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15 March 2019 07:47 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average25,71025,7037.000.03-0.67
S&P 5002,8082,811-2.00-0.091.18
NASDAQ7,6317,643-12.00-0.162.12
FTSE 100 Index7,1857,15926.000.37-0.71
DAX 3011,58711,57215.000.132.55
CAC 40 Index5,3505,30643.000.823.81
Nikkei 225 (Japan)21,28721,290-3.00-0.021.85
HKSE28,85128,80744.000.153.41
SSE Composite Index2,9913,027-36.00-1.2011.49
S&P/TSX Composite Index16,08816,150-62.00-0.391.57
NZ 509,4489,43513.000.142.19
US Volatility (Vix)14
Overseas Market Report

US sharemarkets were mixed on Thursday. There remains uncertainty about if and when a trade deal can be concluded between the US and China. US President Trump said that the trade negotiations were going well. The housing index fell 0.5% on data showing a drop in new home sales in January. But financials and technology were supported. Shares in Apple rose 1.1%. The Dow Jones index rose by 7 points or less than 0.1%. The S&P500 index fell by 0.1%. And the Nasdaq index fell by 12.5 points or 0.2%.

Global oil prices were mixed on Thursday. In its monthly report OPEC stressed the need to extend its production cut program past June while lowering its forecast for crude demand and predicting strong growth in non-OPEC supply. Brent crude fell by US32 cents or 0.5% to US$67.23 a barrel and the US Nymex price rose by US35 cents or 0.6% to US$58.61 a barrel.

Base metal prices fell by up to 2.4% with nickel down the most. But tin was flat and aluminium lost just 0.2%.

The gold futures price fell by US$14.20 an ounce or 1.1% to $1,295.10 an ounce. The spot gold price was near US$1,296 an ounce in late US trade. Iron ore rose by US$3.00 or 3.6% to US$87.10 a tonne.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent67.2367.55-0.32-0.474.12
Oil - West Texas crude58.5758.61-0.04-0.075.36
Gold Spot $/OZ1,296.001,296.000.100.01-1.91
Silver Spot $/OZ15.2015.200.00-0.01-3.80
Iron Ore81.3080.800.500.61-4.94
Thermal Coal Newcastle94.6094.500.100.11-0.37
Coking Coal FOB ECP AUS0.000.000.000.000.00
Aluminium ($US/t)1,8771,881-4.00-0.203.10
Copper Mar-18 ($US/lb)2.892.93-4.50-1.534.13
Lead ($US/t)2,0972,112-15.00-0.713.12
Nickel ($US/t)12,79913,118-319.00-2.435.60
Zinc ($US/t)2,8802,888-8.00-0.2811.26
Tin ($US/t)21,23221,2275.000.021.35
Uranium ($US/lb)28.0028.000.00-0.54-4.35
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords6,2696,2673.000.041.96
S&P/ASX 2006,1806,1800.000.001.87
ASX 24 Futures6,183
Australian Market Report

Thursday 14 March - close. The ASX200 has closed higher for the first time in five days, driven by the energy and tech sectors. The benchmark S&P/ASX200 index closed up 18.4 points, or 0.3 per cent, to 6179.6 points at 1615 AEDT on Thursday, while the broader All Ordinaries was down 20.8 points, or 0.33 per cent, at 6266.8.

Ashanti Headlines

AuMake International Ltd (AU8.ASX, 21cps, m.cap A$57m with 271.5m SOI, Cash $8.0m, Consumer Discretionary)

  • This morning AuMakeInternational (ASX.AU8) announced an International and Interstate storeexpansion. Highlights of the announcement can be seen below;

  • Four new cross-border retailstore locations;

    • Sydney (2) – New stores in Campsie (daigou) and Haymarket (Chinese tourist)

    • Brisbane (1) – Acquisition of existing store and management
      • $150,000 cash and $300,000 fully paid ordinary shares (30-day vwap) with escrow of 12 months from date of issue  
      • Acquired at replacement value
      • Springboard to open further stores in Brisbane
    • Auckland (1) – Acquisition of existing store and management
      • NZ$200,000 in AuMake fully paid ordinary shares (30-day vwap) with escrow of 12 months from date of issue
      • Acquired below replacement value
      • Springboard to open further stores in Auckland and New Zealand
  • Financial commentary
    • With these acquisitions and the opening of own stores, AuMake’s sales forecast has increased by an estimated 30-40% over the next 12 months
    • Further new store openings planned in near future
    • Fixed costs are expected to remain stable with minor increases in direct costs (rent and labour)
    • New stores anticipated to materially increase the profitability of the overall business, in line with the performance of the Company’s existing 13 stores
    • Significant financial improvement expected with minimal investment ($580,000) required to refurbish and rebrand the four new stores
    • Opportunity to capture online traffic and repeat customers not currently serviced in Brisbane and Auckland stores

Our Take

This seems like a logical next step in the growth of the AuMake business with the acquisition of two established stores outside of Sydney (Brisbane and Auckland) a key milestone. Encouragingly, sales are expected to increase by 30 to 40% with these acquisitions. On our numbers that puts the company at a run rate of  A$60-70M in Sales. At a margin of +20% (+A$12M in Gross Profit) the company will now be approaching profitability.

 

As flagged in the outlook of this announcement, the company continues to looks at further acquisitions in daigou and tourism sector. 

 

See attached is a copy of the announcement here

 

Please contact the Ashanti Desk if you would like to discuss the AuMake story in more detail- Steve Martin+61 8 6243 1884 | Duncan Relf +61 8 61692669


Have a question? admin@ashanticapital.com.au

ERA Communications