4 NZX-Listed Stocks with Over 20% YTD Return - FPH, ATM, AFT, CNU

  • Jun 03, 2020 NZST
  • Team Kalkine
4 NZX-Listed Stocks with Over 20% YTD Return - FPH, ATM, AFT, CNU

Summary

  • New Zealand is expected to soon move to Alert Level 1, ahead of schedule
  • Entire NZ stock exchange, except consumer staples index, closed in green zone, majorly highlighting optimism around the country’s successful containment of the pandemic
  • Amid COVID-19 when number of companies have been significantly impacted, businesses like FPH, ATM, AFT and CNU have delivered decent returns
  • While Fisher & Paykel experienced surge in demand for respiratory humidifiers and consumables, AFT Pharmaceuticals witnessed strong increase in product sales
  • The a2 Milk Company also registered strong revenue growth across all key regions, primarily in infant nutrition products

COVID-19 has severely hit the world economy, which is expected to shrink by more than 3% in 2020, according to the International Monetary Fund (IMF) estimates. As some countries have started lifting restrictions and are gradually reopening their economies, several businesses are expected to pick up the steam.  

New Zealand is likely to remove most of the remaining restrictions around mass gatherings and physical distancing in the upcoming days, highlighting that the sovereign island country is on the verge of eliminating coronavirus. However, strict border controls would remain in place. Over the past 11 days, New Zealand has not observed any new coronavirus cases. 

S&P/NZX 50 Index closed higher by 1.39% to 11,034.17 on 2 June 2020. The index delivered a negative return of 6.16% on a year-to-date basis and a positive return of 11.06% on a quarter-to-date basis, as on 29 May 2020.

Except for S&P/NZX All Consumer Staples, all the indices on NZX closed the day’s trade in the green zone on 2 June 2020.

Also Read: New Zealand Markets Ended in Green: What You Need to Know

In this backdrop, let us take a glance at few NZX-listed companies that delivered a decent YTD return, covering their market updates.  

Fisher & Paykel Healthcare Corporation Limited (NZX: FPH)

Fisher & Paykel Healthcare Corporation Limited (NZX: FPH) is a provider of medical devices and systems, designed for respiratory and acute care, in addition to obstructive sleep apnoea treatment.

The stock of FPH has delivered a YTD return of ~35.05% and closed the day’s trade at NZ$30.250 on 2 June 2020, up by 0.91% from the previous close. The Company has a market cap of ~ NZ$17.38 billion.

Trading Update: FY2020 Operating Revenue Expected at ~ NZ$1.24 Billion

During mid-March 2020, the Company announced updated guidance for revenue and earnings for FY2020 ended 31 March 2020.

The Company, in its earlier full-year guidance update, had expected operating revenue of around NZ$1.2 billion based on an NZ:US exchange rate of 64 cents. However, assuming an NZ:US exchange rate of 61 cents and an NZ:EU exchange rate of ~ 55 cents, the Company revised its operating revenue guidance to ~ NZ$1.24 billion and NPAT guidance between ~ NZ$275 million and NZ$280 million for FY2020.

Its respiratory humidifiers and consumables are being used for the treatment of patients diagnosed with COVID-19. The Company also noted an increase in demand for its products on a global level, consequently, ramped up its manufacturing output. Besides, it has benefitted from higher sales in its homecare product group.

The Company is set to update the market with its performance for 12-month period ended 31 March 2020 on 29 June 2020.

The a2 Milk Company Limited (NZX: ATM)

The a2 Milk Company Limited (NZX: ATM), an innovator in the dairy industry, offers a range of pure dairy products that are fresh, delicious, and A1 protein-free.

ATM stock closed the day’s trade at NZ$18.700 on 2 June 2020, down by 1.58%, and has delivered a YTD return of ~ 26.5%. The Company has a market cap of NZ$13.83 billion.

Trading Update: Strong Revenue Growth Noted in All Key Regions

Since the last update provided by the Company related to trading performance and FY2020 outlook in February 2020, ATM experienced strong revenue growth across all key regions, according to a Company update in late-April 2020. The growth was observed particularly in infant nutrition products sold in Australia and China.

Revenue for the 3-month period ended 31 March 2020 was more than anticipations, reflecting the change in purchase behaviour amongst customers due to the COVID-19 situation. Additionally, revenue of the Company’s segment in China transacting in US dollars, experienced positive impacts with a substantial depreciation in the NZ dollar to the US dollar during the 3-month period to March.

FY2020 Outlook: Ongoing Revenue Growth Expected 

  • Revenue is expected in the range of NZ$1,700 million to NZ$1,750 million, driven by ongoing revenue growth across key regions aided by increased levels of marketing investment in China and the US.
  • Full-year EBITDA margin is anticipated between 31% and 32%.

AFT Pharmaceuticals Limited (NZX: AFT)

Multinational company, AFT Pharmaceuticals Limited (NZX: AFT) is engaged in the development, marketing and distribution of a range of pharmaceutical goods across varied therapeutic segments.

The stock of AFT has delivered a YTD return of ~ 21.43% and settled at NZ$4.580, down by 1.51% from the previous close. AFT Pharmaceuticals has a market cap of NZ$460.29 million.

FY2020 Results: Revenue Up by 24%

On 20 May 2020, the Company released its FY2020 results for the year ended 31 March 2020.

  • Driven by strong growth in all markets and all sales channels, revenue went up by 24% to NZ$105.6 million.
  • Operating profit, along with a $9.8 million non-recurring gain, grew to NZ$21.1 million.
  • NPAT increased to NZ$12.7 million, compared with an NZ$2.4 million loss.
  • Operating cash flow soared from NZ$1.1 million in FY2019 to NZ$14.9 million.

In FY2021, the Company expects operating profit to grow to NZ$14 million - NZ$18 million.

AFT during COVID-19 and post COVID-19

In the wake of the coronavirus pandemic, the Company reported a strong increase in sales of a number of products such as analgesics, cold & flu medications, vitamins and hospital antibiotics.

The Company also started to roll out new products like Crystawash hand sanitiser, targeted towards deriving benefits from changing consumer behaviour amid COVID-19.

Chorus Limited (NZX: CNU)

Chorus Limited (NZX: CNU) is the largest telecommunications infrastructure company in New Zealand, looking after the country’s fixed line telecom network for present and future generations.

The stock of CNU has delivered a YTD return of ~ 22.98% and closed the day’s trade on 2 June 2020 at NZ$7.670, moving upward by 0.92% from its previous close.  The Company has a market cap of ~ NZ$3.4 billion.

Trading Update: Strong Growth in 1 Gbps Connections during Q3

In March 2020, monthly average data usage increased by 18% to 346GB from 293GB in December, according to a Company update in early April 2020. Broadband connections grew 4,000 in Chorus UFB and rural regions in Q3 FY20. However, overall broadband connections decreased by 4,000 to 1,202,000 at the end of the quarter.

In Q3 FY2020, fibre demand remained strong, and 32,000 connections were added despite the COVID-19 crisis. Robust growth was witnessed in 1 Gbps connections to 105,000. There was an increase in the UFB uptake from 56% to 58%, while fibre extended past 13k additional clients.

Total fixed line connections dropped by 13,000 to 1,419,000.

Must Read: New Zealand Stock Market Climbs Over Wall of Worry   

 

 


Disclaimer
The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

   
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