The PPK Group Limited (ASX: PPK) share price has been soaring lately despite unresolved issues with its spin-off of Li-S Energy.

PPK originally planned to have lithium-sulphur chemistry battery creator, Li-S Energy, off its hands and onto the ASX yesterday. However, it has been faced with a number of delays.

Despite the drama, PPK’s shares have gained 52.09% since this time last month, including today’s 6.65% increase. Right now, shares in the investment group are trading for $20.06 apiece.

Let’s take a closer look at Li-S Energy’s initial public offering (IPO).

Li-S Energy struggles to list

The PPK share price is outperforming despite setbacks facing Li-S Energy’s listing.

PPK, along with Deakin University, founded Li-S Energy in 2019. Now, PPK is listing Li-S Energy on the ASX, under the ticker LIS.

When the company announced the spin-off, the PPK share price gained 1%.

Under Li-S Energy’s prospectus, investors were offered shares in the company for 85 cents apiece. That gives Li-S Energy an expected market capitalisation of around $544 million.

Originally, PPK expected Li-S Energy’s IPO to occur in late August. Specifically, yesterday.

However, despite excess demand for Li-S Energy’s shares, there’s still no word as to when we’ll see it debut. PPK updated the market on the IPO last week, saying it’s waiting on the ASX to provide its approval.

The investment company stated there are still a number of steps to complete before Li-S Energy can go public. It said:

It is expected that these steps will be dealt with and conditional listing approval provided shortly. At that time a revised timetable will be provided and a further announcement regarding such will be made.

So, it seems we should stop holding our breath for Li-S Energy’s IPO for a moment. Though, the suspense seems to be good for the PPK share price.

PPK share price snapshot

The PPK share price has gained 234% year to date. It is also 370% higher than it was this time last year.

The post PPK (ASX:PPK) share price up 52% in a month despite Li-S Energy IPO hurdles appeared first on The Motley Fool Australia.

More reading

• Who’s starting the week off as the biggest mover on the ASX 300 today?
• PPK Group (ASX:PPK) share price tumbles despite distribution agreement

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vanguard Australian Shares Index ETF (ASX: VAS) has had a remarkable month of August so far (touch wood). This popular ASX exchange-traded fund (ETF) mirrors the S&P/ASX 300 Index (ASX: XKO). As such, if VAS has had a good month, it means the ASX 300 has too. 

But let’s get into some numbers.

So over the month of August to date, the ASX 300 Index has climbed from around 7,386.5 points at the start of the month to 7,538.8 points (where it stands at the time of writing. That’s a gain of roughly 2.1% for the month to date.

Meanwhile, the VAS ETF started August at $94.56 a unit. Today, it stands at $97.01 a unit at the time of writing. That’s also a gain of roughly 2.55%. So VAS has slightly outperformed the index that it tracks over August so far. This is probably down to some quirks with index allocations. But putting that aside, it’s been an indisputably good month for both the ASX 300 and the Vanguard Australian Shares Index ETF.

But why?

Well, like any ETF, VAS’s performance is directly correlated to the performance of the underlying shares it holds. And since VAS mirrors the ASX 300 Index, VAS will hold the same shares, in the same weightings.

As you might guess, it’s top 6 holdings, in order, consist of the big four banks, BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL). Rounding out the top 10 are Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG), Rio Tinto Limited (ASX: RIO) and Woolworths Group Ltd (ASX: WOW).

Which ASX 300 shares have fuelled VAS’s rise over August?

Well, we can rule out BHP and Rio for being responsible for VAS’ August gains. Both of these iron ore miners have had a terrible month. This is partly the result of lower iron ore pricing over August.

CBA has been pretty modest, giving investors a 0.56% gain over August. That’s very similar to the returns of Australia and New Zealand Banking Group Ltd (ASX: ANZ). But it’s the other ASX banks that have shone inside the VAS ETF. Westpac Banking Corp (ASX: WBC) has put on a very healthy 5% over August so far. National Australia Bank Ltd. (ASX: NAB) has done even better, gaining around 6.4%.

