Aconex Ltd

ACX Details
· Weak trading update dragged the stock lower: Aconex Ltd (ASX: ACX) stock fell over 45.1% on January 30, 2017 due to their weak trading update. The group now expects a revenue growth of 30-34% for fiscal year of 2017 against their earlier update of 39-46% rise. This slip in estimates was mainly due to lower than expected first half of FY17 sales performance in U.K. and the Americas even though their ANZ, Asia, Europe (excluding U.K.) and Middle East regions were on track. Major proportion of long term contracts led to decrease in further short term revenue. Moreover, GBP and Euro currency fluctuations also impacted the stock sentiment. Brexit also impacted the buying decisions. Americas division’s performance was slower than expected impacted by U.S Presidential election. 

New FY17 estimates (Source: Company Reports)
 
· Recommendation: ACXstock already fell over 33% in the last six months and still trading at an unreasonable P/E. We maintain our “Expensive” recommendation on the stock at the current price of - $ 3.10, ahead of their first half of 2017 results scheduled to be released in February, 2017. 

Spotless Group Holdings Ltd

SPO Details
· Legal shareholder class action against the group: Spotless Group Holdings Ltd (ASX: SPO) fell over 5.1% on January 30, 2017 as the group announced about noting IMF Bentham Limited’s proposal to fund on a “conditional” basis claims of certain current and former shareholders against SPO. The group also stated that no proceedings have been served against it. SPO further stated that they have been under compliance and would strongly defend the proceedings in the event of commencement. The group recently appointed Simon McKeon AO to their board. Moreover, SPO had indicated for a solid pipeline of projects and negotiated over $480 million of renewals and got $130 million of new contracts comprising further three additional PPP contracts. The group reported sixteen PPP contracts, with seven mobilizing in 2017. As a result, these contracts promise solid source of long dated stable earnings for the group once mobilized. SPO is also focusing on innovation programs which would leverage technology to drive growth and customer experience. In FY16, the group launched smarter solutions like automated guided vehicles in healthcare, food and drink ordering apps, as well as other data, lighting and electrical technologies into their service offering.

· Recommendation: SPO stock is trading at a reasonable P/E. We give a “Buy” recommendation at the current price of - $ 0.93

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