Income: Lettings fund dividend growth

Andrew Hore
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Income: Lettings fund dividend growth

Residential sales have declined in the past year or so, but those property services providers with strong lettings businesses can offset this downturn. One of these companies is in the top 70 AIM performers during 2023 and it still offers a yield of 4%.
The dividend is covered 1.8 times by forecast earnings. Even more importantly, the dividend could grow at around 7%/year.
There are two-thirds of revenues that are recurring, and forecasts have remained steady. Lettings revenues were 12% ahead in the first half and they are set to continue to grow. The ONS UK annual private rental index was 5....

Aquis weekly movers: Share price of new artificial intelligence flotation nearly trebles

Andrew Hore
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1
Aquis weekly movers: Share price of new artificial intelligence flotation nearly trebles

Kondor AI (KNDR) joined the Access segment of Aquis on 21 September having raised £1.5m at 3p/share and by the end of the week the share price was 8.25p. There was £400,500 raised in November. Kondor AI intends to develop artificial intelligence products in areas such as health diagnostics, search and text recognition. A beta demonstration product is being tested.

Last week’s new admission Investment Evolution Credit (LON: IEC) has risen 233% to 20p on the week. The flotation price was 4.5p.

Secured Property Developments (LON: SPD) has appointed Paul Ryan as executive director and Noel Lyons as non-exec and they have acquired £150,000 worth of shares at 26.11p each. The existing directors resigned. It appears likely that the focus may change to technology and cleantech. Peterhouse has become corporate adviser. The changes sparked a 60% rise in the share price to 20p.

Coinsilium Group (LON: COIN) says a recovery in cryptocurrency markets is having a positive effect on the company. The expected approval of the first spot Bitcoin ETF should create more opportunities. The share price recovered 29.6% to 1.75p.

Aquaculture technology developer OTAQ (LON: OTAQ) had a strong second half and full year revenues will be £4.4m, which is higher than expected. Oil and gas demand has improved. There was positive EBITDA in the second half. There are opportunities in Geotracking for next year. The share price moved ahead 28.6% to 4.5p.

Vanadium flow batteries developer Invintiy Energy Systems (LON: IES) says full year revenues will be at least £21.6m, which is below forecast, and the EBIDA loss will be higher than expected at £22m. That means net cash will be around £1m. Forecast revenues for 2024 have been downgraded and the loss raised. This is based on exiting projects. Canaccord Genuity believes that there will be a cash injection from a strategic partner, which will offset the cash outflow in 2024. The share price increased 16.4% to 32p, the highest level for one month.

Valereum (LON: VLRM) has renegotiated the acquisition of the GSX Group, which is dependent on the approval of shareholders. It is paying five million shares and 10 million warrants exercisable at 1p each. The deal includes GATENet DFMI intellectual property, which puts the group in a strong position in tokenisation. The GATE token will the sole token used. As part of the deal former AIM boss Simon Brickles will become a non-executive director. GSX chief executive Nick Cowan will take up that role in the group. The share price improved 11.4% to 4.9p. This is the highest the shares have been since June.

Good Life Plus (LON: GDLF) completed its reversal into Semper Fortis Esports. There was £1.4m raised at 2p/share. The share price improved 11.1% to 2.5p. The business has been trading for just over two years and it offers members daily prize draws. There are more than 21,000 active members and monthly recurring revenues are £210,000. The company is currently loss-making, partly due to investment in marketing, although the increasing scale means gross profit is improving. The cash will fund further investment in marketing. Sportingbet founder Mark Blandford is one of the new investors.

Tap Global (LON: TAP) is reporting figures for the year to June 2023 on 28 December. The shares are 10.8% higher at 2.05p.

Wishbone Gold (LON: WSBN) is exercising the option over the Crescent East lithium and gold project in Western Australia. In return, 18.6 million shares worth around £400,000. Gold mineralisation has been confirmed and there is potential for lithium in the southern area. The share price rose 3.57% to 1.45p.