CSL, however, has been the star of the ASX 300 over the month about to pass. This health care giant has managed to gain around 9% since the end of July.

So the numbers are in. Investors can largely thank CSL, NAB and Westpac for the stellar month both the ASX 300 and the VAS ETF have enjoyed.

The post August has been a good month for the VAS (ASX:VAS) share price appeared first on The Motley Fool Australia.

More reading

• Which ASX shares are leading the way on the ASX 300 today?
• Which ASX companies are starting off the week as the top movers in the ASX 300 today?
• Which ASX shares are ending the week as the biggest movers today?
• Which ASX shares are leading the ASX 300 today?
• Which ASX 300 shares are the biggest winners and losers today?

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another small gain. At the time of writing, the benchmark index is up 0.3% to 7,526.3 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price is up 6.5% to $4.00. This gain appears to have been driven by a broker note out of Ord Minnett. In response to yesterday’s full year results, the broker has retained its buy rating and lifted its price target on the broadband provider’s shares to $4.32. Ord Minnett is expecting another strong year for the company in FY 2022.

Dubber Corp Ltd (ASX: DUB)

The Dubber share price has jumped 8.5% to $3.96. Investors have been buying the call recording technology company’s shares following the release of a strong full year result. In FY 2021, Dubber reported a 142% jump in annualised recurring revenue (ARR) to $39 million. This was underpinned by a 118% increase in subscribers to over 420,000.

Regis Healthcare Ltd (ASX: REG)

The Regis Healthcare share price has climbed 6.5% to $2.10. This aged care provider’s shares have stormed higher after it reported a return to profit in FY 2021. For the 12 months ended 30 June, Regis delivered a net profit after tax of $19.9 million. This compares to a loss of $0.7 million a year earlier.

Webjet Limited (ASX: WEB)

The Webjet share price is up 3% to $5.66. This follows the release of a positive trading update by the online travel agent ahead of its annual general meeting. That update reveals that the company’s key WebBeds business returned to profit during the month of July. Pleasingly, it has continued to be profitable in August and is expected to remain this way moving forward.

The post Why Aussie Broadband, Dubber, Regis Healthcare, & Webjet are storming higher appeared first on The Motley Fool Australia.

More reading

• The Aussie Broadband (ASX:ABB) share price is up 40% in a month. What’s next?
• ASX 200 midday update: Harvey Norman’s record profit, PointsBet posts large loss
• Regis Healthcare (ASX:REG) share price leaps on return to profit
• Which ASX shares are leading the way on the ASX 300 today?
• Dubber (ASX:DUB) share price charges higher after doubling revenue in FY21

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and Dubber Corporation. The Motley Fool Australia owns shares of and has recommended Dubber Corporation and Webjet Ltd. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Beamtree Holdings Ltd (ASX: BMT) share price is soaring today after the company announced its plan to acquire data analytics firm, Potential(x).

Potential(x) specialises in the health and human services market. According to Beamtree, the acquisition will set it up as the largest health and artificial intelligence-led support platform in Australia.

Right now, the Beamtree share price is 59,5 cents, 21.43% higher than its previous close.

Let’s take a closer look at today’s news from the health data insights and health coding solutions provider.

New acquisition

The Beamtree share price is gaining after the company announced it’s entered an agreement to acquire Potential(x).

The agreement will see Beamtree paying $4 million in cash and providing Potential(x)’s shareholders with 30 million Beamtree shares.

According to Beamtree’s release, Potential(x) has relationships with more than 300 health service providers, including more than 250 hospitals in Australia, New Zealand and the United Arab Emirates. It also has relationships with 35 disability providers that together represent around 40% of National Disability Insurance Scheme (NDIS) funding.

Potential(x) also has a 26-year partnership as the full-service operator for Australia and New Zealand’s The Health Roundtable Ltd. The cooperative includes a network of 200 hospitals across Australia, New Zealand, and the Abu Dhabi Health Services Authority.

