Crown Resorts Ltd

CWN Details
· Surprising performance in Melco Crown: Crown Resorts Ltd (ASX: CWN) stock surged over 7.9% on February 23, 2017 driven by the better than expected results and management changes. Despite the core performance pressure, the group’s share of Melco Crown Entertainment’s (MCE) normalized NPAT delivered a 14% rise while the reported NPAT surged 303.2% during the first half of 2017 performance. This result is mainly contributed by sale of over 40.9 million ordinary shares in MCE leading to a proceeds of $166.9 million. Consequently, the group’s Net operating cash flow for the period enhanced to $230.0 million against $200.9 million in the same period in last year. However, the group’s core Australian operations’ faced pressure and accordingly the overall revenue at their Australian resorts fell by 12.5%. Declining VIP program play revenue in Australia mainly contributed to this weakness as it fell by 45.3% during this period. Main floor gaming revenue also lost by 0.8%, as modest revenue growth in Melbourne was offset by softness in Perth. On the other side, CEO Rowen Craigie is quitting the group effective February 28, 2017, and Executive Chairman, John Alexander will assume the role. Management reported that after CEO’s exit, the group would adopt a simplified organization structure.

· Recommendation: After a fall of over 17% in the last six months (as of February 22, 2017), CWN stock is trading at a low level. Given a mix of results, we give a “Hold” recommendation on the stock at the current price of - $ 12.29
 

First Half Results (Source: Company Reports) 

Auscann Group Holdings Ltd

AC8 Details
· Government support to medical cannabis boosted the stock sentiment: Auscann Group Holdings Ltd (ASX: AC8) stock rallied over 18.5% on February 23, 2017 after the government assured a faster access to medical cannabis for patients. Federal Government reported that they would expedite authorization process for the controlled importation by approved providers to enable patients to have rapid access to the medication. Accordingly, the group intends to import high quality cannabis medicines from its partner Canopy Corporation, who is a leading medicinal cannabis player. With the government’s decision, the process for importing would be more streamlined to the group. Government forecasts Australia to have a store of imported medicinal cannabis products within eight weeks, while they are also focusing on the domestic cultivation and manufacture scheme.

· Recommendation: We give a “Speculative Buy” on the stock at the current price of – $ 0.32

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