Villa World Ltd

VLW Details
Guidance reaffirmed: Villa World Ltd (ASX: VLW) reaffirmed the guidance for FY17 of profit after tax growth of at least 5% to $35.4 million. VLW in FY 16 had reported a 32% increase in the statutory profit after tax to $33.7 million and a 19% increase in the earnings per share to 30.6 cents. VLW now expects net profit after tax (unaudited) of over $19.5 - $21.4 million for 1H17, though it is dependent upon the timing of delivery of land and housing in Victorian projects. VLW had posted a net profit after tax of $20.4 million for 1H16. Additionally, VLW would continue to maintain their payout policy of 50 - 75% of NPAT, and reaffirmed the dividends in FY17 of at least 18 cps. 464 sale contracts were said to have been carried forward into FY17 with a gross value of $165.6 million. The group made a confidential Deed of Settlement for resolution of the Silverstone proceedings, and the Court had approved the settlement. Further, all the parties have now complied with the terms of the Deed, and the Court has now made orders formally dismissing the proceedings. In addition, VLW in joint venture with Greenfields Development Company, has agreed to the unconditional purchase of a 153-hectare site at Greenbank, south of Brisbane at the purchase price of $50 million (exclusive of GST) with settlement anticipated to occur in stages during FY18 and FY19. VLW stock rallied over 5.3% in the last five days and has a good dividend yield. We give a “Hold” recommendation on the stock at the current price of – $ 2.35

 
VLW Daily Chart (Source: Thomson Reuters) 

Vita Group Ltd

VTG Details
Agreed on changes to Telstra commercial terms: Vita Group Ltd (ASX: VTG) has agreed the changes to its commercial terms with strategic partner, Telstra. As per the agreed new terms, the remuneration structure would change and there will also be additions to the group’s network of Telstra-branded stores. Overall from the changes, VTG expects to see volume improvement offset by some margin compression. On the other hand, there is a price query from the ASX compliance regarding the recent trading of the security. The group intends to have its half year results briefing on February 28, 2017. Meanwhile, VTG stock recovered over 34.01% in the last one year as on February 03, 2017, while, we give a “Hold” recommendation on the stock at the current price of – $ 3.35

 
VTG Daily Chart (Source: Thomson Reuters) 

Senetas Corp Ltd

SEN Details
Softness in market update: Senetas Corp Ltd (ASX: SEN) stock has fallen 13% on February 06, 2017 at the back of its market update entailing a lower than expected guidance for net profit before tax (NPBT) of between $1.25m and $1.3m for HY17 while NPBT for HY16 stood at $1.8m. This downgrade resulted from the impact of disrupted ordering patterns for products from customers undergoing network upgrades. SEN expects the trend to reverse once the upgrades get completed while timing for completion is still uncertain. FY17 NPBT is now estimated to between $5m and $6m while net after tax is expected to be between $3.4m and $4.2m.
 

FY 16 Financial Performance (Source: Company Reports)
 
The group otherwise invested over A$860,000 in Smart Antenna Technologies Ltd (SAT), which is a pioneering international smart antenna technology company based in the UK. For this investment, SEN is expected to get a 6% equity stake in the company. The investment has been funded from the existing cash balances. Meanwhile, SEN stock has recovered over 12.2% in the last four weeks as on February 03, 2017. We give a “Hold” recommendation on the stock at the current price of – $ 0.10

 
SEN Daily Chart (Source: Thomson Reuters) 

Magnis Resources Ltd

MNS Details
MOU with Russia’s ROSATOM International Network: Magnis Resources Ltd (ASX: MNS) had reported that product agreements with lithium-ion battery end-users are progressing well for the Nachu Graphite Project and the discussions are entering into final stages. Further, all regulatory and environmental permits have been finalized with a Bankable Feasibility Study (BFS) being completed. Nachu project is on target to meet the forecast increase in graphite demand for lithium-ion battery uses as numerous “mega-factories” are commissioned from 2018 onwards. However, Sinosteel Liaoning and China National Materials Import and Export Corporation (SINOMA) has terminated both the offtake agreements. Moreover, the second phase of the land compensation process got finished with 95% of the affected parties being compensated. Additionally, Mtwara Port Agreement got extended. MNS has signed the Memorandum of Understanding (MOU) with Russia’s ROSATOM International Network (ROSATOM) for project financing and offtake of Super Jumbo and Jumbo flake graphite. ROSATOM is considered the world leader in the development and construction of nuclear reactors with over US$130 billion worth of orders in place. Magnis has also realised significant reductions in the manufacturing cost of graphite silicon blend anode material.
 

Capacity for Nachu Graphite Anode (Source: Company Reports)
 
Meanwhile, MNS stock surged over 9.5% in the last three months as on February 03, 2017. We believe the bullish momentum would continue while give a “Buy” recommendation on the stock at the current price of – $ 0.70

 
MNS Daily Chart (Source: Thomson Reuters)

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