WiseTech Global Ltd



WTC Details

Increased stake in SoftShip: WiseTech Global Ltd (ASX: WTC) has increased its existing strategic investment in SoftShip AG from 19.9% to 43.0% which would drive the group’s performance in FY 17 results. In addition, 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. As a result, WTC stock has already generated over 33.25% in the last three months (as of July 26, 2016) placing the stock at higher levels. The company also announced for the release of restricted securities (139,690 fully paid ordinary shares) from escrow on August 01, 2016. We give an “Expensive” recommendation on the stock at the current price of $5.28, and would review the stock at a later date.
 

WTC Daily Chart (Source: Thomson Reuters)
 
Xero Ltd



XRO Details

Cash flow to break even in FY 17: Xero Ltd (ASX: XRO) expects cash usage in FY 17 (based on FX rates at 1^st April 2016) to be less than FY 16 and estimates a cash flow to break even within its current cash balance.
 


Improving Margins (Source: Company Reports)
 
Meanwhile, XRO has crossed $250 million ACMR by adding $99 million in ACMR and 242k subscribers in FY16. FY16 operating revenue delivered a growth of 67 % while exceeded the subscriber growth of 51%. We remain bullish on the stock and maintain our “Buy” recommendation at the current price of $18.72
 

XRO Daily Chart (Source: Thomson Reuters)
 
Link Administration Holdings Ltd



LNK Details

Integrating Superpartners clients: Link Administration Holdings Ltd (ASX: LNK) is integrating Superpartners clients into a single platform with migration going smooth. Accordingly, LNK has finished the migration of Hostplus in April 2016 along with MTAA Super and HESTA. Moreover, the three existing Melbourne premises are consolidated while the fitout of the Collins Square premises in Melbourne remains on track for completion in the second half of CY16.
 


Pro forma prospectus forecast (Source: Company Reports)
 
LNK is considering a dividend for FY16 in line with the prospectus disclosure of around $27 million and has reaffirmed its pro forma prospectus forecast and full year FY2016 outlook. On the other hand, the group’s performance could be under pressure in the coming months given the ongoing turmoil in the markets owing to events such as Brexit outcome. The company lately announced about the first dividend (for the six months ending June 30, 2016), which is expected to be paid to shareholders in October 2016, will be made by direct credit to shareholders with a registered address in Australia or New Zealand. We give an “Expensive” recommendation on the stock at the current price of $8.60
 

LNK Daily Chart (Source: Thomson Reuters)
 
Technology One Limited



TNE Details

Weak performance estimates for the second half: Technology One Limited (ASX: TNE) expects higher second half of 2016 expenses which would increase by 11% for the FY 16. Accordingly, this would have a substantial impact on the profit in the second half of 2016.
 


Financial Performance 1H 2016 (Source: Company Reports)
 
In addition, the cloud loss would be $1m for the full year, while United Kingdom license fees would break even (vs $400k loss last year) and there would be no new acquisitions in the second half of 2016. Meanwhile, TNE has a low dividend yield, and the stock has already risen 23.41% in the last six months (as of July 26, 2016) and is trading at unreasonable P/E. We believe that the stock is “Expensive” at the current price of $5.70
 

TNE Daily Chart (Source: Thomson Reuters)
 
Aconex Ltd



ACX Details

Enterprise Agreements Signed: Aconex Ltd (ASX: ACX) has signed a three-year enterprise agreement with Farrans Construction, a leading building and civil engineering contractor with projects across Great Britain and Ireland. According to the agreement, Farrans would have unlimited use of and support for the Aconex project-wide collaboration platform for tendering, pre-construction and construction management of their projects. Moreover, ACX has signed a four-year enterprise agreement with ExxonMobil Global Services Company under which all ExxonMobil companies and affiliates would be able to use Aconex project-wide collaboration solutions to connect teams and control processes for engineering and construction projects globally. However, the company is facing one in two projects having more than 10% cost overrun. The stock has already risen 65.4% in the last six months (as of July 2, 2016). The stock is “Expensive” at the current price of $8.45
 

ACX Daily Chart (Source: Thomson Reuters)
 
Myob Group Ltd



MYO Details

Reaffirmed the FY 16 guidance: Myob Group Ltd (ASX: MYO) expects the online version of BankLink to be available by 2016 which would drive its performance further. MYO would release the product Practice Ledger, new MYOB CMS (Content Management System) and eCommerce experience in 2016. MYO is making continued investment in the MYOB online platform while reaffirmed the FY 16 pro forma guidance. MYO estimates EBITDA margins to be in the 45%-50% range.
 


Pro forma FY 15 Financial Results for December (Source: Company Reports)
 
The stock has risen 20.59% in the last six months (as of July 26, 2016) and we believe this potential to continue in the coming months. We give a “Hold” recommendation on this stock at the current price of $3.71
 

MYO Daily Chart (Source: Thomson Reuters)
 
Altium Ltd



ALU Details

Strong fundamentals supported by acquisitions: Altium Limited (ASX: ALU) intends to grow by acquiring and partnering with brands that are related with the design of Printed Circuit Board (PCB) and smart devices to achieve market leadership by 2020. Additionally, ALU expects PCB product line to reach over $150 million in revenue by 2020.
 


Strategy & Estimates (Source: Company Reports)
 
Meanwhile, ALU is on track to reach $100M in revenue for 2017 and would expand operating margins to enter and maintain >30%. The stock has already risen 45.44% in the last six months (as of July 26, 2016). Accordingly, we give a “Hold” recommendation on the stock at the current price of $7.22
 

ALU Daily Chart (Source: Thomson Reuters)

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