Data#3 Ltd

DTL Dividend Details
 
Positive outlook: Data# 3 Ltd (ASX: DTL) recently issued a positive outlook and expects its first half of fiscal 2016 NPBT to be in the range $5.5 to $6.5 million, better than the prior corresponding period’s NPBT of $5.2 million. The group delivered a strong revenue growth of 4.4% year on year (yoy) to $870.5 million in the fiscal year of 2015 while gross profit rose by 8.9% yoy to $129.5 million during the period. The group is strengthening itself to target the booming Hybrid cloud services opportunity and acquired Business Aspect and invested in Discovery Technology to build strong consulting services and Wi-Fi analytics capabilities. DTL was chosen as the Tier 1 Microsoft Cloud Solutions Provider (CSP) enabling the firm to directly deal with Microsoft and other customers.
 

Revenue performance over the years (Source: Company Reports)
 
The group is also pursuing other opportunities like security apart from cloud, by implementing a national security practice which could leverage its security consulting expertise in Business Aspect, and in mobile enterprise applications. Meanwhile, DTL stock surged over 32.69% in the last six months (as of January 08, 2016) and trading at a slightly high P/E. We give a hold recommendation on this dividend yield stock at the current price of  $1.075
 
 
DTL Daily Chart (Source: Thomson Reuters)
 

Link Administration Holdings Ltd.

LNK Details

Improving Australian superannuation fund administration market presence: Link Administration Holdings Ltd (ASX: LNK) has been targeting growth via its business combination strategy and accordingly generated over 30 business combinations in the last 10 years to build its client bases as well as product and regional base. The group made a service contracts with Superpartners as a part of the tender process in 2014 and estimates to derive these acquisition synergies in fiscal year of 2016. Meanwhile, LNK already developed a 30% market share in the Australian superannuation fund administration market, and invested over $300 million in proprietary technology platforms since the last nine years. Accordingly, the group generated a compounded annual revenue growth of 23% during fiscal year of 2002 to 2015.
 

Fiscal year of 2016 revenue contribution forecasts (Source: Company Reports)
 
Management estimates a dividend payout ratio in the range of 40% and 60% of the Group’s annual NPATA during fiscal year of 2015 while the dividend is expected to be over 56.5% of FY2016 pro forma NPATA before significant items. On the other hand, we believe that group’s recent IPO price range was fully priced. Link shares are trading close to the 52-week high price. We still believe that the stock is expensive at the current price.
 
 
LNK Daily Chart (Source: Thomson Reuters)
 

Megaport FPO

 
Focusing on US and Europe Markets: Megaport FPO (ASX: MP1) recently made its debut on ASX to raise over $25 million (as per prospectus) to expand its North America, Europe, and Asia markets. The group intends to even expand its capabilities and penetrate further in its existing markets. MP1 stock rallied over 58.46% since its listing on December 17(as at January 08, 2016). We believe the stock is trading at higher valuations and accordingly give an expensive recommendation on the stockat the current price.
 
 
MP1 Daily Chart (Source: Thomson Reuters)
 

Hansen Technologies Ltd

HSN Dividend Details
 
Diversified revenue exposure:Hansen Technologies Ltd (ASX: HSN) stock surged over 28.29% (as of January 08, 2016) in the last one month as management issued a positive outlook for the first half of 2016 and forecasts an operating revenue in the range of $72 million to $74 million while its EBITDA margin is expected to be on the top end of its expected range of 25-30%. The group has been building its client base and signed a multi-year license contract for its ICC Customer Care and Billing with global Hinduja Group. HSN also enhanced its capital position to fund its TeleBilling acquisition and accordingly raised $27 million at $2.17 via Institutional placement ($15 million) and Share purchase plan ($12 million).
 

Hansen Technologies fiscal year of 2015 performance (Source: Company Reports)
 
With TeleBilling acquisition, HSN strengthened its billing and customer care products, developed established European Telecommunications and Pay TV clients, expanded its capabilities to Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). HSN built a diversified currency revenue base with Australian dollar accounting 31% of FY15 revenue while expects a lower proportion of AUD in the coming periods as HSN is focusing on offshore base. On the other hand, the recent stock rally placed HSN at expensive levels, while Hansen also has a low dividend yield.
 
 
HSN Daily Chart (Source: Thomson Reuters)
 

Mobile Embrace Ltd

MBE Details
 
Growth expected to be driven by new deal: Mobile Embrace Ltd (ASX: MBE) stock rallied 111.11% in the last three months but fell 3.8% in the last five days (as at January 08, 2016). The recent news about Australian Turf Club (having multi-outlet sporting venue) implementing the mobile payment application, Clipp wherein MBE has a strategic investment, seems to be a boost for the company. The company has also secured an agreement with the major Asian telecommunications group Axiata which extends its global carrier billing reach with five potential new territories and strengthens the addressable market in Malaysia with the opportunity to reach more than 260 million customers. The company now has agreements with the top three telecommunications groups and existing agreements provide access to approximately 1 billion mobile subscribers. Axiata is controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia with significant strategic stakes in India and Singapore.
 