Incanthera (LON: INC) has secured a commercial deal with a subsidiary of health and beauty company AS Watson for the launch of the Skin + CELL skincare range. This should generate significant revenues in 2024. The plan is to roll out the brand to 1,000 stores in Europe, followed by Asia. Manufacturing has been subcontracted. To fund this, £800,000 was raised at 7p/share and £200,000 of debt owed to the University of Bradford was converted into shares. There was net debt of £199,0090 at the end of September 2023. The share price improved 3.17% to 6.5p.

Personalised medicine company EDX Medical (LON: EDX) had £1.1m in the bank at the end of September 2023. There was £1.5m outflow from operating activities in the six months to September 2023. The share price edged up 2.22% to 5.75p.

FALLERS

Mydecine Innovations Group Inc (LON: MYIG) is the largest faller on the week with a 70.6% decline to 2.5p, even though it has received notice of allowance from the US patent office for the MYCO-005 compound. It mimics psilocin but without some of the side effects.

ChallengerX (LON: CXS) has moved from net assets of £282,000 to net liabilities of £33,000 at the end of June 2023. The share price dipped 11.1% to 0.8p.

Rogue Baron (LON: SHNJ) has raised £50,000 at 0.35p/share. The share price dipped 9.52% to 0.475p. The spirits company is still performing due diligence on the acquisition of a vodka brand.

Marula Mining (LON: MARU) says dual listings on the Nairobi Stock Exchange and JSE should happen in the first quarter of 2024. Indicative terms have been received indicative terms for an offtake agreement with a European commodity trader for the lithium output of Blesberg lithium and tantalum mine. Transportation of the modular processing plant for the Kinusi copper mine will not happen until early 2024. The share price fell 5.77% to 12.25p.

Cadence Minerals (LON: KDNC) investee company European Metals Holdings (LON: EMH) says that the definitive feasibility study for the Cinovec lithium project in the Czech Republic has been delayed until the first quarter of 2024. This will allow time to complete capital and operating cost estimation and project implementation scheduling. The Cadence Minerals share price slipped 7.62% to 4.85p and the European Metals Holdings share price slipped 21.9% to 20.5p.

SulNOx Group (LON: SNOX) says that its Ghana-based distributor has purchased 3,700 litres of SulNOxEco fuel additive and committed to a minimum of 15,000 litres each year, which is valued at £250,000. SulNOx has raised £1.8m at 23p/share. The share price is down 1.92% to 25.5p.

Income: Building the dividend

Andrew Hore
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1
Income: Building the dividend

This AIM-quoted building products supplier has sharply outperformed AIM with a gain of 18% in 2023. Yet it is still offering a forecast yield of 6% with potential for steady growth in the dividend.
The dividend is covered 2.3 times by forecast earnings. That dividend cover can be rebuilt as the business recovers. The latest acquisition should be immediately earnings enhancing. Improved efficiency and new product launches have helped to hold up profit in a tough time for the construction sector.
CPA forecasts were released in the summer showing the overall construction market set to fall by 7%...

AIM weekly movers: Helium One Global shares fall below placing price

Andrew Hore
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5
AIM weekly movers: Helium One Global shares fall below placing price

Bidstack (LON: BIDS) has sorted out its problem with Azerion and the share price more than doubled to 0.75p. The in-game advertising technology provider has reached a settlement with Azerion, which will pay €3m to Bidstack. The two parties will form a new non-exclusive commercial partnership in 2024.

Video games publisher tinyBuild (LON: TBLD) has secured the cash it requires for working capital. The fundraising includes a one-for-six open offer and should raise $14.2m at 5p/share. The share price recovered 81.8% to 4p. Interactive entertainment company Atari is investing $2m. Chief executive Alex Nichiporchik will underwrite up to $10m of the fundraising. The video games market continues to deteriorate. Full year revenues are likely to be between $40m and $50m with a greater than expected proportion of lower margin games. Cost cutting should reduce cash outflow by up to $10m/year.  

Financial Website operator ADVFN (LON: AFN) was hit by a tough retail environment. Revenues declined and the loss increased despite a reduction in costs. Management believes that investing in a new app and other parts of the product offering will help it to recover. The plan is to increase income via traffic growth. Hosting and IT expenses can be reduced further. There is £5.6m in the bank. The share price bounced back 65.2% to 19p.

