Challenger Ltd
CGF Details
· Rising superannuation industry drove the group’s performance: Challenger Ltd (ASX: CGF) stock surged over 6.2% on October 18, 2016 as the group came out with a better than estimated funds under management performance. Assets and funds under management rose 3% to $62.0 billion during the quarter ended at 30 September 2016. The group’s Funds Management delivered a solid net flows across Fidante Partners as well as Challenger Investment Partners which reached $0.9 billion during the quarter. Meanwhile, the group’s Annuity sales generated a solid performance during the period which rose 46% against the same period of prior year driven by term annuities growth of 21% and outstanding quarterly lifetime annuity sales rise of 208%. CGF is well positioned to leverage the rising demand in the superannuation industry as Retirees are looking for longevity protection under annuities to supplement the Age Pension. The group’s lifetime annuity sales, now comprise 29% of total annuity sales, against 20% in the earlier quarter.
· Recommendation: We give a “Hold” recommendation on the stock at the current price of $ 10.00
Challenger Ltd life asset allocation (Source: Company Reports)
Nearmap Ltd
NEA Details
· Outstanding US business reiterates confidence: Nearmap Ltd (ASX: NEA) stock delivered an outstanding return of over 28.87% on October 18, 2016 driven by the encouraging sales from their US operations while the group revenue surged 39% over prior corresponding period. The group’s strong first quarter of FY17 sales indicates the group’s ability to target the huge US as well as domestic market opportunity. The group delivered the largest US sales quarter to date while the Annualized Contract Value surged 53% to US$2.3M. NEA was able to maintain its Australian business growth wherein the subscription revenue in Australia surged 32% to $8.6 million during the quarter against the prior corresponding period. Expanding business from current customers coupled with customer additions drove the performance across industries. The group’s OmniEarth partnership started to generate results wherein the initial two sales were delivered from the US based OmniEarth analytics using Nearmap imagery, generating royalty income to Nearmap as well as onsold Nearmap subscriptions to both OmniEarth customers.
· Recommendation: We have been bullish on NEA, wherein the stock generated 91.9% returns to its shareholders in the last six months (as at October 17, 2016). The stock is at its 52-week high price, and we give a “Hold” recommendation on the stock at the current price of $ 0.91
Improving subscription revenue from the US (Source: Company Reports)
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