Dev Clever Holdings Plc

Dev Clever Holdings Plc (LON: DEV) is a UK based Software & Computer Services Company. The Company uses technology in three core channels, i.e. engage, experience and educate.

Investment Highlights - Dev Clever Holdings Plc – Expensive at GBX 24.56

• Despite the business momentum, the Company rely on external funding to manage operational performance, failure to do so will result in liquidity risk.
• The Company has a negative ROE (return on equity) of 94.5% in H1 FY2020 and is significantly lower than the industry median. The ROE remained in the negative zone from last three years.
• As per valuation metrics, EV/Sales & Price/Book multiples of the Dev Clever Holdings Plc are currently higher as compared to the corresponding multiples of the Software & IT Services industry, reflecting overstretched valuations.
• From the technical standpoint, 14-day RSI is in the overbought zone and is supporting downward movement (around 73 level), which means the stock price could decline in the short term.

Key Risks

• The disruptive technology trends and cybercrimes also impose a risk to the business model.
• The Covid-19 pandemic is having material negative impacts on all aspects of the business.

Recent News

On 2 February 2021, Dev Clever Holdings announced that it had signed Equity Subscription Agreement with One Nine Two Pte Limited to raise £10 million.

Trading Update (released on 10 September 2020)

• The Company continue to make progress in line with strategy, and partnership agreements with Veative and Lenovo are attracting interest from customers.
• The Company is actively working with partners on geographical extensions and completed equity tranche of £2.0 million.
• The Company has won the largest commercial contract to undertake COVID-19 careers impact assessments, worth US$1.2 million.

One Year Share Price Chart

(Source: Refinitiv, chart created by Kalkine Group)

Conclusion

The Company confirmed that it is trading for FY2020 stood in line with management expectations and is benefitted by an acceleration in forward momentum. Despite the unprecedented period due to covid-19, the Company’s business and underlying growth dynamics continue to deliver decent performance. DEV continues to pursue value accretive opportunities based on increasing business momentum and new equity funding. The Company heavily rely on external liquidity to manage its working capital needs. Presently, the Company is trading near a 52-week high, raising doubts at its upside potential at current prices.

Based on the factors as highlighted above, we believe the stock of Dev Clever Holdings Plc is “Expensive” at the current price of GBX 24.56 (as on 3 February 2021, before the market close at 8:05 AM GMT), with support from few catalysts needs to be evaluated at a later stage such as raising of new additional funding.

Alba Mineral Resources Plc

Alba Mineral Resources Plc (LON: ALBA) is an FTSE-AIM listed mining Company. The Company is engaged in the business of exploration of natural resources with a focus on base metals, uranium, graphite and oil and gas.

Investment Highlights - Alba Mineral Resources Plc – Avoid at GBX 0.35

• The Company do not generate any revenue in the first half of FY2020, with a significant decline in cash balance compared to FY2019 data.
• In the last one month, the Company delivered a negative return of ~40.80% and delivered lower returns compared to the benchmark Index (FTSE-AIM Index).
• As per valuation metrics, Price/Book multiple of the Alba Mineral Resources Plc is currently higher as compared to the corresponding multiple of the Metals & Mining industry, reflecting overstretched valuations.
• From the technical standpoint, shares were trading below the short-term support level of 20-day (GBX 0.39) simple moving average prices, which reflects a downtrend in the stock and can decline further.

Key Risks

• The volatility in the commodity prices and uncertainty in demand can affect the business of the Company.
• Any disruption in the operations and production caused due to macroeconomic or political events can affect the business.

Recent News

On 2 February 2021, Alba Mineral Resources provided an update on work activities at Clogau-St David's Gold Mine. In the first phase of the drilling programme, the Company has identified a new vein system which extends 66 metres below the existing worked zone.

Financial Highlights – H1 FY2020 (31 May 2020) (released on 28 August 2020)

(Source: Interim Report, Company Website) 

• In the first half of the financial year 2020, the Company remained in the development stage and did not generate any revenue.
• Driven to lower administrative expenses incurred during the period, the Company reported a decline in a loss in the H1 of the financial year 2020.
• The cash balance as on 31 May 2020 declined to £105,470 (30 November 2019: £211,333).

One Year Share Price Chart

(Source: Refinitiv, chart created by Kalkine Group)

Conclusion

The Company has shown a slight improvement in financial performance in the first half of the financial year 2020. The Company is in the development stage and hence rely on grants and cash balances to carry on all the business activities. The operations are financed by the sale of equity securities by private placements. The Bottom-line performance has improved, while profitability remained in the negative zone. Alba Mineral Resources faced significant challenges due to Coronavirus pandemic while continuing to make progress across the portfolio of project. The stock made a 52-week low and high of GBX 0.04 and GBX 0.5796, respectively.

Based on the headwinds faced by the Company, we have given an “Avoid” recommendation on Alba Mineral Resources Plc at the current price of GBX 0.35 (as on 3 February 2021, before the market close at 9:00 AM GMT), with support from few catalysts needs to be evaluated at a later stage such as increased investment and progress made across asset portfolio.

Moonpig Group Plc

Moonpig Group Plc (LON: MOON) is an online listed retail Company. The Company offers personalised gifts, greeting cards and gifts to customers in the US, Australia and the UK. The Company also operates in the Netherlands under Greetz brand name.

Investment Highlights - Moonpig Group Plc -  Avoid at GBX 423.95

On 2 February 2021, Moonpig Group announced offer price of 350p per share for initial public offering and will generate £1.2 billion of initial market capitalisation. The flotation includes 134.6 million existing shares with £491.2 million of total offer size and 5.7 million new shares to raise £20 million gross proceeds. The investors might have lower confidence towards Moonpig Group’s shares as it has not released any financial data, business objectives and outlook.

Key Risks

• The weak consumer confidence and declining disposable income can impact consumer spending, and thus, the profitability.
• The Company is also facing an intense competition which can put pressure over margins and expected growth might not be achieved.

Announcement of Offer Price (2 February 2021)

• The Company has set offer price at 350 pence/share and expects total market capitalisation of around £1.2 billion.
• The offer includes approximately 5.7 million new Shares and approximately 134.6 million existing Shares, which represents 41% of issued share capital on admission.
• The Principal Selling Shareholders has made the availability of around 14 million additional shares, in accordance with the over-allotment option.
• The Company’s issued share capital will be 342.1 million Shares, after admission to LSE (London Stock Exchange).

One Day Share Price Chart

(Source: Refinitiv, chart created by Kalkine Group)

Conclusion

The Company listed its stock on LSE (London Stock Exchange) on 2 February 2021 and is eyeing FTSE-250 index of the main market. The Company sets the offer price at 350 pence and expects to have a market capitalisation of around £1.2 billion, based on the offer price. At present, the Company has not presented any information related to financial performance and the liquidity position available. MOON will face stiff competition from well-established players in the card business.

Based on the headwinds faced by the Company, we have given an “Avoid” recommendation on Moonpig Group Plc at the current price of GBX 423.95 (as on 3 February 2021, before the market close at 8:15 AM GMT), with support from few catalysts needs to be evaluated at a later stage such as presentation of information related to financial and operational data. Also, we need to see how the business operations expand during medium to long term period, considering current market dynamics.

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