1. A-Cap Energy Limited (Recommendation: Speculative Buy, Market Cap: ~$149.38 million)

A-Cap Energy Limited (ASX: ACB) is an Australian resources company focused on the exploration and acquisition of nickel-cobalt projects to supply cathode materials to the global EV battery industry.

September 2021 Quarter Highlights: During the quarter, the company completed 256 reverse circulation (RC) drill holes at the Wilconi Ni-Co Project. The company also commenced flora/fauna and groundwater studies as part of the on-going PFS work baseline. For the quarter, the company reported operating cash outflow of $268k.

Cash and Debt Scenario: As at 30 Jun 2021, the company had cash and cash equivalent of $3.58 million, up from $280,531 as at 30 June 2020. Further, the company had total interest-bearing liabilities of $13.75 million. At the end of September 2021 quarter, the company had cash and cash equivalent of $1.56 million.

Cash Trend (Source: Analysis by Kalkine Group)

Outlook: The timeline to production from the company’s 100% owned Letlhakane Uranium Project is in line with the forecast that is supported by an increase in uranium demand and prices. The company is planning for the next phase of metallurgical studies and testwork at the Wilconi Co-Ni Project in Western Australia.

SWOT Analysis:

Stock Recommendation:

• Over the last three months, the stock has provided a return of ~+22.7%.
• The stock has 52-week low and high price of $0.028 - $0.190.
• Key Risks: Exploration-related Risk, Commodity Price Risk, COVID-19 Uncertainties, etc.
• Considering the company’s decent exploration results, ongoing exploration programs, modest outlook, robust balance sheet, and key associated risks, we give a “Speculative Buy” rating on the stock at the closing price of $0.135, up by ~3.846% as on 24 December 2021.

ACB Weekly Technical Chart, Data Source: REFINITIV

2. SenSen Networks Limited (Recommendation: Speculative Buy, Market Cap: ~$89.70 million)

SenSen Networks Limited (ASX: SNS) is a leading Sensor AI Data enterprise that offers customised, real-time and batch processing of data alongside SaaS solutions.

Q1FY22 Result Highlights: For Q1FY22, the company recorded record customer cash receipts of $1.9 million, up 18% over the last quarter. Over the quarter, the company accelerated its innovations throughout the pandemic and its IP Vault now has more than 60 entries making up 14 different patent families. Net cash used in operating activities stood at $1.8 million for the quarter as SenSen continues to invest in sales and marketing initiatives and R&D to drive topline growth.

Cash and Debt Scenario: As at 30 September 2021, the company had cash and cash equivalents of $2.9 million and unused finance facilities available of $1.8 million.

Current Ratio (Source: Analysis by Kalkine Group)

Outlook: Looking ahead, the company is focused on growing the use of SenSen’s Smart Surveillance analytics software from 10,000+ cameras to 100,000+ cameras in 2-3 years. The company recently won Digital Curbside Management Contract with TfNSW, from which it is expected to earn ~A$437K ex GST over the period of the initial contract, commencing in December 2021. For FY22, the company expects its total revenue of around $11 million.

SWOT Analysis:

Stock Recommendation:

• Over the last three months, the stock has provided a return of ~+16.0%.
• The stock has a 52-week high and low price of $0.250 and $0.105.
• On a TTM basis, the stock is trading at an EV/Sales multiple of 13.6x, lower than the industry (Software and IT Services) average of 74.8x.
• Key Risks: Foreign Currency Risk, COVID-19 Uncertainties, Technology Disruption, etc.
• Considering the company’s decent Q1FY22 performance, recently won contracts, modest outlook, valuation on TTM basis, and key risks associated with the business, we give a “Speculative Buy” rating on the stock at the current market price of $0.140 as on 24 December 2021, 12:30 PM (GMT+10), Sydney, Eastern Australia.

SNS Weekly Technical Chart, Data Source: REFINITIV

3. Cellnet Group Limited (Recommendation: Speculative Buy, Market Cap: ~$19.00 million)

Cellnet Group Limited (ASX: CLT) is a leading distributor of lifestyle technology products with operations across Australia and New Zealand.

Q1FY22 Result Highlights: For Q1FY22, CLT reported a net profit before tax of $286,000, despite the challenging operating conditions from ongoing lockdown restrictions across Australia and New Zealand. Due to increased online sales at higher margins, the company’s trading margins improved 330 basis points year-on-year. The company’s online sales in the first quarter increased 47% on pcp, with increased revenue on direct sites.

Cash and Debt Scenario: As of 30 June 2021, the company had robust balance sheet with $7.0 million cash at bank. Further, the company had total interest-bearing loans and borrowings of $8.36 million lease liabilities of $481k.

Current Ratio Trend (Source: Analysis by Kalkine Group)

Outlook: In Q2FY22, the company expects the ANZ retail restrictions to ease during the period, ahead of the company’s peak trading period.The company is optimistic about its growth ahead with decent momentum from the new iPhone launch and pent-up consumer demand for new gaming consoles. 

SWOT Analysis:

Stock Recommendation:

• Over the last three months, the stock has provided a return of ~+50.94%.
• The stock is currently trading lower than the average 52-week price level band of $0.052- $0.175.
• On a TTM basis, the stock is trading at a price to book value multiple of 0.6x, lower than the industry (consumer cyclicals) median of 2.4x.
• Key Risks: COVID-19 Uncertainties, Stiff Competition, Technology Disruption, etc.
• Considering the rising online sales, resilient performance in Q1FY22, modest outlook, current trading level, valuation on TTM basis, key associated risk, we give a “Speculative Buy’ rating on the stock at the closing price of $0.08, up by 2.564% as on 24 December 2021.

CLT Weekly 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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