Beamtree believes Potential(x)’s existing industry relationships will help it enter the market.

Potential(x) revenue for the 2021 financial year was $11 million. Its normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) came to $2.6 million.

Following the acquisition, Beamtree expects pro forma revenue of $19.9 million and operational EBITDA of $5.7 million.

Commentary from management

Beamtree’s CEO Tim Kelsey commented on the news sending the company’s share price through the roof today:

This agreement marks a major milestone in the growth opportunity for Beamtree – it doubles the size of the company by revenue and employee numbers and makes it one of the largest health analytics and decision support platforms in Australia. The new company already serves health services in more than 24 countries across four continents – we look forward to accelerating our global growth together with the Potential(x) team.

Potential(x)’s CEO Duane Attree added:

We will be bringing our brilliant teams together, who have complementary skills, expertise and a collective vision to put data and technology to best use for improving the quality and value of global health and human services.

Beamtree share price snapshot

The Beamtree share price has been performing well lately.

It’s currently about 40% higher than it was at the start of 2021. It has also gained around 120% since this time last year.

The post Beamtree (ASX: BMT) share price rockets 21% on acquisition news appeared first on The Motley Fool Australia.

More reading

• Tinybeans (ASX:TNY) share price rises on record revenue of US$8 million
• August hasn’t been a great month for the Rio Tinto (ASX:RIO) share price
• Why is everyone talking about Affirm stock?
• August hasn’t been a great month for the Beach Energy (ASX:BPT) share price
• China gaming ban brings BetaShares’ ASIA (ASX:ASIA) ETF into focus

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Beamtree Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Tinybeans Group Ltd (ASX: TNY) share price is surging during early afternoon trade. This comes after the tech company released its full year results for the 2021 financial year.

At the time of writing, Tinybeans shares are travelling 4.09% higher to an intraday high of $1.14.

Let’s take a look at how the company performed for the period.

Tinybeans share price surges on record result

Investors are snapping up Tinybeans shares after digesting the company’s latest results. Here are some of the key operational highlights:

• Revenue increased 102% on the prior corresponding period to US$8 million;
• Monthly active users lifted 16% to 4.33 million users;
• Net loss after tax of US$3.1 million, down 34.8%;

What happened in FY21 for Tinybeans?

Tinybeans achieved sales momentum throughout the year, largely driven by advertising revenues, up 125% to US$6.75 million. The broader rebound in United States advertising saw a number of brand partners and larger average campaign sizes.

In addition, subscription revenue grew 23% to US$860,000 due to improved conversion of existing users to paying subscribers.

The company invested more than US$2.5 million in product growth initiatives with early results beginning to materialise.

Tinybeans declared a cash balance of US$2.16 million and an average operating burn rate of US$0.4 million per quarter.

What did management say?

Tinybeans CEO Eddie Geller commented on the milestone achievement, saying:

We are pleased to report Tinybeans’ record-level operating performance during FY21. The rebound in COVID-19 impacted industries, such as travel and tourism, contributed to these record results, and we were pleased to see momentum build in our subscription revenues throughout the fiscal year.

FY22 outlook for Tinybeans

Looking ahead, Tinybeans did not provide much for its earnings or profit guidance for the new financial year. However, Mr Geller spoke about FY22 promising to be the most successful year yet, adding:

We are launching an array of new product upgrades that we believe will support acceleration in our consumer subscription revenues, and we aim to drive continued growth in advertising revenues through enhancing ad integration and adding new in-demand features.

We see our photos and sharing platform expanding as we double down on new areas of engagement that align with our vision of content, community, commerce and related services.

The post Tinybeans (ASX:TNY) share price rises on record revenue of US$8 million appeared first on The Motley Fool Australia.

More reading

• August hasn’t been a great month for the Rio Tinto (ASX:RIO) share price
• Why is everyone talking about Affirm stock?
• August hasn’t been a great month for the Beach Energy (ASX:BPT) share price
• China gaming ban brings BetaShares’ ASIA (ASX:ASIA) ETF into focus
• CBA (ASX:CBA) just failed the government’s superannuation test

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tinybeans Group Ltd. The Motley Fool Australia has recommended Tinybeans Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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August has brought a blow to the Rio Tinto Limited (ASX: RIO) share price despite the company staying relatively quiet.

