Amaero International Limited (ASX: 3DA)
Incorporated in 2019, is an Australian company engaged in R&D, manufacture and sale of laser-based metal additive goods by using Three-Dimensional Metal Printing Technique. It caters aviation, defense, space and tooling customers, operating in USA and Australia. Its market capitalization stood at AUD 89.22 million as of 19th October 2021, at the stock price of AUD 0.42 per share.
Financial and Operational Updates: On 18th October 2021, it entered into a Head of Agreement (HoA) with Gilmour Space Technologies for a three-year long-term contract of supplying rocket components, estimating a revenue of ~AUD 1.7 million, to be commenced in FY22. On 2nd September 2021, a revised guidance has updated its revenue capacity from AUD 30 million p.a. to AUD 40.8 million p.a. for its Ti Powder Plant. On 30th August 2021, it released various updates:
- Evaluation parts to Boeing – world’s largest aerospace manufacturer – delivered in June quarter 2021,
- The first batch of ingots manufactured by Rio Tinto were received by 3DA in the June quarter 2021, as per the agreement executed in March 2021.
- As per the announcement on 28th July 2021, it expects the Heads of Agreement (HoA) and negotiations for its Middle East 3D Printing Centre will commence in 1HFY22.
As per the Appendix 4E and Audited Financial Report released on 30th August 2021, 3DA showed a ~332% Y-o-Y increase in Revenue from ordinary activities to reach ~AUD 0.50 million for FY21 as against ~AUD 0.11 million in FY20. Its Net Loss for the period of FY21 increased ~21% Y-o-Y from ~AUD 5.77 million in FY20 to ~AUD 6.99 million in FY21. Cash at the end of FY21 was reported as ~AUD 11.46 million as of 30th June 2021 versus ~AUD 4.01 million in PcP.
Technical Analysis: On the daily chart, 3DA price has given a breakout of the downward sloping trendline by upside after hitting a 52-week low at AUD 0.37 last week. There is a positive RSI divergence with price clearly visible on a daily chart which also supportive for the upside price movement. The leading indicator RSI (14-period) also moved upwards from the oversold region and currently trading at ~44.701 level indicating bullish momentum for near term. The crucial support and resistance levels are AUD 0.36 and AUD 0.57, respectively.
However, the company is running into losses, but considering its alliance updates with big names like Boeing and expected global spread over Middle East, makes the outlook positive. Hence considering its current price levels, the investors with a high-risk appetite can consider it for a ‘Speculative Buy’ position, keeping the support and resistance levels as crucial points. The stock was analysed as per the current price of AUD 0.42 per share, 12:35 PM (GMT+10), Sydney, Eastern Australia, as of 19th October 2021. However, the risk levels are high depending on its actual efficiency in performance.
Daily Technical Chart – 3DA
Source: REFINITIV
Kip McGrath Education Centres Limited (ASX: KME)
As incorporated in 1987, KME helps primary and secondary school age children around the world by providing written and computer-based activities program services through franchisees in the education field. It caters to students in Australia, UK and NZ. It holds a market capitalization of AUD 50.13 million as of 19th October 2021, at the stock price of AUD 1.00 per share.
Financial & Operational Updates – As per the announcement dated 1st September 2021, it announced to purchase 70% stake in the US based business Tutorfly.com for an initial payment of USD 0.5 million and the same amount after achieving USD 20k per month net revenue targets (net of tutor fees). On 27th August 2021, Regal Funds Management Pty Ltd (RFM) changed its substantial holding from 9.10% to 10.2%. It paid fully franked final dividend of AUD 0.01 per share to its shareholders on 23rd of September 2021. As per the Appendix 4E and Annual Report to shareholders released on 24th August 2021, KME showed a ~12.6% Y-o-Y increase in Revenue from ordinary activities to reach ~AUD 19.27 million for FY21 as against ~AUD 17.12 million in FY20. Its Net Profit after Tax increased ~10.2% Y-o-Y from ~AUD 1.57 million in FY20 to ~AUD 1.73 million in FY21. Cash at the end of FY21 was reported as ~AUD 10.57 million as of 30th June 2021 versus ~AUD 12.17 million in PcP. On 17th August 2021, to align with the global policy of centralising the franchise servicing, it entered in an agreement to buy back the Area Developer territory covering 32 centres for Scotland from Gerald Casserly for total ~AUD 0.47 million. This will have a positive impact of EBITDA to the tune of ~AUD 0.10 million for FY22.
