The St. Joe Company

JOE Details

The St. Joe Company (NYSE: JOE) is a real estate development, asset management, and operating company in Northwest Florida. To fulfill market demand, JOE strives to increase the value of its owned real estate assets by constructing residential, commercial, and hospitality buildings. JOE operates in the residential, hospitality, and commercial real estate business segments. Around 86% of its real estate is located in Bay, Gulf, and Walton Counties in Florida and approximately 90% of its property holdings are within 15 miles of the US Gulf of Mexico. As of September 09, 2021, its market capitalization stood at USD 2.63 billion.

Development of Newly Planned Community: JOE announced that it had commenced developing a new 554-acre master-planned community in Mexico Beach, Florida, on August 05, 2021. The first phase of the community, which will include 42 townhouses, has begun construction. The proposed community is approximately 12 miles from Tyndall Air Force Base's main gate.

Land Holdings and Projects (Source: Annual Shareholders' Meeting Presentation, May 18, 2021)

Achieving New Milestones: With new buildings under construction and significant leasing activity on future projects, JOE announced on August 03, 2021, that its diverse portfolio of leasable space is approaching 1 million sq. ft. This portfolio contains various assets in Bay and Walton Counties (Northwest Florida) that appeal to rising tourism and permanent residents.

H1FY21 Results: The company reported total revenue of USD 113.55 million during H1FY21 (ending June 30, 2021), 2.08x of H1FY20 revenue of USD 54.66 million, owing to a significant increase in real estate and hospitality revenues. As a result, it witnessed a sharp increase in net income to USD 26.98 million during H1FY21 vs. USD 17.88 million during H1FY20. Concurrent with the earnings release, JOE announced a cash dividend of USD 0.08 per share, payable on September 10, 2021, to shareholders of record on August 13, 2021.

Key Risks: The company's operations are concentrated in Northwest Florida. Therefore, any significant downturn in economic conditions in this area, such as supply and demand discrepancies, increase in unemployment rates, zonal and other regulatory restrictions that could impact JOE's clients/borrowers' liquidity, could significantly impact the company's financials and cash flows.

JOE Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: JOE's share price fell 13.08% in the past six months and is currently trading at the higher-band of the 52-week range of USD 19.75 to USD 57.55. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 42.87. Considering the company's growth prospects, market dominance in Northwest Florida, solid profit margins, and associated risks, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 43.46, down 2.86% as of September 09, 2021.

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Gravity Co., Ltd.

GRVY Details

Gravity Co., Ltd. (NASDAQ: GRVY) is a Korea-based developer and publisher of online and mobile games. Its principal product is Ragnarok Online, a popular online game that is currently commercialized in 91 markets and countries, including Japan and Taiwan. As of September 09, 2021, the company has 6.95 million American Depository Shares (ADS) listed and outstanding, with each ADS representing one common share.

Geographical Expansion: On September 01, 2021, GRVY launched Ragnarok X: Next Generation, a Massively Multiplayer Online Role-Playing Game (MMORPG) in Vietnam. The response to the closed beta test, which began on July 15, 2021, was overwhelmingly enthusiastic, with over 300,000 accounts pre-registered. The company plans to launch the game in Korea in H1FY22.

The news follows the launch of Ragnarok The Lost Memories in Thailand by Gravity Game Tech., Ltd., a wholly-owned subsidiary of GRVY, on August 26, 2021. This Cinematic Newtro RPG mobile game was developed by GRVY's South Korean subsidiary Gravity NeoCyon Inc. and has achieved more than 500,000 sign-ups since the commencement of the pre-registration period on July 20, 2021.

Mobile Launch of Ragnarok Origin: On August 12, 2021, GRVY announced the mobile release of Fantasy MMORPG Ragnarok Origin. Pre-registration began on The App Store and Google Play Store on August 10, 2021.

