Harris Technology Group Limited

HT8 Details

Q3FY21 Performance Update: Harris Technology Group Limited (ASX: HT8) is engaged in the business of technology distribution and online retailing. The market capitalisation of the company as on 12 April 2021 stood at ~$33.14 million. The company delivered record sales of $10.4 million during Q3, compared to a sale of $3.4 million in the previous corresponding period. The revenue increase has been supported by the growth in gaming product sales. There has also been increased demand across Home Office and IT products owing to work-from-home and remote learning trends. The company has reported a revenue of $19.39 million during H1FY21, and the net profit stood at $1.06 million during the same period.

Change of Director’s Interest: As per a recent update, the company’s director Garrison Huang has acquired an additional 240,000 ordinary shares in the company for a total consideration of $30,000.

Change of Director’s Interest (Source: Company Reports)

Outlook: The company has been able to meet increased demand by expanding its warehouse capacity and onboarding new market-leading brands. The company is quite optimistic about its prospects in the gaming segment. It expects to secure supply on a consistent basis by identifying market trends and working with the vendor partners on a proactive basis.

Key Risks: The Group is exposed to financial risks which include interest rate risk, currency risk, credit risk and liquidity risk. It has exposure to changes in market interest rates with regards to the company’s debt obligations with the floating interest rate.

Stock Recommendation:  As per a recent update, HT8 has announced Mr. Guy Polak as a non-executive director of the company, effective from 1 April 2021. As per ASX, the stock of HT8 is trading above its average 52-weeks’ levels of $0.018-$0.225. The stock of HT8 gave a positive return of ~8% in the past one month and a positive return of ~8% in the past one week. On a technical analysis front, the stock of HT8 has a support level of ~$0.12 and a resistance level of ~$0.155. On a TTM basis, the stock of HT8 is trading at an EV/Sales multiple of 1.2x, lower than the industry median (Technology) of 5.9x. Considering the valuation on TTM basis, record sales in Q3FY21, increase in demand for the products, entry in the gaming segment and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.135, up by 3.846% as on 12 April 2021.

HT8 Daily Technical Chart (Source: Refinitiv, Thomson Reuters) 

Holista Colltech Limited

HCT Details

FY20 Performance Update: Holista Colltech Limited (ASX: HCT) is a natural wellness company focused on dietary supplements and healthy food ingredients. The market capitalisation of the company as on 12 April 2021, stood at ~$17.34 million. During FY20, the company reported revenues from contracts with customers at $7.10 million. The revenue was impacted by a decline in the Dietary Supplements and Ovine Collagen divisions due to the impact of the COVID-19 pandemic. However, it was offset to some extent by decent growth in the Healthy Food Ingredients and Infection Control businesses. The net loss stood at $5.68 million.

FY20 Financial Performance (Source: Company Reports)

Outlook: The upcoming launch of GI Lite white bread through Costanzo’s US partnership is expected to be a substantial growth driver of the company. It has forecasted further acceleration in demand for its all-natural sanitisers, as it plans to launch sanitising nasal balm and M3 industrial solution.

Key Risks: The company’s activities expose it to changes in market prices such as currency exchange rates and commodity prices. HCT is also exposed to credit risks and it has adopted a policy of dealing only with creditworthy customers.

Stock Recommendation:  The company has a cash position of $3 million as of 12 April 2020 and seems to be well-funded for leveraging any growth opportunities. As per ASX, the stock of HCT is trading below its average 52-weeks’ levels of $0.055-$0.275. The stock of HCT gave a positive return of ~1.56% in the past one week and a negative return of ~4.41% in the past one month. On a technical analysis front, the stock of HCT has a support level of ~$0.058 and a resistance level of ~$0.074. On a TTM basis, the stock of HCT is trading at an EV/Sales multiple of 1.9x, lower than the industry median (Healthcare) of 14.8x. Considering the valuation on TTM basis and current trading levels, resilient revenue performance despite the impact of the COVID-19 pandemic, positive outlook in 2021 and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.065, up by 3.174% as on 12 April 2021.

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

Note: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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