Technical Analysis: On the daily chart, KME has started gaining momentum after hitting a 52-week low of AUD 0.892 at the start of October 2021. The momentum oscillator RSI (14-period) is also recovering from the lower levels and is currently placed at ~47.796 levels. The CMP is trading below 50-period SMA and 21-period SMA with a narrow margin and may surpass these indicators in coming sessions if the momentum persists. The crucial support and resistance levels are AUD 0.892 and AUD 1.14, respectively.
Considering company’s increase in revenue, improvement in profitability and global expansion strategies, the investors with a high-risk appetite can consider it for a ‘Speculative Buy’ position, keeping the support and resistance levels as crucial points. The stock was analysed as per the closing price of AUD 1.00 per share, up by ~4.166%, as of 19th October 2021. However, the risk levels are high depending on the gap between its expected and actual efficiency in performance.
Daily Technical Chart – KME
Source: REFINITIV
Orocobre Limited (ASX: ORE)
Incorporated in 2005, ORE is an Australia based global lithium carbonate supplier and a producer of boron, where the Lithium operations and its deposits are held in Argentina. The company operates in three main segments: Corporate, the Olaroz project and Borax. Its market capitalization as of 19th October 2021 stood at AUD 5.78 billion and the share price stood at AUD 9.04 per share.
Financial and Operational Updates: Its September Quarterly Production Report will be released on 22nd October 2021, as announced on 8th October 2021. In a series of filings, Australian Super Pty Ltd, Ausbil Investment Management Limited, Svenska Handelsbanken AB Publ, and Toyota Tsusho Corporation changed its substantial shareholding. On 25th August 2021, the scheme of arrangement related to the merger with Galaxy Resources Limited (ASX: GXY) was implemented, and the newly issued shares of ORE commenced its trading on ASX since 26th August 2021. As per the release of Annual Report to shareholders on 25th August 2021, ORE showed an increase in Revenue from contracts with customers reported as ~USD 84.76 million for FY21 as against ~USD 77.08 million in FY20. Its Net Loss for the FY21 increased from ~USD 67.15 million in FY20 to ~USD 89.47 million in FY21. Cash at the end of FY21 was reported as ~USD 258.31 million as of 30th June 2021 versus ~USD 171.83 million in PcP. According to the Investors Presentation update on 25th August 2021, its consolidated revenue as ~USD 155.45 million, consolidated net loss as ~USD 34.30 million and accumulated cash at the end of FY21 as ~USD 458.42 were shown in proforma merged company statements.
Technical Analysis: On a daily chart, after hitting 52-week high at AUD 10.08 in September 2021, ORE’s prices have started consolidating. The CMP has surpassed both the trend-following indicators 21-period SMA and 50-period SMA. However, there is a negative crossover between the 21-period SMA and 50-period SMA, indicating a reversal pattern in short period supported by negative divergence in RSI (14-period) currently placed at ~56.919. Immediate support levels are AUD 7.89 and AUD 6.89 while Immediate resistance levels are AUD 9.57 and AUD 10.08.
As mentioned above, its current price levels seems to be on higher side and a major event of September Quarterly Update is on its way to be released on 22nd October 2021. The risk attached in investing in the scrip should be taken in consideration with a cautious approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 9.04 per share, as of 19th October 2021.
Daily Technical Chart – ORE
Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.
The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).
The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).
The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
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