RCG Corporation Ltd

RCG Details
·         Downgraded full-year guidance: RCG Corporation Ltd (ASX: RCG) stock lost over 27% on May 01, 2017 after the company announced that the group’s sales performance across all business units for the months of March and April combined have fallen short of management’s expectations. Hence, they downgraded their full-year guidance for the second time in just over two months with a more cautious outlook for the remainder of the financial year. RCG expects the underlying EBITDA guidance to a range of $74 million - $80 million for FY 17. In February RCG had instead of $90 million, had revised its underlying EBITDA to be between $85 million and $88 million. Moreover, RCG considers the recent fall in share price is due to the declining consumer confidence, subdued wage growth, concerns surrounding the housing market, increasing interest rates. Market entry of Amazon would also hurt the Australian retail landscape. RCG also expressed about the uncertainty in the market regarding the intentions of the former owners of Accent when their share escrow expire in May 2017.

·         Recommendation: RCG stock has fallen over 46.4% in the last six months (as of April 28, 2017). On the other hand, the group is integrating the Hype DC acquisition into its wider business and planning to unlock the additional strategic benefits that arise, including strengthening RCG’s market leadership by enhancing the vertical strategy and key partnerships with suppliers, landlords and service providers. Given the prevailing uncertainty, we give a “Hold” recommendation on the stock at the current price of $ 0.60

Quintis Ltd

QIN Details
·         Operational Update: Quintis Ltd (ASX: QIN) stock also fell over 5% on May 01, 2017 despite some positive news. The company’s pharmaceutical subsidiary, Santalis Pharmaceuticals, has now held its end of Phase 2 meeting with the U.S. Food and Drug Administration. After the meeting and the written feedback from the FDA, Santalis now has a well-defined U.S. regulatory pathway to move into Phase 3 for the study of Quintis’ Sandalwood Album oil to treat HPV skin warts in a pediatric population. Further, Santalis expects to initiate Phase 3 trials for this program within twelve months. Moreover, the Australian Patent Office has issued Santalis Patent No. 2011223758 containing sixteen claims covering the use of sandalwood oil compositions to treat a variety of cancers including leukemia and solid tumors, such as bladder cancer. Additionally, regarding the progress on a new wood sales contract to China, the company has confirmed it has selected its preferred off-take counterparty and negotiations are well advanced, however no final sales agreement has yet been signed. On the other hand, the group granted a put option in 2014 to an institutional plantation owner for selling 400 hectares of plantations to them at a pre-determined price.The terms of this option were amended in July 2016 so that the put option was exercisable by 30 April 2017, but the group again extended this which might be exercised between 10 July 2017 and 14 July 2017 or between 11 December 2017 and 15 December 2017.

·         Recommendation: We give a “Hold” recommendation on the stock at the current price of $ 1.14

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.