Finbar Group Limited


FRI Details

Ongoing addition of projects in pipeline:Finbar Group Limited (ASX: FRI) has secured three stage project in Canning Bridge Precinct to yield 440 apartments of the value more than $350 million. For this the design works have started and the stage 1 is expected to be launched in early 2017. Moreover, FRI got development approval for Arbor South, Springs Rivervale residential project of 132 apartments of estimated value $55 million. FRI’s joint venture has secured the project to develop the last remaining Landcorp lot sold at Springs Rivervale to make 150 apartments of the value of about $65m. Additionally, for FY 16, FRI has forecasted an operating profit of approximately $21m and the largest level of pre-sale contracts totaling around $451m. FRI expects the net profit after tax to be approximately $8m after investment property impairments totaling $13 million. FRI has $1.84 billion projects in pipeline with projects currently under construction including, Aurelia in South Perth, Concerto in East Perth, and Motive in West Leederville. Meanwhile, FRI stock has a good dividend yield and is trading at a reasonable P/E. FRI will be paying final dividend of AUD 0.040 on September 01, 2016. We give a “Buy” recommendation on the stock at the current price of $0.83
 

FRI Daily Chart (Source: Thomson Reuters)
 
Avjennings Ltd


AVJ Details

Strong FY16 performance: Avjennings Ltd (ASX: AVJ) reported FY16 revenue rise of 32.7% to $421.9m while PBT and earnings per share (EPS) surged 22% and 18.6%, respectively. Revenue growth was driven by changes in product mix and revenue share including the acquisitions of JV partner interests in Argyle and St Clair projects. In the first half ended 31^st December 2015, AVJ had reported the revenue growth of 57.9% to $187.2 million and EPS grew by 38.8% to 4.3 cents per share. FY16 results overall demonstrated company’s ability to maintain three consecutive years of dividend growth.
 

Earnings and Dividend Growth (Source: Company Reports)
 
The contract signings grew 5.5% for the year. AVJ had expected a stronger second half of fiscal 2016 and seem to have performed as per expectations. Meanwhile, AVJ stock has risen 34.62% in the three months (as of August 22, 2016), and still the stock has a decent dividend yield and is trading at a low P/E. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $0.695
 

AVJ Daily Chart (Source: Thomson Reuters)
 
Cash Converters International Ltd


CCV Details

New strategy to drive growth: Cash Converters International Ltd (ASX: CCV) has been served with a statement of claim lodged with the New South Wales Registry of the Federal Court of Australia by a Ms Kim McKenzie starting a class action claim on behalf of borrowers resident in Queensland who took out cash advance loans during the period from 28^th April 2010 to 30^th June 2013. CCV is vigorously defending the action. Moreover, there was a query from the ASX regarding the stock price and volume in May and CCV responded accordingly.
 

New strategy to drive profit and revenue growth (Source: Company Reports)
 
On the other hand, CCV has a new strategy for profitable growth. Master Franchisor role in United Kingdom has been regained while the company ceased operations for Carboodle and transits to new secured motor vehicle lending business. CCV gets benefits from the strong brand recognition and customer satisfaction levels. The company has returned to dividend with 2.0 (two) cents interim payment and had reported higher half-year net profit of $15.9 million against HY14’s $5.3 million loss. CCV’s full year results are due on August 30, 2016 and the company expects to take into account financial impact of strategic level changes which may be less than $35 million before tax. Trading at a decent dividend yield and lower P/E, we give a “Buy” recommendation on the stock at the current price of $0.50
 

CCV Daily Chart (Source: Thomson Reuters)
 
Liquefied Natural Gas Ltd


LNG Details

Managing cost & getting necessary approvals for the projects: Liquefied Natural Gas Ltd’s (ASX: LNG) indirect wholly owned subsidiary, Bear Paw Pipeline Corporation Inc. (Bear Paw), has got Nova Scotia Utility and Review Board approval to construct a 62.5 km natural gas pipeline from Goldboro to the proposed Bear Head LNG liquefied natural gas export facility in Point Tupper, Richmond County, Nova Scotia. The group got Nova Scotia Environment’s approval for the Greenhouse Gas Management Plan for this project. Moreover, in the quarterly highlights LNG focused on the complete marketing of Magnolia LNG’s offtake capacity to progress for financing into construction.
 

Project Portfolio (Source: Company Reports)
 
LNG has finalized Bear Head LNG regulatory permitting, engineering, and the marketing of liquefaction tolling capacity. LNG’s total cash position as at 30^th June 2016 was A$71.4 million and there is no debt. In addition, LNG has reduced staff for reducing the fixed cost. We give a “Buy” recommendation on the stock at the current price of $0.59
 

LNG Daily Chart (Source: Thomson Reuters)
 
Galaxy Resources Limited


GXY Details

Takeover of GMM:Galaxy Resources Limited (ASX: GXY) has acquired 96.74% General Mining Corporation Limited’s (GMM) and management is sending the compulsory acquisition notices to acquire all remaining GMM Shares. The combined company would have the Mt Cattlin project and is developing the Sal de Vida brine project in Argentina while also having the James Bay hard rock project in Quebec, Canada. The merger would also create Australia’s second largest lithium player. GXY has lately announced that Definitive Feasibility Study (DFS) on its Sal de Vida Project has reaffirmed the strong potential for a low cost and long life operation, and a post-tax net present value (“NPV”) of US$1.416 billion at an 8% discount rate (US$1.043 billion at a 10% discount rate) has been estimated. This project is expected to generate average annual revenues of US$354 million and average operating cash flow of US$273 million per annum. The revised total capital cost is now estimated at US$376 million.
 

DFS Financial Comparisons (Source: Company Reports)
 
Meanwhile, GXY stock rose over 97.5% in the last six months (as of August 22, 2016); and based on the potential, we give a “Speculative Buy” recommendation on the stock at the current price of $0.405
 

GXY Daily Chart (Source: Thomson Reuters)
 
Countplus Ltd


CUP Details

Subsidiary sale to have positive impact:Countplus Ltd (ASX: CUP) had reported for 18.7% rise in operating profit (EBITA) to $12.65 million while net profit before tax jumped up to $10.66 million, a 22% rise, and consolidated NPAT was up 2.5% for 1HFY16. The company’s investment in Class Limited has been an outstanding investment while CUP enhanced shareholding in Hood Sweeney (26% to 32%) following share buyback. However, CUP’s accounting division has faced challenges. Countplus has also executed an unconditional agreement to sell a Brisbane based member firm, Change Accountants & Advisors and its subsidiary to existing principal management team for a cash consideration while the company expects to have a minor positive impact in 2016. Meanwhile, CUP stock has risen 29.41% in the six months (as of August 22, 2016), and we give a “Speculative Buy” recommendation on the stock at the current price of $0.88
 

CUP Daily Chart (Source: Thomson Reuters)

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