IOU Details

IOUpay Limited

Shares of IOU on a Trading Halt: IOUpay Limited (ASX: IOU) is a financial technology player, offering online software and solutions. It serves banks, telecom players and corporates in Malaysia and Indonesia through its business divisions of mobile banking, digital payments, and digital services. On 5 November 2020, the shares of the company were placed on a voluntary suspension at the request of IOU in relation to its pending announcement of capital raising.

A Look into Q1FY21 Results: The company changed its name from Isentric Limited (ICU) to IOUpay Limited. At the EGM through a notice of general meeting to the shareholders on 30^th September, the members voted in favour of the changes with 97.57% of 198.088 million shares. The company generated $1,164k of receipts from the customers and had an operating net cash outflow of $792k for Q1FY21, owing to the disruptions in Indonesian business and one-time legal, accounting, and related costs. The company has $2,812k in cash and call deposits as on 30 September 2020.

Cash Flow Details (Source: Company Reports)

Rebranding and A Host of Changes to Reposition as IOUPay Limited: The company has made improvements in the technology platform to tap the opportunities in Indonesian online purchase and bill payment market. New senior executives have been appointed for Malaysian operations. It is investing in intellectual property and platform capabilities such as new database administration, merchant integration services, etc. Accordingly, IOU has raised $1,517k from sophisticated investors and $2,066k from existing members for working capital needs and product development initiatives. 

Outlook: The company estimates a huge untapped market opportunity (150 million e-commerce active users and $300 billion size of internet economy by 2025) in South East Asia basis regional trends for higher online purchase and payment volumes & value. The company expects this to be continued given the pandemic condition and restrictions on movements resulting in continued upward trend for e-commerce purchase and billing.

Stock Details: The stock of IOU gave a positive return of 85.71% in the past one month and a positive return of 457.14% in the last three months. The stock is trading towards its 52-weeks’ high levels of $0.280. As on 6 November 2020, the market capitalisation of the company stood at ~$71.87 million. On a technical front, the stock of IOU has a support level of ~$0.181 and an immediate resistance level of ~$0.212. The stock will remain in a trading halt until the earlier of the commencement of normal trading on 9 November 2020 or when pending announcement is made to the market. The stock was last traded at $0.195.

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

Digital Wine Ventures Limited

DW8 Details

Q1 FY21 Begins with Growth in Revenue, Volume and Customers: Digital Wine Venture Limited (ASX: DW8) invests in early stage technology-based firms operating in the wine and beverage market. As on 6^th November 2020, the market capitalisation of the company stood at ~$65.43 million. The company reported an increase of 48% in the sales revenue quarter over quarter to $400,277 in Q1FY21. The company has received and processed 12,230 orders in Q1 FY21, up by 58% as compared to 7,754 in Q4 FY20. Hence, the total number of cases shipped was 22,470, which represented a 63% rise as compared to 13,825 cases shipped in Q4 FY20. During Q1, the company has also expanded into New Zealand market with the appointment of a business development official, 5 new brands signing up for the use of the platform and more traction witnessed.

Monthly Highlights (Source: Company Reports)

Agreement to Buy WDA and Partnership with Border Express: Based on an agreement, recently, DW8 stated that it will buy 100% of issued capital of Wine Delivery Australia Pty Ltd (WDA), an IV-party logistics provider based in South Australia, catering to the wine industry to foster the growth of WINEDEPOT technology platform. This acquisition will add 186 wineries to DW8’s existing customer database, provide a cellar door to door offering and a huge lift in brands for direct-to-trade marketplace. DW8 has also entered into a partnership with Border Express to grow its network of temperature-regulated depots in various key cities of Australia.

Stock Recommendation: The stock of DW8 gave a negative return of 14.81% in the past one month and a positive return of 53.33% in the last three months. The management believes it is well poised for FY21 and expects to generate higher revenue from its technology platform, raised capital from institutional investors, increased sales, and marketing personnel. The stock is trading above the average of its 52-weeks’ low and high levels of $0.004 and $0.066, respectively. On a Technical front, the stock of DW8 has a support level of ~$0.042 and an immediate resistance level of ~$0.051. Considering DW8’s Q1FY21 results, new customer wins, agreement to acquire WDA, current trading levels and decent long-term growth strategies, along with key risks, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.046, up by 4.545% on 6 November 2020.

DW8 Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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