Revenue and EBITDA Growth (Source: Company Reports)
 
MBE has also announced a significant expansion of its UK performance marketing operations with the launch of one of the largest consumer databases in the UK, which includes details for 43 million customers. The company has also provided guidance on revenue and earnings for the first half of FY 2016, which is expected to be a record performance. Revenue is forecast to be greater than $ 27 million representing a 92% increase on the previous period and EBITDA is anticipated to be $ 7.5 million while reported EBITDA is expected to be in excess of $ 3.5 million. We recommend a speculative buy for the stock at the current price of  $0.385
 
 
MBE Daily Chart (Source: Thomson Reuters)
 

Migme Ltd

MIG Details
 
Asset acquisition to steer performance: Migme Ltd (ASX: MIG) has fallen 12.82% in the last one month (as at January 08, 2016). The company has advised that the consideration payable for the acquisition of the assets of Shopdeca entails cash payment of USD 710,000, USD 400,000 in fully paid ordinary shares that are to be held in voluntary escrow for six months from completion, and USD 65,000 in fully paid ordinary shares that are to be held in voluntary escrow for 12 months from completion. Completion of the acquisition is subject to conditions, including finalising due diligence to the satisfaction of the company and execution of legally binding definitive agreements. Shopdeca is an Indonesian business with retail sites and b2b sales providing curated lifestyle products and the acquisition will provide expansion for e-commerce operations in Indonesia and the region.
 

Quarterly Key Metrics (Source: Company Reports)
 
The integration is expected to be completed in the first half of 2016. The company has also announced the acquisition of Hipwee, an established social news site in Indonesia, which delivers curated original and community generated content. The highlights of the quarter ended September 2015 operations show a further quarter on quarter growth of Monthly Active Users up by 26% and quarter on quarter cash receipts up by 68% to $ 3.7 million. A successful $ 10.1 million placement to strategic shareholders and institutions resulted in cash reserves of $ 10.8 million at the end of the quarter. The company continues to grow its user base in emerging markets, particularly Indonesia, India and the Philippines. It is also putting efforts towards opportunities related to its private mobile chat based services. We consider that this company has potential for growth and recommend a buy for the stock at the current price of  $0.905
 
 
MIG Daily Chart (Source: Thomson Reuters)
 

Melbourne IT Ltd

MLB Dividend Details
 
Development of SMB solutions business and returning to growth in core product categories: Melbourne IT Ltd (ASX: MLB) shares have surged 46.53% in the last one year (as at January 08, 2016). The company intends to integrate acquisitions to generate operational and financial benefits, prevent revenue drop in core SMB product categories and returning to growth, develop SMB solutions business and ES managed services and offer clients a larger suite of digital services. For FY 2015, the company sometime back stated that statutory EBITDA is expected to be in the range of $ 16 million-$ 18 million, underlying EBITDA in the range of $ 20.5 million to $ 22.5 million, and underlying EPS in the range of 10 cents and 11 cents per share. The interim dividend was 1 cent per share fully franked and the full year dividend is expected to be the same as FY 2014. In FY 2016, the board will look to adopt a longer term dividend policy. For the half year ending 30 June 2015, the statutory EBITDA was $ 5.2 million including contributions from Uber Global and Outware Systems and the underlying EBITDA was $ 10 million. Revenues grew by 16% to $ 69.2 million, net profit after tax was $ 1.2 million (loss of $ 4.6 million in the previous period), EBITDA margin grew from 6% to 8% and EPS was 1.28 cents per share, compared to a negative figure of 5.25 cents in the previous period). However, we believe that considering the future prospects the share is overvalued at the current stock price.
 
 
MLB Daily Chart (Source: Thomson Reuters)
 

SMS Management & Technology Ltd

SMX Dividend Details
 
Record Result: SMS Management & Technology Ltd (ASX: SMX) fell 42.38% in the last three months (as at January 08, 2016). Revenue in FY 2015 was a record with 13% growth on the previous year on the back of strong demand from financial services, telecommunications, and media and technology industry sectors. EBITDA was up 37% to $ 28.7 million and net profit after tax up by 34% to $ 17 million. The growth is the result of improved billable utilisation, stabilization of project margin development of managed services and a continuing focus on cost management. Because of the improved result, the board declared a fully franked final dividend of 10 cents per share, which, together with the interim dividend of 7 cents per share, resulted in a full-year dividend of 17 cents per share, which works out to dividend payout of 69% of the net profit after tax. However, we believe that the stock is expensive at the current price.
 
 
SMX Daily Chart (Source: Thomson Reuters)

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