Having ended July trading at $133.42, the Rio Tinto share price is now $112.92. It has slipped another 0.18% today.

Perhaps most peculiar is the fact there doesn’t seem to be any particular catalyst for Rio Tinto’s woes. Though, the company has recently had some bad press.

Let’s take a look at what the resource giant has been up to lately.

What’s weighing on the Rio Tinto share price?

The Rio Tinto share price had a rough trot in August. It has fallen about 15% between the end of July and the time of writing.

Rio Tinto has only released one announcement to the market in August. Last Tuesday it announced it was restarting its Richards Bay Minerals operation in South Africa after the security situation surrounding the mine stabilised.

While it’s not exactly ground-breaking news, Rio Tinto’s stock gained 1.3% last Tuesday.

Other news that might have moved the Rio Tinto share price in August was its earnings for the first half of 2021, which were released during the final days of July.

The 6 months ended 30 June 2021 was a good period for Rio Tinto. It saw US$33.08 billion in sales revenue and US$12.2 million in underlying earnings.

Additionally, Rio Tinto announced it’s investing $2.4 billion into a Serbia-based lithium project.

Despite the company’s seemingly strong performance and exciting news, the Rio Tinto share price dipped 0.1% on the back of its results.

Bad press

The small mountain of bad press that’s surrounded Rio Tinto lately likely isn’t helping its recover from its bad month on the ASX.

As the Motley Fool Australia covered recently, it has been reported that the company’s $1.4 billion cost blowout at the Oyu Tolgoi mine was caused by mismanagement rather than challenging conditions, as Rio Tinto claimed.

Additionally, Rio Tinto’s name has come up at the Western Australian parliamentary inquiry into sexual harassment against women in the FIFO mining industry. Those interested can read Rio Tinto’s submission to the inquiry here.

Finally, Rio Tinto is also in the headlines as, according to the Australian Financial Review, its planned lithium mine in Serbia has sparked protests in the European nation

Rio Tinto share price snapshot

Rio Tinto’s poor month on the ASX has seen it back into the long-term red.

Right now, its share price is about 2% lower than it was at the start of 2021. However, it’s still about 15% higher than it was this time last year.

The post August hasn’t been a great month for the Rio Tinto (ASX:RIO) share price appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price bounces despite looming iron ore supply outlook
• The materials sector is leading ASX 200 shares today
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• Pilbara Minerals (ASX:PLS) share price bounces back, up 8% on Monday
• ASX 200 Weekly Wrap: Miners drag ASX back to earth

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Affirm Holdings‘ (NASDAQ: AFRM) stock hit an all-time high after it announced a partnership with Amazon (NASDAQ: AMZN) on Aug. 27. Amazon is integrating Affirm’s “buy now, pay later” (BNPL) network into its marketplace. The new payment option will enable its shoppers to split purchases of $50 or more into smaller monthly payments. Amazon has already tested out Affirm’s service with select customers and plans to broaden its reach over the next few months.

That’s good news for Affirm, which already serves big customers like Walmart and Peloton, and it’s another vote of confidence for the BNPL market which has been growing in the shadow of traditional credit card companies. Let’s see why Amazon partnered with Affirm, how the deal could benefit both companies, and whether or not Affirm’s recent rally is worth chasing.

Cutting credit card companies out of the loop

Every time a shopper uses a credit card, the retailer pays a “swipe fee” of about 1% to 3%. The credit card company keeps most of the fee while the issuing bank and payment processor split the rest.

To avoid that fee, some retailers refuse to accept credit card payments. Others only accept credit cards with lower swipe fees while larger retailers often issue their own private label payment cards.

However, processing payments without credit card networks can be a difficult task. That’s why most retailers that issue private label cards work with automated clearing houses which charge much lower fees than credit card companies but take a longer time to process payments.

