rallied by 13.11% (as of June 27, 2016). We give an “Expensive” recommendation on the stock at the current price of $4.32
 

WTC Daily Chart (Source: Thomson Reuters)

---

Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.