Airtasker Limited

ART Details

Successful Listing of the Company: Airtasker Limited (ASX: ART) operates an online marketplace. The market capitalisation of the company as on 14 April 2021 stood at ~$510.77 million. The company has listed on the ASX on 23 March 2021, following the completion of a successful IPO. The IPO was over five times oversubscribed by institutional and retail investors.

Ceasing to be a Substantial Holder: As per a recent update, the company has announced that Credit Suisse Holdings (Australia) Limited has ceased to be a substantial holder of ART effective 26 March 2021.

H1FY21 Performance Update: The company has reported an improvement in revenue during the period to $12.61 million in H1FY21, compared to revenue of $9.37 million in H1FY20. The net loss narrowed down to $2.05 million during H1FY21, compared to a loss of $7.07 million in the prior corresponding period. It ended the period with a cash position of $14.72 million as of 31 December 2020.

H1FY21 Financial Performance (Source: Company Reports)

Outlook: As per the management, the operational and financial performance has been strong since the commencement of H2FY21, despite the impact of the COVID-19 pandemic and the following lockdowns. The company has estimated an Enterprise Value/FY21F Revenue at 9.3x during the disclose of the offer stats for the stock.

Key Risks: The company operates an online marketplace and is dependent on technology for the seamless functioning of its business. There is a risk that ART or the related team may not be able to maintain their information technology systems, thereby causing disruption to the marketplace.

Stock Recommendation: As per ASX, the stock of ART is trading below its average 52-weeks’ levels of $0.880-$1.965. The stock of ART gave a negative return of ~7.58% in the past one week. On a technical analysis front, the stock of ART has a support level of ~$1.261 and a resistance level of ~$1.421. On a TTM basis, the stock of ART is trading at an EV/Sales multiple of 22.2x, higher than the industry median (Technology) of 5.9x. Considering the valuation on TTM basis, recent listing of the company, net loss during the period, volatile price movements and the key risks associated with the business, we give an ‘Avoid’ rating on the stock at the current market price of $1.280, down by 1.539% as on April 14, 2021. However, we will keep an eye on the stock and any change in growth catalyst in the future will lead to the reassessment of rating.

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

Delorean Corporation Limited

DEL Details

Commenced Trading on ASX: Delorean Corporation Limited (ASX: DEL) is a developer of bioenergy infrastructure and a retailer of electricity. The market capitalisation of the company as on 14 April 2021, stood at ~$59.865 million. The company has commenced trading on the ASX from 12 April 2021, after a successful IPO where it has raised around $14 million.

Business Model: DEL has been developing a portfolio of build, own, and operates bioenergy generation assets in Australia and New Zealand. The company’s operations divert organic waste from landfill and generate renewable electricity and gas in the process. It has delivered revenue of $31.2 million in FY20 and an EBITDA of $3.6 million during the period.

Notice of Initial Substantial Holder: The company has announced that Hamish Jolly has become a substantial holder of the company on 12 April 2021 with a relevant interest of 44,750,000 ordinary shares.

H1FY21 Results Update: During the period, the company reported revenues of $12.98 million, compared to revenue of $16.80 million in the previous corresponding period. However, it has posted an improvement in the net profit with an increase of ~33% to $1.35 million during the same period under consideration. There was also an improvement in the cash position of the company to $4.81 million as of 31 December 2020.

H1FY21 Financial Performance (Source: Company Reports)

Outlook: The company is well-positioned to make use of its market expertise and extend its present services-based business into an energy infrastructure asset owner and operator. It expects a statutory EBITDA of $3.1 million adjusted for costs in FY21.

Key Risks: The company's line of business exposes it to energy price fluctuations in the Wholesale Energy Market and the National Energy Market. Moreover, the onset of the COVID-19 pandemic may have a further impact on the business of the company with an unplanned shutdown of generation assets.

Stock Recommendation: The company has total shares of 179,078,280 following the completion of the IPO. As per ASX, the stock of DEL is trading below its average 52-weeks’ levels of $0.300-$0.435. On a technical analysis front, the stock of DEL has a support level of ~$0.288 and a resistance level of ~$0.337. Considering the recent listing of the company, decline in top-line, volatile price movements, the possible impact of COVID-19 pandemic on its operations and the key risks associated with the business, we give an ‘Avoid’ rating on the stock at the current market price of $0.290, down by 13.433% as on April 14, 2021.

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

Note: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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