Livetiles Ltd



LVT Details

Building customer base and surpassing annualized subscription revenue: Livetiles Ltd (ASX: LVT) is set to launch its new digital workplace design based product, LiveTiles Cloud, delivered via Software as a Service. The product will expand LVT’s addressable market. The group has also surpassed $1 million of annualized subscription revenue at June 30, 2016 that is double the revenue at December 31, 2015. LVT also got license from multiple customers from the start of fourth quarter ending June 30, 2016. The customers are the United States Department of State, 21^st Century Fox, a large packaging company in Australasia, a major telecommunications company based in the United Arab Emirates, Nike, and real estate agency in the North-East region of the United States. In addition, LVT has received a research and development tax concession grant for the year ending June 30, 2015 of $1.5m and expects to receive a further research and development grant for FY2016 during the FY2017. Meanwhile, Rhipe has sold the shares partially of Livetiles by making a profit of $2.4m but retained an equity stake in Livetiles of 4.085 million shares. LVT stock has fallen 16.36% in the last three months but rose 6.98% in last five days (as of July 11, 2016). We give a “Speculative Buy” recommendation on the stock at the current price of  $0.235
 

LVT Daily Chart (Source: Thomson Reuters)
 
Vmoto Ltd



VMT Details

Expansion through Joint Ventures: Vmoto Ltd (ASX: VMT) plunged over fallen over 54.69% in the last six months (as of July 11, 2016) impacted by the challenging conditions in China but rose 7.4% in the last five days given some recovery on economic front. VMT has a joint venture with PowerEdge which is China based firm, while the first year of JV sales is expected to be slower as more efforts need to be put in for marketing and other activities. The company also faced the potential softening of China sales in 2016 due to certain local governments limiting electric bikes. The group has estimated FY16 NPAT in the range of $1.8m - $2.0m. On the other side, VMT has made joint ventures to enter electric three-wheel and four-wheel vehicle markets in the China market and the initial sales have started. Despite short term pressure, we believe that there is potential in the stock. Based on the foregoing, we give a “Speculative Buy” recommendation on the stock at the current price of  0.15
 

VMT Daily Chart (Source: Thomson Reuters)
 
Ziptel Ltd



ZIP Details

Support from Government for R&D: Ziptel Ltd (ASX: ZIP) stock corrected over 65.48% in the last six months (as of July 11, 2016), partly impacted by the rising competition from Skype, Viber and Whatsapp.
 


Zipt installs (Source: Company Reports)
 
On the other hand, the group received $1.1 million from the Australian Government’s Research and Development Tax Incentive Program, for activities conducted during FY 15. The company seems to be well funded as its monetization initiatives develop and gain traction. For FY 16, approximately 3.5 million claim has been identified which will be lodged after the financial year end as on June 30, 2016. Moreover, ZIP has achieved 10 million installs in April 2016 and 2 million installs in May. We give a “Speculative Buy” recommendation on the stock at the current price of $0.145
 

ZIP Daily Chart (Source: Thomson Reuters)
 
MainstreamBPO Ltd



MAI Details

Positive prospects: MainstreamBPO Ltd (ASX: MAI) estimates a solid FY 16 revenue growth of 30% as compared to the prior corresponding period while the group’s EBITDA is forecasted to reach over $2.3 million.
 


Strong client base and track record (source: Company Reports)
 
Moreover, MAI reported that they would be delivering a similar growth rate for the next three years as well. The stock rose by 8.93% in the last six months (as of July 11, 2016) but corrected over 12.86% in the last four weeks due to ongoing challenging conditions in the market. Accordingly, we give a “Speculative Buy” recommendation on the stock at the current price of $0.61
 

MAI Daily Chart (Source: Thomson Reuters)
 
Norwood Systems Ltd



NOR Details
 
Agreement with Devicescape: Norwood Systems Ltd (ASX: NOR) recently extended the closing date for its priority offer (under which eligible shareholders are entitled to apply for a parcel of either $2,000, $5,000, $10,000 or $15,000 worth of shares to raise up to $1.5 million) till July 22, 2016 in order to obtain more time to reach minimum subscription amount. NOR has also sealed an agreement with the World Wi-Fi Development Partner, Devicescape for providing automatic access to Devicescape’s curated virtual network of Wi-Fi hotspots. We maintain our “Speculative Buy” recommendation on the stock at the current price of $0.029
 

NOR Daily Chart (Source: Thomson Reuters)
 
Paragon Care Ltd



PGC Details

Growth contributed from acquisitions: Paragon Care Ltd (ASX: PGC) reported positive earnings for FY16 driven by organic growth and the integration of their last three acquisitions, Western Biomedical, Designs for Vision and Meditron. The company also lately announced for acquisition of Midas Software Solutions Pty Ltd for consideration of $2 million via issuing of fully paid ordinary shares in PGC, earn-out of 4x Midas PBT for incremental growth from FY16 to FY18, and 2.5% Midas revenue royalty for each founder contracted with PGC.
 


FY 16 Full Year Result Guidance (source: Company Reports)
 
In addition, PGC is expected to declare fully franked final dividend in line with its stated 40% to 50% dividend payout ratio in the full year results in August 2016. Paragon is moving from its current ERP software to SAP Hana and integrating with Paragon Care on a single business unit database. Despite the stock rising over 16.4% in the last three months (as of July 11, 2016), we believe that PGC is still trading at a reasonable level. Accordingly, we give a “Speculative Buy” recommendation on the stock at the current price of $0.70
 

PGC Daily Chart (Source: Thomson Reuters)

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