IMF Bentham Ltd


IMF Details

Favorable judgment from the US Federal Court:IMF Bentham Ltd.’s (ASX: IMF) subsidiary Bentham USA has received favorable judgment from the US Federal Court. The judgment granted a motion endorsing a successful arbitration award previously rendered in the client’s favor. As a result of this decision, IMF would recognize a revenue of over $2.8M, and generate a profit after capitalized overheads (but before tax) of over $1M. Moreover, in another case IMF has agreed to fund a further matter which involves the funding of a patent infringement case against multiple defendants in a US Federal Court. The initial estimated claim value, which IMF will include in its Quarterly Investment Portfolio Report for this matter is $90M. IMF has also agreed to fund a new arbitration matter in the US. IMF also informed that no appeal to Federal Court’s approval of settlement for claim against Rivercity has been lodged. In addition, IMF has reported a 232% growth in the underlying NPAT of $20.8M in FY 16 as compared to the same period of last year.
 

FY 16 Financial Performance (Source: Company Reports)
 
Moreover, IMF stock rose over 40.15% in the six months (as of September 23, 2016), and still trading at reasonable valuations. Accordingly, we give a “Buy” recommendation on the stock at the current price of $1.785
 

IMF Daily Chart (Source: Thomson Reuters)
 
Donaco International Ltd


DNA Details

Turnaround from loss to profit in FY 16: Donaco International Ltd (ASX: DNA) is up 7.95% on September 26, 2016, and lately resolved to pay the shareholders a final dividend of 1 cent per ordinary share, unfranked. The company has reported a 602.6% growth in revenue to 143,385,778 in FY 16, reflecting the contribution from Star Vegas while the profit grew 2736.8% to $77,208,54. The earnings per share (diluted) in FY 16 reported 9.29 cents from the loss per share of 0.52 cents in FY 15.
 

FY 16 Financial Performance (Source: Company Reports)
 
In addition, Star Paradise expansion to introduce new Thai junkets and players would offer further recurring revenue from FY17. Trading at a very cheap P/E, we give a “Buy” recommendation on the stock at the current price of $0.475
 

DNA Daily Chart (Source: Thomson Reuters)
 
Nine Entertainment Co Holdings Ltd


NEC Details

Growth in dividend: Nine Entertainment Co Holdings Ltd (ASX: NEC) has reported a 6.5% fall in revenue to $1282.4 million in the FY16, and witnessed a 7.1% fall in group EBITDA to $201.7 million. Net Profit after Tax from continuing operations is down by 7.1% to $120.3 million. However, the dividend per share grew 30.4% to 12 cents in FY 16. The digital division reported a double digit earnings growth with strong margin improvement.
 

FY 16 Financial Performance (Source: Company Reports)
 
Additionally, NEC expects metro FTA market to be flat to down marginally in FY 17. But, the momentum is expected to return into FY18, given increased local programming focus and output. In addition, NEC’s sale of Willoughby site would finish by October 2017, which would enhance their cash flow. The stock is trading at a cheap P/E while has a strong dividend yield. We give a “Hold” recommendation on the stock at the current price of $0.965
 

NEC Daily Chart (Source: Thomson Reuters)
 
Villa World Ltd


VLW Details

JV acquisition and Silverstone litigation update:Villa World Ltd (ASX: VLW) lately announced for a $50 million joint venture acquisition of 153 development-ready hectares in South East Queensland that has reinforced the relationship between the company and Sydney’s Greenfields Development Company. VLW has also resolved the Silverstone litigation among all the parties for the resolution of the proceedings. The agreement needs to be formally documented, and is subject to approval by the Federal Court. Moreover, VLW has reported a 32% increase in the statutory profit after tax to $33.7 million in FY 16 and 19% increase in the earnings per share to 30.6 cents.
 

FY 16 Financial Performance (Source: Company Reports)
 
Additionally, 464 sale contracts carried forward into FY17 with a gross value of $165.6 million while the group gave guidance for FY17 of profit after tax growth of at least 5% to $35.4 million. Meanwhile, VLW stock rose over 5.07% in the last six months (as of September 23, 2016), and offers a strong dividend yield. Accordingly, we give a “Hold” recommendation on the stock at the current price of $2.28
 

VLW Daily Chart (Source: Thomson Reuters)
 
Amaysim Australia Ltd


AYS Details

Subscriber base is in line with guidance:Amaysim Australia Ltd (ASX: AYS) has reported the group closing subscriber base of 966,000 in FY 16 including the amaysim and Vaya brands, which is in line with May 2016 guidance and ahead of prospectus forecasts (which did not include the Vaya acquisition). The statutory net revenue grew 19.2% to $253.5m on FY15 and the underlying NPATA grew 118.6% to $22.3m on FY15. The group will conduct its AGM on November 17, 2016.
 

FY 16 Financial Performance (Source: Company Reports)
 
Meanwhile, AYS stock rose 9.84% in the six months (as of September 23, 2016). Accordingly, we give a “Buy” recommendation on the stock at the current price of $2.13
 

AYS Daily Chart (Source: Thomson Reuters)
 
Metals X Limited


MLX Details

Profit guidance increased for Cannon gold mine:Metals X Limited (ASX: MLX) recently reported that Tanami Gold NL has reached an agreement with MLX with regard to ending legal proceedings on Central Tanami Project’s interests, wherein Tanami is now to make payment to MLX of $3,000,000. On the other hand, MLX announced that its Cannon gold mine (in which the company has 50% profit) has enhanced their net profit guidance to A$17.2m from A$14.9m at current gold price of A$1,750/oz. Moreover, the recent operational performance shows the higher than estimated metallurgical recovery rates at South Kalgoorlie Operations. Revision of Cannon’s ore block model based on recent grade control drilling, has led to a better overall gold recovered estimate, coupled with lower operational costs on a per ounce basis and higher net cash generation. Although the FY16 result was mixed but improved gold operations along with Fortnum Gold Project are expected to give a boost. Meanwhile, MLX stock rose over 51.76% in the last six months (as of September 23, 2016), and still trading at a reasonable P/E. Hence, we give a “Buy” recommendation on the stock at the current price of $1.47
 

MLX Daily Chart (Source: Thomson Reuters)
 
HFA Holdings Limited


HFA Details

Fall in profit in FY 16: HFA Holdings Limited (ASX: HFA) has reported only 1% increase in the operating income to $64.43 million in FY16. But there was a 90% fall in the profit after tax to $14.11 million. As a result, HFA stock has fallen 21.13% during this year to date (as of September 23, 2016).
 

FY 16 Financial Performance (Source: Company Reports)
 
However, group’s management & platform fees are up 2.6% to $70.1m against the prior corresponding period. We believe the stock can recover in the coming months and give a “Speculative Buy” recommendation on the stock at the current price of $2.30
 

HFA Daily Chart (Source: Thomson Reuters)

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