PlaySide Studios Limited

PLY Details

Scaling-up Through Joint Venture: PlaySide Studios Limited (ASX: PLY) is one of Australia’s major independent video game developers including self-distributed games based on original intellectual property (IP) and games developed in unification with the world’s largest studios such as Disney, Warner Bros and Nickelodeon. PLY has announced an agreement with Click Management Pty Ltd (Click), LazarBeam and Fresh to develop a new PC title that will be published globally on an anticipated date in late 2021. 

Robust Q2FY21 Results: PLY has registered a robust Q2FY21 results. Unaudited customer revenues have registered a 66% QoQ increase to $3.13mn and customer receipts has seen 84% QoQ increase to $3.19mn. Moreover, PLY’s daily active users (DAU’s) have significantly grown to 237,000, up 249% QoQ in Q2FY21 while installs were increased to 5.8mn up by 241% QoQ, average sessions per day have registered 365% QoQ growth to 1.75mn. PLY has registered an increase in its cash reserves by $12.46mn to $16.07mn during Q2FY21, this is mainly due to cash generated from financing activities of $13.53mn generated from pre-IPO convertible notes issue, IPO and less the cost for raising capital. PLY has surplus cash after the IPO proceeds to pay off its liabilities and to utilise funds for its operational activities.

Quarterly Growth (Source: Company Reports)

Presence in Fastest Growing Industry: PLY is present in mobile gaming space which is the largest and fastest growing segment within the global gaming industry. The mobile gaming segment is growing at 13.3% YoY with a market revenue of US$77.2bn in 2020 whereas the global games industry is expecting to generate revenues of US$159.3bn in 2020. Asia Pacific is the largest market for the gaming industry.

Stock Recommendation: After a joint agreement with game influencers LazarBeam and Fresh, PLY has plans to innovate design concepts to develop a new PC title that can be published globally with an anticipation to release in late 2021. In the last one month, PLY has increased by 9.210%. The stock is currently trading above the average 52-weeks’ price level range of $0.260-$0.490. On the technical analysis front, the stock has a support level of ~$0.344 and resistance of ~$0.459. Considering a robust Q2FY21, a significant increase in active users and installs, presence in a fastest growing industry, and a positive impact from Covid-19 along with key risks associated with the business, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.415 as on 23 February 2021.

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

BikeExchange Limited

BEX Details

In a Strategic Partnership: BikeExchange Limited (ASX: BEX) is founded in 2007 in Australia. BEX has more than 600,000 products available from 1450 retailers and 1500 brands. BEX operates through 4 hubs (North America, EU, ANZ and LATAM) which serves eight countries. BEX has become the title sponsor of the Green Edge UCI for men and women professional cycling teams. BEX has announced its strategic partnership with Auteco Mobility to scale up in LatAm region. Auteco Mobility along with its associated parties have purchased 10M BEX shares at an IPO price of 0.26/share.  

Change in Director’s Interest: BEX’s Director, Jade Leigh Wyatt has disposed 161,710 shares for value consideration of $42,044 as declared on 12 February 2021.

HY21 Highlights: During HY21, BEX has registered a 116% growth in lookthrough total transaction value. The Average Revenue per Account (ARPA) has registered a 6% growth to $1,582 on back of improving subscriber and an increase in brand numbers. In addition, BEX has registered a significant growth in traffic sessions by 77% and e-commerce transactions by 154% to 24,585. Lookthrough e-commerce has registered a 325% growth in its revenues as commission rates increased from 5.5% to 7.8%.

Revenue Streams Growth (Source: Company Reports) 

Outlook: As per the company reports, BEX is expecting to see a strong growth in e-commerce with an improvement in commission and conversion rates. Media revenues are expected to increase in Q4FY21 on back of revitalized media partnerships and BEX expecting to launch some new products to boost its revenues.

Stock Recommendation: In the last one week, the stock has corrected by 11.76%. 52-week high and low-price range of the stock stands at $0.225-$0.320. We have a mixed view on the stock considering mixed performance for revenue streams, operating at a nascent stage, high competition in the industry and an absence of catalysts. Hence, we give an “Avoid” rating on the stock at the current market price of $0.225, down by 6.25% as on 23 February 2021.

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

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