That’s where digital payment companies and BNPL services come in. Digital payment companies like PayPal (NASDAQ: PYPL) and Square (NYSE: SQ) charge merchants flat fees for processing all their card-based payments, regardless of the brand or issuing bank, as a simpler solution.

PayPal and Afterpay (OTC: AFTP.F) (which Square plans to acquire) also provide BNPL options that enable shoppers to split their payments into interest-free payments without using a credit card. That’s why it makes sense for Amazon, which relies heavily on credit card payments and didn’t offer any BNPL options yet, to team up with Affirm.

Is this a win-win deal for Amazon and Affirm?

Bank of America expects the market for BNPL apps to expand 10-15 times by 2025, with more retailers using the services to avoid swipe fees and more shoppers using them to avoid high interest fees.

Partnering with Affirm could help Amazon reduce the operating expenses at its retail business, which operates at much lower margins than its cloud business, and attract more shoppers. Amazon’s decentralized rival Shopify also recently partnered with Affirm to roll out BNPL services.

Affirm has already grown like a weed since its founding in 2012. Its revenue rose 93% to $509.5 million in fiscal 2020, which ended last June, and is expected to grow 64% to $834.5 million in fiscal 2021 when it posts its full-year earnings report on Sept. 9.

Affirm ended the third quarter of 2021 with 5.4 million active consumers, up 60% from a year ago. Its transactions per active customer rose 10% to 2.3. In addition, the number of active merchants more than doubled to nearly 12,000.

Analysts expect Affirm’s revenue to rise 38% to $1.15 billion next year, but those estimates haven’t factored in its partnership with Amazon yet. Amazon serves more than 300 million active customers worldwide, so Affirm’s revenue could soar as Amazon rolls out the feature for more shoppers.

However, Amazon and Affirm didn’t disclose if shoppers using Affirm’s BNPL service would pay any interest fees. PayPal’s “Pay in 4” and Afterpay both offer four interest-free payments to all consumers, but Affirm’s interest fees vary based on the retailer and the consumer’s credit score.

If Affirm waived its interest fees to work with Amazon, it might be sacrificing its margins to grow its market share and boost its brand recognition.

Is it the right time to buy Affirm?

Affirm isn’t profitable yet and its stock was already richly valued at over 20 times this year’s sales prior to its deal with Amazon. As of this writing, the stock trades at nearly 30 times this year’s sales.

Affirm’s high price-to-sales ratio might seem justified by its growth potential but investors should remember it’s not the only BNPL service in town. It’s still a nascent market and BNPL services integrated into major digital payment platforms like PayPal and Square could threaten Affirm’s stand-alone business model, which relies heavily on retail partnerships.

I personally prefer sticking with diversified fintech players like PayPal and Square to gain some exposure to the expanding BNPL market. However, investors with a bigger appetite for risk might still consider buying Affirm as a “pure play” on this high-growth niche in digital payments. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why is everyone talking about Affirm stock? appeared first on The Motley Fool Australia.

More reading

• Why Amazon stock rose on Monday
• 3 reasons Shopify should buy Affirm
• Why shares of Affirm Holdings were down over 16% in July
• Here’s why Affirm Holdings was up big on Monday

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Leo Sun owns shares of Amazon and Square. The Motley Fool owns shares of and recommends AFTERPAY T FPO, Affirm Holdings, Inc., Amazon, PayPal Holdings, Peloton Interactive, Shopify, and Square. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Beach Energy Ltd (ASX: BPT) share price has faced headwinds over the last month.

Whereas the S&P/ASX 200 index (ASX: XJO) has climbed 1.9% since the start of August, Beach Energy shares are 12% in the red.

Let’s find out why.

What’s up with the Beach Energy share price in August?

The Beach Energy share price started August exchanging hands at $1.24, which ended up being the high for the month.

Shares in the oil and gas explorer have since marched southwards, particularly after the company reported its FY21 earnings on 16 August.

