Automotive Holdings Group Ltd

AHG Details
Footprint Expansion: Automotive Holdings Group Ltd (ASX: AHG) lately announced that KTM Australia and Husqvarna Motorcycles will relocate head office and warehousing facilities to Sydney early in 2017. This comes at the back of group’s efforts to move closer to the markets. In December 2016, AHG opened east coast corporate headquarters at Prestons in Sydney’s Western Industrial Hub. The group has expanded its work environment over 4.2 hectare. AHG also extended its sponsorship of the iconic brand, Melbourne Football Club, in AFL and the sponsorship is said to be funded within existing marketing budgets. The group has about 191 franchises at 110 dealerships across four Australian states and New Zealand. In FY16, AHG’s net operating profit (including adjustments for one off effects), increased by 3.2% on the previous year to a record $97.2 million while statutory profit after tax rose by 2.2% to $90.1 million. There was a 3.3% growth in operating earnings per share and an increased fully franked full year dividend of 22.5 cents per share was paid to the shareholders. The group’s new vehicle sales outlook seems to be strong and growth in automotive business is expected to be on track. Roll-out expansion of EasyAuto123 fixed price retail format is expected to target growth in used cars. Efforts for performance improvement is expected for Refrigerated Logistics. ASIC reviews of F&I commissions are being monitored and no material impact is expected in FY17. The stock has fallen 8.67% in last six months (as at February 02, 2017) and is trading at reasonable levels. We give a “Buy” recommendation on the stock at the current price of $ 3.90


AHG Daily Chart (Source: Thomson Reuters) 

Advanced Braking Technology Ltd

ABV Details
Significant growth in half year to December 31, 2016: Advanced Braking Technology Ltd (ASX: ABV), the developer of innovative braking systems with main product being the Sealed Integrated Braking System (SIBS®), recently announced its unaudited results for the half-year to December 31, 2016 wherein the group highlighted 50% growth in trading revenue of $2.64 million for the first-half compared with same period in 2015/16. The growth came at the back of rising demand from domestic and international mining customers. A profit of $0.025 million in the month of December 2016 led to an improved first-half operating loss of $0.39 million. The group reported for a significant improvement in operating cash flow performance while total revenue was up 42.6% to $3.16 million and expenses fell a further 14.6% to $2.03 million. ABV reported for strong international orders in January along with significant orders from Mongolia, Canada and Indonesia and stronger domestic demand for failsafe product range. 

Addressable Market (Source: Company Reports)
 
The group is set to execute its Terra Dura® roll out in the coming six months. The group also raised $1.250 million in convertible note offer in December 2016. The stock has slipped 22% in last six months but rose 16.67% in last five days alone (as at February 02, 2017) at the back of the performance updates. We give a “Speculative Buy” recommendation at the current price of $ 0.007


ABV Daily Chart (Source: Thomson Reuters) 

AMA Group Ltd

AMA Details
Acquisitions’ integration proceeding well: AMA Group Ltd (ASX: AMA), one of the automotive aftercare and accessories market players in Australia, reported for strong balance sheet with highly cash generative capability, and strong operating performance driving 2016 full year results exceeding previous guidance of $28 million to $29 million. As per the FY17 year-to-date (YTD) highlights, three sites have been acquired in Victoria with an earn-out. Two sites are in Queensland and have been acquired with no earn-out. The group has also acquired Joondalup Smash Repairs, which operates a site in Wangara, Western Australia, on an earn-out basis. Integration of the acquired sites is proceeding as per the plan. 

FY17 YTD Acquisition Highlights (Source: Company Reports)
 
AMA has indicated for strong pipeline in growth opportunities in panel repair market. We give a “Speculative Buy” recommendation at the current price of $ 1.02


AMA Daily Chart (Source: Thomson Reuters)

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