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30 April 2019 06:51 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average26,55426,54311.000.042.41
S&P 5002,9432,9403.000.113.83
NASDAQ8,1628,14615.000.195.60
FTSE 100 Index7,4417,42812.000.172.22
DAX 3012,328013.000.106.96
CAC 40 Index5,5815,56912.000.214.31
Nikkei 225 (Japan)22,25922,308-49.00-0.224.97
HKSE29,89329,605288.000.972.90
SSE Composite Index3,0623,086-24.00-0.77-0.91
S&P/TSX Composite Index16,60016,613-13.00-0.083.09
NZ 5010,02510,01312.000.121.83
US Volatility (Vix)13
Overseas Market Report

US sharemarkets rose modestly on Monday. Investors were encouraged by data showing a strong lift in spending and tame inflation. Investors were also hopeful that this week's trade talks with China would produce an agreement. In terms of earnings, analysts now expect that profits of S&P 500 companies fell 0.2% in the quarter compared with initial forecasts of a 2% decline. The Dow Jones rose by 11 points or less than 0.1%. The S&P500 index lifted by 0.1% to record highs. And the Nasdaq index gained 15.5points or 0.2% to record highs.

Global oil prices were mixed on Monday. No representatives from OPEC elected to comment on the demands by US President Trump to raise oil production in order to lower the global price of crude. Sanctions on Iran and Venezuela and fighting in Libya are constraining world oil supplies. The Brent crude fell by US11 cents or 0.20% to US$72.04 a barrel but US Nymex rose by US20 cents or 0.3% to US$63.50 a barrel.

Base metal prices were mixed. Tin, aluminium and nickel fell by up to 1.4%. But other metals rose up to 1.1%, led by zinc.

The gold futures price fell by US$7.20 an ounce or 0.6% to $1,281.20 an ounce. The spot gold price was near US$1,280 an ounce in late US trade. Iron ore rose by US55 cents or 0.6% to US$93.35 a tonne.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent72.0472.15-0.11-0.155.34
Oil - West Texas crude63.5863.500.080.135.72
Gold Spot $/OZ1,280.001,280.000.600.04-0.92
Silver Spot $/OZ14.9014.900.000.03-1.32
Iron Ore87.2087.40-0.30-0.297.22
Thermal Coal Newcastle86.9087.00-0.10-0.11-6.31
APAC Hard Coking Coal FOB202.00200.002.001.002.02
Aluminium ($US/t)1,8141,823-9.00-0.51-4.19
Copper Mar-18 ($US/lb)2.892.90-0.40-0.16-1.55
Lead ($US/t)1,9581,93920.001.01-2.15
Nickel ($US/t)12,33312,354-21.00-0.17-4.37
Zinc ($US/t)2,9202,88833.001.14-2.64
Tin ($US/t)19,74520,035-290.00-1.45-7.94
Uranium ($US/lb)25.0025.000.000.401.40
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords6,4506,473-24.00-0.363.00
S&P/ASX 2006,3596,386-26.00-0.412.89
ASX 24 Futures6,341
Australian Market Report

Monday 29 April - close. The Australian share market has had its worst day in three weeks with the financial and energy sectors weighing heavily as analysts await economic clues from the US and China. The benchmark S&P/ASX200 index finished 26.1 points, or 0.41 per cent, lower to 6,359.5 points at 1615 AEST on Monday, while the broader All Ordinaries slipped 23.6 points, or 0.36 per cent, to 6,449.6 amid thin volumes.

Ashanti Headlines

AuMake International Ltd (AU8.ASX, 15cps, m.cap A$40.7m with 332.9m SOI, Cash c$12.5m post placement (Consumer Discretionary)

March Quarterly

Record sales post Chinese New Year

  • $4.1 million for the month of March is the second largest in the company’s history; reinforcing there has been no impact from 1 January 2019 e-commerce legislation

Strong YoY March 19 Quarter

  • Sales – up 93% to $9.9m (March 2018 quarter: $5.13m)
  • Gross profit – up 104% to $1.68m (March 2018 quarter: $0.82)
  • Gross margin – 17% (March 2018 quarter: 16.05%)
  • Owned brand sales – up 107% to $564,000 (March 2018 quarter: $273,000)
  • Operating cash outflow $1.32m (down by 57% from $3.05m in March 2018 quarter)
    • Material investment during quarter in online infrastructure and packing facility to cater for future online sales growth 

Its important to note that the March Qtr is seasonally weak due to Chinese New Year holidays - Very positive to see a strong rebound in March post this period.

 

FY20 Strategy 

AuMake’s acquisition of Broadway has created the largest China focussed offline and online retail platform in Australia and New Zealand (“ANZ”) to sell high margin new, owned brand and existing popular ANZ brands to Chinese customers

The acquisition lays the foundation for AuMake’s future plans

  • Every Chinese tourist holidaying on Australia’s east coast and in New Zealand can now visit an AuMake or Broadway store at least once on their trip
    • Leveraging Broadway’s relationships with over 100 travel agencies in China
  • Targeting the transformation of AuMake’s online sales to comprise 50% of total sales and developing ANZ’s largest online database of daigou and Chinese tourists
  • Creation of an offline & online retail platform to develop and introduce new brands to Chinese consumers
    • Aspirational FY20 owned brand product revenue target of $15m-$20m (FY19: $4m) 
  • Partnering with JD.com, one of the world’s largest e-commerce companies, to create an owned distribution channel into China

Aspirational FY20 group revenue target in excess of $100m and materially EBITDA positive

It’s positive to see a strategy push towards the online side of the business – leveraging off the bricks and mortar foundations to a model transition likened to that of Dominoes Pizza, where online sales became the focus and new normal.

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

*******Broadway Site Visit

AuMake will be hosting a site visit to Broadway’s Sydney Store (22-36 Mountain St, Ultimo NSW) next Tues the 7th of May. Please contact your adviser if you would like to attend.


Have a question? admin@ashanticapital.com.au

ERA Communications