GCM Resources (LON: GCM) is still waiting to receive a further drawdown of £300,000 on the Polo Resources loan facility. The cash is required before the end of the year. The share price rose 46.7% to 2.75p.

FALLERS

Helium One Global (LON: HE1) announced a placing raising £6.1m at 0.25p/share. The share price has fallen by 78.3% to 0.245p. This will fund the drilling of the Itumbula West-A well starting in early January. There will also be 25.1 million shares issued in lieu of fees.

Supercapacitors manufacturer Cap-XX (LON: CPX) says interim revenues were 35% ahead. The focus is building up sales, but a full year loss is still expected. Cap-XX lost a patent infringement case in the US with Tesla subsidiary Maxwell Technologies Inc. The case affirmed that the Cap-XX patents were invalid, so Maxwell Technologies does not infringe them and does not have to pay licence fees or damages. The share price slumped 54.4% to 0.775p.

Investment company Mindflair (LON: MFAI), formerly Pires Investments, raised £730,400 at 0.8p/share to provide additional cash for investments. Investee company Emergent Entertainment is set to be placed in liquidation. This investment contributed 0.7p/share out of NAV of 4p/share at the end of June 2023. The total cost of the investment was less than $200,000. The share price dived 37.9% to 0.9p.

Fewer M&A deals completed by Convex Capital has hit the 2023 outcome for RBG Holdings (LON: RBGP). Trading of the core legal services business was also disappointing. It means that there will be a small loss for 2023, rather than a previously forecast pre-tax profit of £5.6m. Net debt is likely to be £23.1m at the end of 2023, just below the total facility level of £24.5m. The share price slipped 37.9% to 10.25p. Discretionary clients of Dowgate cut their stake from 3.64% to 2.78%, while Dowgate advised Onward Opportunities (LON: ONWD) has increased its stake from 4.17% to 4.35%.

Identifying Value Stocks in the World of AI

UK Investor Magazine
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Identifying Value Stocks in the World of AI

The stock market is an ever-evolving beast, constantly shaped by new technologies that aim to give investors an edge. The addition of artificial intelligence (AI) to the mix is one of the biggest developments in recent years. With deep insights and predictions that were previously unattainable by humans, investment platforms using AI to analyse performance have completely changed how people approach the stock market. Investors are opening up a world of data-driven decision-making by utilising machine learning, which allows them to identify possible value stocks with previously unheard-of accuracy.

Understanding AI’s influence on market analysis

More than a mere buzzword in the tech industry, artificial intelligence fundamentally revolutionises investment strategy development. AI systems undergo processes where they analyse vast volumes of market data. This includes not only financial reports but also global economic indicators. The goal is to learn and adapt; over time, it enhances their predictive models, thus revealing potential investment opportunities that traditional analysis might otherwise miss, especially within the value stocks domain.

Advances in AI technology are actively reshaping strategies and levelling the playing field for retail investors, thanks to its dynamic synergy with market data. No longer exclusive to hedge funds or institutional investors is sophisticated market analysis, as these developments democratise financial data analysis. Consequently, this empowers retail investors by granting them access to tools that enhance decision-making precision; furthermore, it may potentially unveil hidden gems within value stocks through insightful investigations.

Deciphering market signals with machine learning

In the daily deluge of market noise, AI efficiently filters signals suggesting undervalued stocks. It analyses myriad variables – such as company performance, market trends and economic factors – that contribute to the determination of a stock’s true value. Moreover, AI systems use benchmarking against historical data to compare current performance with past trends; this strategy enhances their forecasting ability and proves particularly beneficial for value investors seeking long-term returns.

AI’s machine learning algorithms outperform in detecting subtle patterns within extensive datasets. These patterns may signify a stock’s undervaluation or forecast future growth. Some AI platforms sort through news articles, social media conversations, and financial documents by integrating natural language processing; this allows them to measure market sentiment. This capacity can serve as an influential indicator for assessing the potential prospects of a value stock.

