Emerchants Ltd

EML Details
Strong topline growth:Emerchants Ltd (ASX: EML) reported revenues of $23.3 million, up 61% and EBITDA of $5.5 million for FY16. Gross profit margin was at 78%. The company was having 850 plus programs across various countries while loads to accounts were at $768.5 million.  For first quarter of FY17, gross profit increased 218% while the company expects significant growth in Q2FY17, due to seasonal improvement during the period. Furthermore, the company has signed an agreement with Caesars Entertainment and it is the first enterprise client for company’s M-card program. Caesars is the largest operator of casinos in North America with 40 casinos. The company is at the final stages of implementation for bet365 UK launch and expects bet365 UK launch to act as catalyst for other gaming operators to follow. Emerchants have also signed multiple B2B virtual payment agreements and programs with Sprint, Wide Open West, Clarcor and Midwest Recycling are in implementation phase to be launched in January 2017. The company has no debt and is positioned to be able to take advantage of international growth opportunities.  We rate the stock as a “Speculative Buy” at the current market price of $ 1.86

 
EML Daily Chart (Source: Thomson Reuters) 

Adacel Technologies Ltd 

ADA Details
Leading player in USA:Adacel Technologies Ltd (ASX: ADA) has over 90% ATC simulation market share in the US with install base of 341 air traffic training simulators with core offering of MaxSim. The company says US civil market penetration remains small but international market penetration provides additional upside potential. The company has won all major large-scale simulator system deployment contracts in the USA.
 

Historical performance (Source: Company Reports)
 
For FY16, the company reported a 14.3% rise in revenues to $47.9 million while the gross margin was at 45.2%. PBT was almost doubled from $5.9 million to $ 10.8 million. The company reported an EPS of 11.63 cents and paid dividend of 3 cents. We give the stock a “Speculative Buy” at the current market price of $ 2.66

 
ADA Daily Chart (Source: Thomson Reuters) 

SKY and Space Global Ltd 

SAS Details
Nano satellite technology, the growth driver:SKY and Space Global Ltd (ASX: SAS) is planning to deploy nano-satellite constellations into orbit in order to provide global voice, instant messaging and data communication infrastructure and services to the telecommunications and international transport industries. Recently, the company won the 2016 global Technology Innovation Award from leading market research firm Frost and Sullivan. The company has also signed an MoU with Virgin Galactic to evaluate the technical and commercial potential of its nano-satellite communications network to provide connectivity to its LauncherOne carrier aircraft. The company is well funded and should be able to launch its satellite with the funds it has currently. The company has signed strategic partnership agreement with US$7 billion Nasdaq listed global technology company. The company’s first wholesale customer, Sat-space Africa secured commercial contracts for a portion of the Company’s bandwidth from its 3 initial nano-satellites, following launch and activation in Q22017. Management said that with the launch of Company’s initial “3 diamonds” nano-satellites scheduled for Q22017, Sky and Space Global is also making preparations for the launch of the company’s full constellation of upto 200 nano-satellites from mid-2018.  We see the stock as a “Speculative Buy” at the current market price of $ 0.10

 
SAS Daily Chart (Source: Thomson Reuters) 

Appen Ltd

APX Details
Strategic UK acquisition: Appen Ltd (AX: APX) is acquiring 100% of Mendip Media Group (MMG) Ltd to enhance the provision of language services to government clients by the language resources division. The company secures the services of MMG for its specialized government work and also in secure transcription. Furthermore, the acquisition would strengthened the company’s position in the UK and throughout Europe. Facebook and Microsoft are its growing clients as demand for language data and services is increasing. Appen’s language resources and content relevance segments posted an increase of 41% and 54%, respectively in 1H FY16. Revenues were up by 49% to $53.4 million for half year. The company has zero debt on book and has healthy cash balance of $13 million. For full year, company guided revenues of $100 million with earning growth of 20%. On the other hand, ongoing volatility in the UK market might impact the group’s acquisition in the region. The stock is trading at a high P/E, and based on the foregoing, we feel the stock is “Expensive” at the current market price of $ 2.90

 
APX Daily Chart (Source: Thomson Reuters) 

Touchcorp Ltd

TCH Details
Issue of capital: Touchcorp Ltd (ASX: TCH) has lately appointed Nadine Lennie as Chief Financial Officer. The group is issuing 12.8 million shares to raise upto $25.6 million. This would offer the company with sufficient working capital to execute its growth objectives.  The company is planning an expansion of the Touch System Platforms utility from service module integration level to whole of platform consumption level. The company also expects high transaction counts for Afterpay and Change Up in the medium to long-term. Touchcorp has identified an immediate opportunity to accelerate the expansion of the Touch Systems Platform utility through the establishment and investment in the operations of a European business platform. The company would begin to receive transaction revenue from this venture in H2CY17. We recommend the stock as a “Speculative Buy” at the current market price of $ 1.86

 
TCH Daily Chart (Source: Thomson Reuters) 

Nearmap Ltd

NEA Details
Strong growth in Q1FY17:Nearmap Ltd (ASX: NEA) has addressed the speculation about the company undertaking a proposed capital raising. While the company continues to look at such options to progress business plan, no decision has been made for seeking further funding. NEA reported a 39% rise in revenue to $9.2 million in Q1FY17 as compared to $6.6 million in the corresponding quarter in 2016. This includes a 50% increase in US revenues from $0.4 million to $0.6 million. Annualized contract value of the US sales grew 53% to US$2.3 million. 

Global Aerial Imaging Market (Source: Company Reports)
 
Cash balance was at $10.9 million as on September 2016. Commenting on the performance the management said, the company had enjoyed the largest US sales quarter to date with over 400 customers and strong growth momentum in Australian business. It also added TomTom to its customer base in the United States. Considering the strong results and growing presence in the USA and Australia, the stock is a “Hold” at the current market price of $ 0.74

 
NEA Daily Chart (Source: Thomson Reuters)

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