In its report, Beach recognised a 36% drop in net profit after tax (NPAT) and a 4% decrease in oil production.

Management also gave softer than expected guidance of 21 million to 23 million barrels of oil equivalent in production for FY22.

Investors were quick to punish the company, wiping 10% in value from the Beach Energy share price and forcing it to close at $1.09 on the day of its earnings.

There was some reprieve in the days following, where a positive broker note from Citi on 18 August resulted in a 7% jump for Beach Energy shares.

Citi upgraded its rating to buy from neutral, with the posture that Beach will regain production strengths from FY23. However, it did trim its price target to $1.27, lower than Goldman Sachs’ target of $1.40. Goldman Sachs holds a neutral rating on the company’s shares.

The investment bank’s upgrade was not enough to fuel a recovery though, as the Beach Energy share price has continued to stumble within a tight range over the last two-three weeks.

In fact, Beach shares have given away a further 4% over the last 5 trading sessions to the time of writing.

There has been no other market-sensitive information released by the company over this time period. Therefore, it stands to reason that investors continue selling Beach Energy shares on the back of its lacklustre FY21 performance and guidance.

Some might say, life’s been a beach for the company over the month of August.

Beach Energy share price snapshot

The Beach Energy share price has had a difficult year to date, posting a loss of 42% since January 1. This extends the loss over the last 12 months to 31%.

These results have lagged the broad index’s return of around 25% over the past year.

Beach Energy shares are currently exchanging hands at $1.05 apiece, a further 1.41% dip into the red from the open.

The post August hasn’t been a great month for the Beach Energy (ASX:BPT) share price appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Wednesday
• Energy sector leading the ASX 200 shares on Tuesday
• 5 things to watch on the ASX 200 on Tuesday
• Which ASX 300 shares are the biggest winners and losers mid-week?

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BetaShares ASIA Technology Tigers ETF (ASX: ASIA) exchange-traded fund (ETF) is back in focus on Tuesday after a major announcement from the Chinese government last night.

In a dramatic move, China is opting to ban children from playing online games for more than 3 hours per week. Considering the People’s Republic holds the largest population of any country on the planet, as well as one of the highest youth populations, this decision could deal a significant blow to the gaming industry.

Tightening controls around addiction concerns

The hammer has been brought down by the China government to introduce even heavier restrictions on youth gaming overnight. This decision follows reports made earlier in August, dubbing gaming as ‘spiritual opium’ by the Chinese state media.

Under the new rules, people under the age of 18 will only be allowed to play online games under the tighten time constraints. These new gaming periods are reserved between 8:00 pm and 9:00 pm on Fridays, weekends, and public holidays.

As a result, children will typically be reduced to 3 hours of gaming per week. In comparison, the government’s previous allowance was for an hour and a half per day and up to 3 hours on public holidays. In other words, kids will go from 10 and a half hours per week down to 3, as the local government attempts to combat its concerns of gaming addiction. Unfortunately for ASIA ETF investors, some of the impacted companies are featured in the tech-focused investment.

To enforce these restrictions, the government will demand companies utilise real-name verification systems. Gaming companies will not be allowed to provide their services to minors outside of the specified timeframes.

Unsurprisingly, investors of internet and gaming companies with exposure to China have been unsettled by the announcement. At the time of writing, the Tencent Holdings Ltd (HKG: 0700) share price is down 3.3%. Likewise, Chinese PC and mobile games company NetEase Inc (NASDAQ: NTES) is trading 3.5% lower.

ASIA ETF exposure

When it comes to the BetaShares ASIA ETF, 45.5% of the fund’s holdings are exposed to China. At the same time, many of these companies are geared towards the internet, gaming, and/or online media sectors. For instance, 17.8% of the fund is in the ‘interactive media and services’ sector. Meanwhile, 9.5% is allocated to ‘interactive home entertainment’.

This is evident when looking at the ETF’s top 10 holdings. According to the July fact sheet, the ASIA ETF counted Tencent as its fourth-largest holding at 9.2%. Another familiar face is NetEase, sitting at the tenth spot with a 3.4% weighting.