Combining technological and human insights

Although AI has strong analytical capabilities, humans are still necessary. AI is used by investment platforms for sophisticated data curation and projections. Investors must consider qualitative factors, such as changes in the industry and management calibre, which are sometimes difficult to quantify, to fully comprehend these results in a broader context. AI and human cooperation, which aims to find the optimal balance between algorithmic recommendations and expert judgment, allows for a more sophisticated approach to stock selection.

Achieving success in the investment world requires finding a balance between highly developed AI insights and skilled human judgment. An investor can effectively construct a hybrid strategy by harnessing AI’s expeditious data processing capabilities in conjunction with their expertise for qualitative analysis. This synergistic amalgamation proves most advantageous in assessing the intrinsic worth of stocks amidst pervasive market unpredictability.

The metrics of successful AI platforms

Investors have the crucial task of evaluating the proficiency of AI-powered investment platforms, with a specific emphasis on two critical performance measures: precision in market predictions and the ability to identify high-potential stocks. A steadfast track record of consistently recommending stocks that outperform market benchmarks serves as a credible gauge for assessing the merit of a platform. Furthermore, when fellow investors voice their triumphs resulting from heeding AI counsel, they can substantially attest to a platform’s promise.

When assessing AI platforms for potential investors, one must take into consideration their transparency and prior track record. The term ‘Explainable AI‘ refers to a platform’s ability to provide clear explanations of its algorithmic methods that result in definitive outcomes; this strengthens the confidence of investors. By placing greater faith in transparent AI decision-making processes, investors have the opportunity to improve their own decision-making abilities.

Adapting strategies in an AI-driven market

In a market where artificial intelligence reigns supreme, investors must maintain their adaptability. As AI continues to advance, it elevates existing analytical methods and unveils innovative avenues for interpreting data, making it imperative for proactive investors to regularly assess their strategies in light of these advancements – ensuring alignment with the most current market data available. To stay ahead in this emerging landscape, one must acknowledge the importance of understanding how AI could redefine value within the stock market.

The incorporation of AI into the investment sector represents a noteworthy transformation in the process of identifying and utilising profitable stock selections. By combining the knowledge of investors with AI-generated intelligence, a potent approach is established for navigating the intricacies of the market. In this sophisticated and information-driven environment, the insight of astute investors ultimately guides critical decisions that pave the way for potential financial progress and triumph, despite valuable contributions from AI algorithms.

Tekcapital shares soar on upbeat corporate update

UK Investor Magazine
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Tekcapital shares soar on upbeat corporate update

Tekcapital shares surged higher on Friday after the technology investment company released an upbeat corporate and strategy update ahead of the new year.

Investors were evidently encouraged by a year of progress at Tekcapital’s portfolio companies and were looking forward to another year of growth in 2024.

Notably, Tekcapital said they saw ‘accelerating commercial traction’ for their portfolio companies in the coming year.

Shareholders would have also welcomed an update on the MicroSalt IPO.

Tekcapital said they were still assisting the low-sodium salt technology company with the completion of their IPO. Although Tekcapital did not state when they expected the IPO to be completed, the language used suggests MicroSalt may be trading in London before long.

The company noted significant MicroSalt orders and alluded to promising news from the company in 2024.

“Despite challenging macroeconomic conditions in 2023, we have never been as excited about the near-term commercial opportunities for our portfolio companies, and we expect to report significant additional milestones for them in the coming year,” said Dr Clifford Gross, CEO of Tekcapital plc.

“We are grateful for the terrific teams we have assembled, the IP and innovation they have acquired and developed and their steadfast efforts to bring useful and valuable products to market that can make a positive impact on the customers they serve.”

“Further, we are most appreciative of our dedicated shareholders who have made this journey possible. We wish all members of the Tekcapital family a safe and happy festive season.”

Tekcapital shares were 6.9% higher at the time of writing.

AIM movers: Bidstack reaches €3m settlement and Bermuda authorities ask for review at R&Q Insurance

Andrew Hore
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6
AIM movers: Bidstack reaches €3m settlement and Bermuda authorities ask for review at R&Q Insurance

The Bidstack (LON: BIDS) share price has doubled to 0.65p and it was higher earlier in the day. The in-game advertising technology provider has reached a settlement with Azerion, which will pay €3m. The two parties will form a new non-exclusive commercial partnership in 2024.

