QuickFee Limited

QFE Details

QuickFee Partners with Splitit: QuickFee Limited (ASX: QFE) generates revenue from its technology platform and fee funding lending solution, allowing clients of professional service firms to pay invoices up-front or over time. As on 29 September 2020, the market capitalization of the company stood at ~$125.93 million. The company has recently signed an agreement with Splitit Payments Limited, which is likely to complement the existing financing offering to clients and firms and will expand its customer base, which fall outside its credit risk framework. The agreement will enable the clients of accounting and law firms in the US and Australia to pay their fees on credit card using Splitit’s instalment solution.

Completion of Capital Raise: The company has also completed an institutional payment of $15 million to fund the rollout of the interest free product recently announced in partnership with Splitit Payments Limited.

US Growth Drives Record FY20 Revenue: The company has reported a pivotal year with growing presence in the US. During FY20, the company reported record growth in the US and AU lending to US$13.0 million and A$49.3 million, respectively. In the same time span, QFE saw a significant growth of 137% in transaction volumes to US$305 million and reported record revenue of $8.5 million, reflecting an increase of 47% in the pcp.

FY20 Financial and Operational Highlights (Source: Company Reports)

Outlook: The company has a decent liquidity position with a cash balance of $15 million, which are likely to provide funds for acceleration of growth in the US and technology developments and brand building. The industry retains a significant global opportunity with estimated revenue of $20 billion in Australia and $21 billion in the US in the long term.

Stock Recommendation: The company seems well positioned for growth and is capitalizing on its first mover advantage and has achieved substantial growth in Australia and the US. As per ASX, the stock of QFE gave a return of 222.22% in the past six months and a return of 11.54% in the past three months. The stock is trading close to the average of its 52-weeks’ high and low level and retains further potential for growth. On a technical front, the stock of QFE has a support level of ~$0.499 and a resistance level of ~$0.69. On a TTM basis, the stock of EHL is trading at an EV/Sales multiple of 41.3x, lower than the industry average (Professional and Commercial Services) of 42.5x, and thus seems undervalued. Considering the current trading levels, returns in the past three months, lower EV/Sales Multiple and decent FY20 results, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.570, down by 1.724% on 29 September 2020.

QFE Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

HSC Technology Group Ltd

HSC Details

HSC Awarded Singapore Aged Care Facility Contract: HSC Technology Group Ltd (ASX: HSC) is engaged in the development and integration of an assistive technology IOT platform for the aged care and disability sectors. As on 29 September 2020, the market capitalization of the company stood at ~$26.81 million. The company has been awarded a contract for the HSC IoT marketplace through its Singapore based partner to supply hardware and software solutions to the St John’s Home. This demonstrates the strong partnership network and is likely to deliver revenue streams and further growth opportunities.

Financial Highlights: During 1H20, revenue of the company witnessed a significant improvement of 3,662% to $1.65 million, up from $44.05k in the pcp. This was mainly due to increased sales, reflecting the investment in the team and technologies which underpin the HSC go-to-market approach. The company has also signed several new reseller agreements to extend its distributor network. However, net assets of the company went down to $2.62 million at the end of 30 June 2020 from $3.47 million at the end of 31 December 2019.

1H20 Financial Highlights (Source: Company Reports)

HSC partners with Harvey Norman Commercial Division: The company has entered into an agreement with Commercial Division of Harvey Norman, NSW for its HSC Care and HSC Home solutions. This agreement is likely to expand the company’s disability sector footprint via existing Harvey Norman contracts.

Stock Recommendation: The company’s partnership with NSW will allow the company to provide its products and services to a much larger market. As per ASX, the stock of HSC gave a significant return of 255.56% in the past three months and a return of 6.67% in the past one month. However, the stock is trading very close to its 52-weeks’ high level of $0.021, and thus retains limited potential for further growth. On a technical front, the stock of HSC has a support level of ~$0.013 and a resistance level of ~$0.0206. On a TTM basis, the stock of HSC is trading at an EV/Sales multiple of 9x, higher than the industry median (Technology) of 5.3x and thus seems overvalued. Considering the current trading levels, high returns in the past three months, partnership with various companies, we suggest investors to wait for a better entry level and give an ‘Expensive’ rating on the stock at the current market price of ~$0.02, up by 25% on 29 September 2020.

HSC Daily Technical Chart (Source: Refinitiv, 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 do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.