At the time of writing, the BetaShares Asia Technology Tigers ETF holds $665 million of total assets under management.

The post China gaming ban brings BetaShares’ ASIA (ASX:ASIA) ETF into focus appeared first on The Motley Fool Australia.

More reading

• Why is the Future Fund bailing out of China shares?
• 2 top ETFs for ASX investors in September
• 2 ASX shares that may be worth looking at this weekend
• BetaShares ASIA (ASX:ASIA) ETF slumps amid China slowdown
• 3 quality ASX growth shares for August

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended NetEase. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The DGL Group Ltd (ASX: DGL) share price is rocketing higher, up more than 10% at time of writing after earlier posting gains of more than 14%.

DGL Group began trading on the ASX on 24 May, following a successful IPO.

Below we take a look at the chemical manufacturer and waste recycler’s financial results for the year ending 30 June (FY21).

DGL share price surges on FY21 results

Some top results likely boosting the DGL share price this morning include:

• Pro-forma sales revenue of $196 million, an increase of 9% from FY20 and 3% higher than prospectus forecast
• Pro-forma earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 47% year-on-year to $28.1 million, 8% higher than prospectus forecast
• Pro-forma net profit after tax (NPAT) of $11.3 million increased 135% on the prior year and came in 19% more than prospectus forecast
• Net cash of $43.8 million on the balance sheet

What happened during the reporting period for DGL Group?

Undoubtedly the biggest happening for DGL during the financial year was its successful initial public offering. The IPO saw the company raise $100 million before it began trading on the ASX on 24 May.

FY21 also saw DGL acquire the Chem Pack manufacturing business in January to expand its Chemical Manufacturing division’s capabilities. The company reported Chem Pack has now been successfully integrated into its wider business.

DGL said revenue increased across all 3 of its divisions year-on-year.

The Chemical Manufacturing division revenue increased 3% to $97.3 million. It attributed the growth to an increase in demand for chemicals from a strongly performing agriculture sector along with growth from its acquisition of the Chem Pack business. While this came in below the prospectus forecast of $104 million revenue for the division, DGL said that forecast assumed a full year contribution from Chem Pack.

The Warehousing and Distribution division saw revenue increase by 48% to $40.9 million, well above the prospectus forecast of $31.8 million. Revenue increased largely due to a higher utilisation of its warehousing facilities in Australia and New Zealand.

There was also a 2% increase in revenue from the Environmental Solutions division, to $63.4 million, compared to a prospectus forecast of $59.2 million. The company recommenced operations of its refurbished Victorian lead smelter “ahead of schedule and on budget”. This saw more lead bullion output than it had forecast.

What did management say?

Commenting on the results, DGL’s founder and CEO Simon Henry said:

This year has been a transformative year for DGL, listing on the ASX and welcoming new shareholders to our business, while raising $100 million to fund growth initiatives into the future.

I am very pleased we have been able to deliver on our initial promises, as set out in the prospectus, both at an operational level and financial level. Pro-forma net profit after tax was 19.4% higher than we had originally estimated in our prospectus…

We will continue to use funds from the IPO, as well as the strong cash generation of our business, to pursue growth opportunities…The diverse industries we service — agriculture, mining, construction and infrastructure – have positive long-term outlooks. We are an essential business serving these critical sectors.

What’s next for DGL?

Looking ahead, DGL said it expects to beat prospectus forecasts for FY22. The pro-forma NPAT forecast for FY22 is $10.4 million while the pro-forma EBITDA forecast is $29 million.

Henry noted that these don’t “include the revenue and profit contribution from recently acquired businesses, Labels Connect and Opal Australasia, and favourable trading conditions experienced to date”.

The company said it has not been materially impacted by COVID-19 lockdowns to date.

The DGL share price is up 136% since the company began trading on the ASX on 24 May.

The post DGL (ASX:DGL) share price rockets 10% on surging profits appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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