1. Boom Logistics Limited (Recommendation: Speculative Buy, Market Cap: ~$68.44 million)

Improved Bottom Line in H1FY21: Boom Logistics Limited (ASX: BOL) is a lifting solutions company that helps in building new bridges, constructing and installing wind farms, maintaining heavy plant and equipment, and optimising existing infrastructure.

• For H1FY21, the company reported revenue of $84.2 million, down by 11.3% on pcp, impacted by the COVID-19 pandemic. Statutory EBITDA for H1FY21 stood at $17.9 million, up by 49.2% on pcp. NPAT for H1FY21 stood at $0.4 million, up from the loss of $5.8 million in pcp.
• Cash and Debt Scenario: As at 31 December 2020, the company had cash of $4.7 million, up from $2.1 million in pcp. Net debt stood at $14.2 million in H1FY21, down from $19.6 million as at 30 June 2020. Current ratio for H1FY21 stood at 0.79x. Debt to equity ratio for H1FY21 stood at 0.32x, down from 0.41x in H1FY20.

Debt to Equity Ratio Trend (Source: Analysis by kalkine Group)

• Outlook: Looking ahead, the company is focused on securing and improving returns in sectors that are expected to perform strongly. With ongoing tender opportunities for renewable energy projects and new windfarm projects, leaner business, improved operations, and less debt, the company seems well placed to achieve growth in the long run.

SWOT Analysis: 

Stock Recommendation:

• The stock has provided a return of 14.28% in the last three months and is currently trading higher than the average 52-week price level band of $0.094 and $0.190.
• On a TTM basis, the stock is trading at a price to book multiple of 0.6x, down from the industry average of 1.6x, demonstrating that the stock might be undervalued.
• In H2FY21, the company plans to invest a further $7 million to upgrade assets, taking capital expenditure for FY21 to $10 million.
• Key Risks: COVID-19 Uncertainties, Foreign Currency Risks, Stiff Competition.
• Considering the company’s decent performance in H1FY21, tender pipeline of opportunities, decent outlook, valuation on TTM basis, and associated key risks, we give a “Speculative Buy” rating on the stock at the closing price of $0.160 as on 9 July 2021.

BOL Daily Technical Chart, Data Source: REFINITIV

2. Parkway Minerals NL (Recommendation: Speculative Buy, Market Cap: ~$24.88 million)

Improved Bottom Line in H1FY21: Parkway Minerals NL (ASX: PWN) is involved in the commercialisation of world-class technology portfolio to provide long-term sustainable solutions.

• For H1FY21, the company reported total income of $1.19 million, up from $17.99k in H1FY20. Net profit after tax for H1FY21 stood at $377,229 up from the loss of $1.3 million in H1FY20. During the March quarter, the company made substantial progress in leveraging proprietary process technology platform to support existing and emerging business development initiatives.
• Cash and Debt Scenario: As at 31 December 2020, the company had cash and cash equivalent of $2.62 million, up from $2 million as at 30 June 2020. Further, the company had nil debt in its balance sheet. Current ratio for H1FY21 stood at 19.99x, up from 5.76x in H1FY20.

Current Ratio Trend (Source: Analysis by kalkine Group) 

• Outlook: With the recent launch of PPS and several other initiatives, the company seems well to leverage its rapidly growing conventional water treatment capabilities, to deliver next-generation solutions. In the coming months, the company expects its product range to expand significantly.

SWOT Analysis:

Stock Recommendation:

• The stock has corrected by 30.55% in the last three months and is trading lower than the average 52-week price level band of $0.006 and $0.032, offering a decent opportunity for accumulation.
• Looking ahead, the company expects its new business unit, PPS, to support the delivery of highly differentiated and integrated water treatment related solutions.
• Key Risk: COVID-19 Uncertainties, Technology Disruption, Foreign Currency Risk, etc.
• Considering the company’s decent operational progress in the commercialisation of its technology, launch of PPS, rise in H1FY21 bottom line, current trading level, and associated key risks, we give a “Speculative Buy” rating on the stock at the closing price of $0.0125, down by -3.847% as on 9 July 2021.

PWN Daily Technical Chart, Data Source: REFINITIV 

3. Vortiv Limited ( Recommendation: Speculative Buy, Market Cap: ~$5.62 million)

Decent Performance by TSI India During FY21: Vortiv Limited (ASX: VOR) is a technology-based company that holds a 24.89% interest in TSI India. TSI India is mainly involved in providing payment solutions for utilities, telcos and insurance companies. 

• During the majority of FY21 (year ended 31 March 2021), VOR was involved in the operation of Decipher Works Pty Ltd (DWX) and Cloudten Industries Pty Ltd (“C10”). However, in December 2020, it sold 100% of the shares of both the companies and incurred a profit of $9.7 million on the sale. During the year, DWX & C10 delivered $10.2 million in revenue and $1.2 million in profit before tax. TSI India reported total revenue of $48.7 million for FY21, up 4% on the previous year. Further, it reported Underlying EBITDA of $10.58 million, up 473% on the previous year.
• Cash and Debt Scenario: As at 31 March 2021, the company had cash and cash equivalent of $22.7 million. Further, it had nil debt in its balance sheet. Current ratio for FY21 stood at 2.84x, up from 1.14x in FY20.

Current Ratio Trend (Source: Analysis by Kalkine Group)

• Outlook: Looking ahead, the company is focussed on seeking acquisition opportunities and pursuing to progress a transaction or transactions as quickly as possible. TSI India intends to strengthen its position as Banking Infrastructure and Transaction Processing provider and expects to become a payment bank over the next 5 to 7 years.

SWOT Analysis: 

Stock Recommendation:

• The stock has provided a return of 3.7% in the past three months and is inclined towards its 52-weeks low price of $0.037, offering a decent opportunity for accumulation.
• On a TTM basis, the stock is trading at a Price to Book multiple of 0.3x, lower than the industry median of 5.3x, demonstrating that the stock might be undervalued.
• Key Risk: Regulatory Risks, Foreign Currency Risks, Technology Disruption.
• Considering the improved performance by TSI India, current trading level, valuation on TTM basis, and associated key risks, we give a “Speculative Buy” rating on the stock at the closing price of $0.040 as on 9 July 2021.

VOR Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on 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 uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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