Q2FY21 Results: The company reported a YoY decline of 5.48% in total revenues to KRW 83.61 billion in Q2FY21 (ended June 30, 2021) compared to KRW 88.46 billion in Q2FY20. The Mobile Games segment, which accounted for 65.95% of the total revenue in Q2FY21, reported YoY growth of 1.64%, whereas the Online Games segment declined 22.58% YoY. Net income for Q2FY21 increased to KRW 14.77 billion from KRW 13.10 billion in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents (including short-term investments) of KRW 202.63 billion and no outstanding debt.

Operation Results Trend (Source: Q2FY21 IR Presentation, August 2021)

Key Risks: In FY20, Ragnarok Online and games based on Ragnarok Online accounted for 20.8% of GRVY's total revenue. Therefore, any failure in continuously evolving, updating, and enhancing the Ragnarok game universe could result in a declining customer base and adversely impact its financials. In addition, the online and mobile games developed by third parties contributed 74.5% to the company's FY20 revenue, with one critical third-party developer, Dream Square, accounting for 68.9% of such revenue. Therefore, any discord with such key third parties could hurt its results of operations.

Outlook:

Outlook – 2021 Major Upcoming Launches (Source: Q2FY21 IR Presentation, August 2021)

GRVY Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: GRVY's stock price decreased 26.65% in the past three months and is currently trading in the lower band of its 52-week range of USD 81.00 to USD 239.90. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 55.97. Considering the significant correction in the stock price, strong balance sheet, geographical expansion, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 103.18, up 1.52% as of September 09, 2021, 12:03 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Asensus Surgical, Inc.

ASXC Details

Asensus Surgical, Inc. (NYSE: ASXC) is a medical device company engaged in digitizing the interface between the surgeon and the patient to usher in a new era of Performance-Guided Surgery by unlocking clinical knowledge to enable consistently higher outcomes and a new surgical norm. ASXC is focused on the market development and commercialization of the Senhance Surgical System, a machine vision system for use in robotic surgery powered by an intelligent surgical unit that enables augmented intelligence in surgery. 

Regulatory Clearances: On May 19, 2021, the US Food and Drug Administration (FDA) granted the 510(k) clearance to ASXC for expanding machine vision capabilities on its previously approved Intelligent Surgical Unit (ISU). The ISU is used in conjunction with the Senhance Surgical System, which allows for Digital Laparoscopy.

Subsequently, on July 28, 2021, the FDA also granted clearance for 5 mm diameter articulating tools to be added to the Senhance Surgical System's technological platform. These tools provide easier access to difficult-to-reach body parts and have already been CE marked for use in the European Union.

Q2FY21 Results: The company reported a YoY surge of 68.24% in total revenues to USD 1.10 million in Q2FY21 (ended June 30, 2021) compared to USD 0.66 million in Q2FY20. The Product segment, which accounted for 63.16% of the total revenue in Q2FY21, grew 1.21x YoY, whereas the Service segment improved 19.41% YoY. Net loss for the company reduced to USD 13.17 million in Q2FY21 vs. USD 14.14 million in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents of USD 157.08 million and no outstanding debt.

Key Risks: ASXC currently has a single product offering, i.e., Senhance Systems. Therefore, any failure in the commercialization of Senhance Systems could adversely impact its financials. In addition, ASXC is dependent on third-party manufacturers to produce the Senhance Surgical Systems. Also, some of its raw materials and components are sourced from a single vendor. Hence, this could hamper its ability to create an efficient supply chain and harm its business.

Outlook: As of Q2FY21, ASXC anticipates installing 10-12 new Senhance Surgical Systems in FY21. In addition, in H2FY21, it expects to publish several clinical papers in well-known publications showcasing the health and economic evidence comparing Senhance, robotics, and laparoscopy in General Surgery and Gynecology in a range of procedures, specialties, and facilities.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

ASXC Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: ASXC's stock price decreased 36.27% in the past three months and is currently trading in the lower band of its 52-week range of USD 0.32 to USD 6.95. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 41.28. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 2.49. Considering the significant correction in the stock price, strong balance sheet, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 2.07, up 2.23% as of September 09, 2021, 03:19 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.