Tabcorp Holdings Limited

TAH Details
· Weak first half of 2017 results impacted the stock sentiment: Tabcorp Holdings Limited (ASX: TAH) stock fell over 5.3% on February 02, 2017 impacted by the weak first half of 2017 results. Statutory NPAT fell 28.1% to $58.9 million while EPS reached 7.1 cents per share, due to significant items after tax of $43.8 million. Excluding significant items, the group’s EBITDA rose 1.7% to $270.4 million. TAH reported an interim dividend of 12.5 cents per share, as compared to 12.0 cents in the prior corresponding period (pcp). On the other hand, the group reported a decent SRC results boosted by TAB mobile app, product launches and a new brand and marketing campaign. Venue digital commission program started reinforcing the alignment with their retail partners. Qld jackpot pooling has started while new Mega Millions game was launched in NSW. TAH has announced for merger with Tatts Group to create a diversified gambling entertainment group. The group’s INTECQ acquisition was finished, offering a platform for better growth in Gaming Services.

· Recommendation: Trading at a higher P/E, we give an “Expensive” recommendation on the stock at the current price of - $ 4.50 

Performance by business segments (Source: Company Reports) 

Asaleo Care Limited

AHY Details
· Weakness in sentiments: Asaleo Care Limited (ASX: AHY) stock lost over 5.3% on February 02, 2017 with some weakness in stock sentiments. The group had earlier announced for a weak FY16 result, and forecasted an underlying EBITDA fall of over 10% with the underlying NPAT loss of over 15%. Fluctuations in A$ and NZ$ coupled with rising pulp costs would impact their Tissue division. On the other hand, Personal Care division was expected to benefit from the rising prices offsetting the performance, especially in the first half.

· Recommendation: AHY stock rallied over 8.2% in last six months (as at February 01, 2017) and still trading at a reasonable P/E. We give a “Hold” recommendation on the stock at the current price of - $ 1.43

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