Two stocks that performed well – South32 Ltd and Aconex Ltd

South32 Ltd

S32 Details
·         Strategic Alliance Agreement with AusQuest Limited: South32 Ltd (ASX: S32) stock surged over 2.96% on March 06, 2017 leading to a total rally of about 13% in the last five days alone. The group reported the statutory profit of US$620M in the first half of 2017 compared to the loss of US$1749M in 1H 16. S32 has restarted 22 pots at South Africa Aluminum and opportunistically has increased manganese ore production. Moreover, S32 has posted a 197% improvement in free cash flow to US$626M, including the distributions from equity accounted investments. Meanwhile, S32 has entered into a Strategic Alliance Agreement with AusQuest Limited under which the two companies would work together to develop a pipeline of high-potential exploration opportunities both in Australia and internationally. The targeted projects include copper, zinc and nickel projects in Australia and Peru and may include other mineralization styles and jurisdictions as agreed. Meanwhile, the Australian Competition and Consumer Commission issued a statement on the proposed acquisition by S32 of Metropolitan Collieries concerning lessening of competition in the supply of coking coal.The parties can submit respective responses and final decision will be announced in April 2017.

·         Recommendation: S32 stock rose over 33% in the last six months (as of March 03, 2017). We give a “Hold” recommendation at the current price of – $ 2.78

1H 17 Financial Performance (Source: Company Reports) 

Aconex Ltd

ACX Details
·         Reaffirmed FY17 outlook: Aconex Ltd (ASX: ACX) stock also rose over 6.76% on March 06, 2017. ACX has reported the revenue growth of 38% to $77.0 million in the 1H 2017 against $55.7 million for the prior year. This was $81.0 million on a constant currency basis, which is a growth of 45% year over year, reflecting a currency exchange impact of $4.0 million. The revenue growth was largely due to the acquisition of Conject Holding GmbH in March 2016 and strong international growth. The earnings before interest, taxes, depreciation, and amortisation (EBITDA) from core operations, excluding acquisition and integration costs, grew 9% to $7.4 million, as compared with $6.8 million the prior year. Moreover, there is ongoing transition of customers from project to enterprise agreements, particularly in ANZ and Enterprise agreements with ExxonMobil, AECOM and Fletcher Building. Additionally, ACX has reaffirmed its FY17 outlook, and expects revenue of $160-165 million and EBITDA of $15-18 million. Further, ACX expects the revenue growth of more than 20% over the medium to long term.

·         Recommendation: Owing to some level of volatility, the stock had fallen over 43.65% in the last six months (as of March 03, 2017). We maintain an “Expensive” recommendation at the current price of – $ 3.79
 

1H 17 Financial Performance (Source: Company Reports)

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