Webis (LON: WEB) US subsidiary WatchandWager.com has renewed an agreement with Monarch Content Management to accept wagers on all the latter’s 15 racetracks in 2024. The company has also renewed its regulatory licences. The share price is 30% ahead at 1.3p.

Georgia-focused oil and gas producer Block Energy (LON: BLOE) is ready to farm-out the project III asset of multi-TCF undeveloped gas resource. This could have a material impact on NAV. Current production should generate the cash required to fund its strategy. Management will stop publishing quarterly reports. The share price increased 12.1% to 0.925p.

Vela Technologies (LON: VELA) says that Conduit Pharmaceuticals published a prospectus on 15 December and since then it has been able to sell shares received via the AZD 1656 put option. Vela Technologies received just over one million Conduit Pharmaceuticals shares. There was £31,000 in cash at the end of September 2023. NAV was £7.5m, compared with a market capitalisation of £3.7m at 0.0255p, up 10.9%.  

FALLERS

The Bermuda Monetary Authority has asked R&Q Insurance Holdings (LON: RQIH) to provide an independent actuarial review of the required reserves, capital and cash flow projections following the planned disposal of the Accredited business. Any new external transactions will have to be put on hold and is not allowed to redeem $20m in subordinated notes until after the review. The share price slumped 21.9% to a new low of 8.59p.

European Metals Holdings (LON: EMH) says that the definitive feasibility study for the Cinovec lithium project in the Czech Republic has been delayed until the first quarter of 2024. This will allow time to complete capital and operating cost estimation and project implementation scheduling. The share price slipped 18.8% to 20.5p.

Cleantech company Verditek (LON: VDTK) has adjourned the general meeting to increase the authority to allot shares. There have been discussions with shareholders concerning the way to finance the business. The share price is 7.89% lower at 0.175p.

Tungsten West (LON: TUN) had cash of £1.4m at the end of September 2023. Plant upgrade projects at the Hemerdon mine in southwest England will recommence after the outcome of the permit application and financing has been obtained. Interim revenues increased from £208,000 to £722,000 as tungsten was produced from legacy materials. The loss increased from £5.13m to £9.13m. The share price fell 7.69% to 1.2p.

Tip update: Hargreaves Services increasing dividend despite German slowdown

Andrew Hore
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Tip update: Hargreaves Services increasing dividend despite German slowdown

Trading has not gone to plan but Hargreaves Services (LON: HSP) is able to offer an enhanced dividend pay out. The pre-tax profit forecast for the year to May 2023 has been slashed, but the shares remain modestly rated and the yield is more than 8%.
The core services operations are doing better than expected, thanks to HS2 demand, and the land division is likely to make the anticipated contribution. Reduced commodity prices and a slowdown in the German economy have hit the performance of German associate company HRMS, which is expected to make a first half loss. It should make a full year prof...

AIM movers: tinyBuild secures cash and ex-dividends

Andrew Hore
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0
AIM movers: tinyBuild secures cash and ex-dividends

Video games publisher tinyBuild (LON: TBLD) has secured the cash it requires for working capital. The fundraising includes a one-for-six open offer and should raise $14m at 5p/share. The share price recovered 50% to 3.75p. Interactive entertainment company Atari is investing $2m. Chief executive Alex Nichiporchik will underwrite up to $10m of the fundraising. The video games market continues to deteriorate. Full year revenues are likely to be between $40m and $50m with a greater than expected proportion of lower margin games. Cost cutting should reduce cash outflow by up to $10m/year.  

Financial Website operator ADVFN (LON: AFN) was hit by a tough retail environment. Revenues declined and the loss increased despite a reduction in costs. Management believes that investing in a new app and other parts of the product offering will help it to recover. The plan is to increase income via traffic growth. Hosting and IT expenses can be reduced further. There is £5.6m in the bank. The share price bounced back 43.5% to 16.5p.

GlobalData (LON: DATA) has agreed the sale of a 40% stake in its healthcare division to Inflexion and it expects to receive from £434m the deal. This moves GlobalData into net cash, which will finance acquisitions, and points out the undervaluation of the group. Singer has increased its target price from 178p/share to 231p/share. The share price improved 19.4% to 191p.

