ASX-listed Stocks Under Spotlight: IEL, PPH, ISX, MSB

Summary

• Stock markets on a roller coaster ride, with worsening US-China relations and reopening of several economies
• Pushpay Holdings is experiencing surge in demand for its services, backed by shift in digital for customers using mobile-first technology solutions to communicate with their congregations.
• iSignthis is further boosting Digital Ledger Technology with growing relationship with NSX
• Mesoblast’s lead candidate remestemcel-l delivered respiratory and functional outcomes in patients with inflammatory lung disease
• COVID-19 led global travel and gathering restrictions resulted in a significant drop in testing and student placement volumes for IDP Education

Last week, Australian stock market has been on a roller coaster ride, as the benchmark index S&P/ASX 200 kept fluctuating between the red and green zone while ending the week on Friday, 29 May 2020, in the red zone at 5755.7, down by 1.63% from its previous close.

Growing tensions between the US and China seem dominating the market sentiments. Late-last week, US President Trump addressed tensions with China, highlighting plans to revoke the preferential status given to Hong Kong, which in response urged US to stop interfering in its internal matters.

It would be interesting to gauge how the market performs this week, as on the first of June 2020 (AEST 11:44 AM), S&P/ASX 200 was advancing by 0.43% or 25 points to 5,780.7.

Let's discuss few stocks under the spotlight on ASX amid the uncertain market.

IDP Education Limited (ASX:IEL)

Founded in the late 1960s, IDP is a global enterprise that operates across 58 countries. In FY2019, the Company celebrated 50 years of successful offering of international education services.

In April, IDP gave a trading update, highlighting record IELTS test and student placement volumes to Feb-YTD, owing to which revenue went up by 22% to $480 million and EBIT grew by 32% to $96 million. For YTD Feb-2020, the Company reported qualified lead increase of 47% and applied volume boost of 42% when compared with the same period a year ago.

However, post the Feb period, there has been a significant drop in testing and student placement volumes, as COVID-19 led to global travel and gathering restrictions.

In April and May, the Company completed an institutional placement worth $225 million and a share purchase plan, respectively, targeted towards enhancing balance sheet strength and financial flexibility. The proceeds are planned to support the business during the current macroeconomic uncertainty by materially increasing liquidity.

Via these capital and other operational measures, IDP intends to ensure that the business is well placed to navigate through the current period of uncertainty. Meanwhile, the Company remains well positioned to capture market opportunity and continue to deliver value for its customers and shareholders.

IEL was trading at $16.870 on 1 June 2020 (AEST 01:05 PM), down by 0.94% from its previous close, with the Company boasting a market cap of $4.74 billion.

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Pushpay Holdings Limited (ASX:PPH)

The Company provides a donor management system comprising finance tools, donor tools and a custom community app to non-profit organisations, faith sector and education providers.

Pushpay Holdings has operated a share incentive scheme known as the Pushpay Share Incentive Scheme (Scheme) for the last few years, under which, selected few can acquire an interest in fully paid ordinary shares also named as incentive shares.

In its 2020 annual results presentation, the Company highlighted a robust growth of 32% in total revenue to US$129.8 million. NPAT for the period stood at US$16.0 million, down from US$18.8 million, a decrease of 15%. The operating cash flow was noted at US$23.5 million, up from negative US$2.8 million, an increase of 953%.

As per the Company's guidance for the year ending 31 March 2021, EBITDAF is expected between US$48.0 million and US$52.0 million. Owing to COVID-19, there has been shift to digital as services move online, with the Company experiencing surge in demand for its services.

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PPH was trading at $6.960 on 1 June 2020 (AEST 01:18 PM), with a market cap of $1.88 billion.

iSignthis Limited (ASX: ISX)

ISX is based in Australia, operating as a RegTech player, and providing an end-to-end on-boarding service for merchants, with a unified payment and identity service via its Paydentity™ trusted back office solution and ISXPay® solution, a principal member of various merchants.

During late-May 2020, iSignthis announced to have increased stake in NSX Limited (ASX:NSX) via a placement, with its subsidiary Probanx Holdings Ltd participating in the latter’s capital raise. The placement amount applied for stood at $1.5 million at $0.091 per share for more than 16.48 million shares.

Its relationship with NSX provides a unique opportunity to further boost its Digital Ledger Technology and integrate the technology with a delivery versus payment platform for an end-to-end solution.

With this relationship, the Company is expecting several opportunities.

Do Read: What investors need to know about the suspended groups ANO and ISX

Mesoblast Limited (ASX:MSB)

MSB, a global leader in allogeneic cellular medicines for inflammatory diseases, on 1 June 2020, announced improved respiratory and functional outcomes in patients with inflammatory lung disease with its lead mesenchymal stem cell (MSC) product candidate remestemcel-L.

The analysis from a randomized, placebo-controlled 60-patient Phase 2 trial in patients with COPD highlighted that the drug significantly improved outcomes in patients with elevated levels of the inflammatory biomarker C-reactive protein (CRP) when given in 4 monthly intravenous doses of 100 million cells.

The Company recently reported a robust financial position and substantial operational progress in nine months ended 31 March 2020, reporting cash on hand of US$60.1 million at end-March. In May 2020, proforma cash on hand stood at around US$150 million after adjusting for a US$90 million capital raise.

• Revenue up 113% year-on-year to US$31.5 million;
• 34% reduction in loss after tax to US$45.3 million compared with US$69.1 million);
• Via existing financing facilities and strategic partnerships, US$67.5 million is expected over the next 12 months.

Dr Silviu Itescu, Mesoblast CEO, stated that Q3 underscored the value of the Company's lead drug candidate and experiences of its use in patients with SCRS (severe cytokine release syndromes).

Right now, biologics licence application for marketing approval of this medicine is under priority review by the US Food and Drug Administration (FDA) and the Company expects to provide the medicine for children with steroid-refractory aGvHD (acute graft versus host disease) in 2020.

Moreover, Dr Itescu stated the Company is proud to be developing the lead product remestemcel-L as a potential treatment for COVID-19. A phase 3 controlled trial is underway in the US to confirm if the product can contribute meaningfully during this urgent medical need for patients with moderate to severe acute respiratory distress syndrome (ARDS).

Must Read: COVID-19: Treatment or vaccines? What seems more likely, and what could be more beneficial?

On 1 June 2020 (AEST 01:40 PM), MSB was trading at $3.930, down by 1.75%, with a market cap of $2.32 billion.

(Note: All currencies in Australian Dollar unless or otherwise stated)