Fisher & Paykel Healthcare Corp Ltd

FPH Details
· Legal issues prevail: Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) stock fell over 6.7% on November 23, 2016 impacted by falling market sentiments. On the other side, net profit after tax rose 26% year on year (yoy) to NZ$78.2 million in H1 FY17 and the group reported a 23% rise in interim dividend. Operating revenue rose 12% yoy to NZ$425.2 million, which is 16% rise on constant currency. FPH reported a 19% increase in Hospital operating revenue, and a 35% rise in revenue for consumables used in non-invasive ventilation, Optiflow and surgical applications. FPH also issued a positive outlook and expects a solid performance for the coming half as well, driven by supportive clinical research, and innovative products. FPH forecasted a full year net profit after tax in the middle of NZ$165 to NZ$170 million and an operating revenue of over NZ$880 million. However, the legal allegations on FPH by ResMed regarding the infringement of patents remain a concern. FPH stock fell over 14.7% in the last three months (as at November 22, 2016) and still trading at a higher P/E.

· Recommendation: We give an “Expensive” recommendation on the stock at the current price of - $ 7.77
 

Revenue Break-up (Source: Company Reports)

 Southern Cross Media Group Ltd

SXL Details
· Ongoing TV advertising pressure: Southern Cross Media Group Ltd (ASX: SXL) stock lost over 5.4% on November 23, 2016 leading to a total fall of about 15% in the last four weeks. On the other hand, SXL’s five-year television affiliation agreement with the Nine Network covering regional Queensland, southern New South Wales and regional Victoria gave some relief to investors given the struggling performance of the group. SXL continued to invest in their long-term relationships with Ten and Seven Networks as well as in other regional markets, in northern New South Wales and Tasmania. SXL regional radio business advertising revenues rose 6.1% on a yoy basis. On the other hand, the group’s core addressable market continued to be under pressure wherein the regional TV advertising market fell over 6.1%. EBITDA from metro radio operations fell over 11% to $51M, impacted by investment in flagship radio shows, including the national Hamish & Andy Drive show and Rove & Sam in Sydney Breakfast.

· Recommendation: We give an “Expensive” recommendation on the stock at the current price of - $ 1.31

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