Europa Oil & Gas (LON: EOG) is spending $3m on a 42.9% interest in Antler Global, which owns 80% of the EG-08 exploration licence, offshore Equatorial Guinea. The cash invested will fund acquisition of 3D seismic data. A partner will be brought in for drilling. The share price is 10% higher at 1.1p.

FALLERS

Helium One Global (LON: HE1) announced a placing raising £6.1m at 0.25p/share. The share price has fallen by two-thirds to 0.2425p. This will fund the drilling of the Itumbula West-A well starting in early January.

Scirocco Energy (LON: SCIR) is selling its interest in Energy Acquisitions Group for an enterprise value of £2.6m, plus up to £150,000 in contingent consideration depending on acquisition of anaerobic digestion sites, to OrbeNovo Sponsor. The business requires significant investment, which would be difficult to raise. This is conditional on shareholder approval. The board is reviewing options. The share price fell 18.2% to 0.225p.

Oil and gas producer Caspian Sunrise (LON: CASP) says current production is steady at 2,000 barrels/day. The interval tested at Well 142 was not commercial. Further drilling is being undertaken. Realisable prices in Kazakhstan are much lower than international prices. The share price decreased by 12.7% to 2.4p.

SRT Marine Systems (LON: SRT) is raising £10m at 35p/share with up to £500,000 more to come from a retail offer. This includes a £7m investment by Ocean Infinity. There were no revenues from systems in the first half, but they should make a significant contribution as work on contracts reaches points where it can be invoiced. Earlier this year, SRT raised £5.36m from a placing and Primary Bid offer at 50p/share. The share price is 8.43% lower at 38p.

Ex-dividends

Aeorema Communications (LON: AEO) is paying a dividend of 3p/share and the share price fell 10p to 97.5p.

CML Microsystem (LON: CML) is paying an interim dividend of 5p/share and the share price declined 1p to 374p.

MS International (LON: MSI) is paying an interim dividend of 3p/share and the share price increased 15p to 880p.

PHSC (LON: PHSC) is paying an interim dividend of 0.75p/share and the share price declined 1.5p to 23p.

Real Estate Investors (LON: RLE) is paying a dividend of 0.63p/share and the share price is unchanged at 29.25p.

Legal & General shares: why 2024 will be rewarding for investors

UK Investor Magazine
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Legal & General shares: why 2024 will be rewarding for investors

Legal & General shares have the potential to help investors achieve their investment goals in 2024.

The FTSE 100 stalwart has shaken off the worst of the macroeconomic concerns, and the Legal & General share price is around 25% higher than the worst levels of 2023.

With the shares now trading in the vicinity of 52-week highs, investors will question whether it has the momentum to break through 260p – 270p and attack 300p in 2024.

There is a weight of supporting factors that suggest it will.

Legal & General trades at 6.7x historical earnings. No matter what happens to earnings in the next year, this is cheap and underscores the opportunities in the shares. At a 6.7x multiple, Legal & General shares have a long way to go before they trade back in line with historical averages.

Apart from 2020 and 2022, Legal & General’s historical PE Ratio has averaged above 10 on an annual basis every year since the financial crisis.

Although one may want to hold off jumping straight into Legal & General shares at the current price or set out a dollar-cost averaging strategy, the capital appreciation element of Legal & General shares in 2024 is compelling.

Despite a rip-roaring rally through Q4 2023, Legal & General shares still yield 7.7%. The dividend is well covered at 1.9x, and the company is committed to a progressive dividend policy. One would expect the dividend to increase in 2024.

Improving macroeconomic environment

It is not that the economy is entirely out of the woods that supports Legal & General’s investment case, but more that there is light at the end of the tunnel. Investors can see a clear path to a more favourable macro environment.

Inflation rates are falling globally, and interest rates will not be too far behind. Lower interest rates will boost financial conditions and support Legal & General’s top and bottom lines.

The doomed mini-budget in 2022 that rocked Legal & General’s fixed-income activities is now a distant memory, and the shares deserve a rerate.

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