Incannex Healthcare Limited (ASX: IHL)

Incorporated in 2001, IHL is a clinical-stage pharmaceutical company, engaged in medicinal cannabis products and psychedelic medicine therapies. The current market capitalization as of 18^th November 2021 was reported at AUD 694.90 million.

Financial & Operational Updates – As per the Quarterly Update on 29^th October 2021, Phase II A of psilocybin-assisted therapy’s clinical trial got approval from Monash University Human Research Ethics Committee. FDA also approved the same in pre-IND (Investigational New Drug Application) meeting. To assess, IHL-675A soft gel capsules, it commenced its Phase I Clinical Trial in healthy volunteers. Its sales receipts for 1QFY22 were reported as Nil and closed the quarter with a cash balance of ~AUD 22.45 million at the end of 30^th September 2021 versus ~AUD 9.12 million at the end of 30^th June 2021. This was primarily led by inflows of AUD 15.85 million from exercise of stock options. On 20^th October 2021, to manufacture IHL-42X soft-gel capsules, IHL entered into an arrangement with Procaps S.A. – which has global exposure of 50 markets and 500 formulations. On 4^th October 2021, it had completed capital raise of AUD 17.66 million and later to which Mr Sudhanshu Agarwal became a substantial shareholder of 8.88%. As per the annual report FY21, released on 7^th September 2021, revenue from ordinary activities increased in triple-digit by ~213.7% Y-o-Y to ~AUD 1.90 million in FY21 while the net losses increased by ~73.8% Y-o-Y to AUD 8.16 million in FY21 on PcP basis, owing to the hike in Advertising & Promotion costs and research costs.

Technical Analysis: After making a low of AUD 0.110 in November 2020, IHL's prices witnessed a robust rally and recently made a new 52-week high of AUD 0.600. Currently, the prices trading above 21-period SMA and 50-period SMA, support a positive bias. However, the RSI (14-period) is moving downwards from an overbought zone, supporting a view of a downside correction in the stock. The immediate support level is at AUD 0.505, while the resistance level is AUD 0.600.

Since the scrip is trading at higher levels and after considering its increased losses in FY21, investing in this stock at current levels should be monitored as per the support levels, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.545 per share, down by ~5.218%, as of 18^th November 2021.

Weekly Technical Chart – IHL

Source: REFINITIV

Cirralto Limited (ASX: CRO)

It provides payment services, digital trading software, and integrated solutions, catering Business-to-Business (B2B) and Business-to-Customers (B2C). Its market capitalization stood at AUD 168.86 million as of 18^th November 2021.

Financial and Operational Updates 2021: On 15^th November 2021, it had announced that 6,600,000 ordinary shares will be released from voluntary escrow on 27^th November 2021. On 4^th November 2021, it completed its Greenshoots Technology Pty Ltd. On 1^st November, CRO signed a term sheet (to be commercialised in November FY22) with Tyler James Pty Ltd to provide AUD 2 million per month BNPL services through Master Card. As per the Quarterly Update on 26^th October 2021, it recorded ~157% increase in cash receipts for 1QFY22 were reported as ~AUD 396k along with an increase of ~41% revenue growth for 1QFY21 on QoQ basis. It completed the acquisition of Invigo Pty Ltd, a Sydney based fintech, while on the other hand it had commenced integration of Spenda (Mastercard Track Business Payment Services). CRO closed the quarter with a cash balance of ~AUD 18.97 million at the end of 30^th September 2021 versus ~AUD 21.38 million at the end of 30^th June 2021. As per the Annual Year Report released on 31^st August 2021, revenues from ordinary activities increased by ~157% Y-o-Y to AUD 0.87 million in FY21 versus 0.34 million in FY20. The net loss after tax increased substantially by ~53% Y-o-Y and reported as ~AUD 11.41 million in FY21 as against the net losses after tax of ~AUD 7.44 million for FY20.

Technical Analysis: CRO stock prices are trading below the falling trend line resistance level at AUD 0.061 on the weekly chart. Moreover, the prices are trading below the trend-following indicators 21-period SMA and 50-period SMA, which may act as a resistance zone. The momentum oscillator RSI (14-period) is trading at ~44.05 level, indicating lack of strength in the prices. An important for the support levels stock is placed at AUD 0.047 while resistance level is at AUD 0.062.

It is prudent to suggest the scrip as A ‘Watch’ stance after considering the reduction in profitability in FY21 and its indecisive movement in prices. The stock was analysed as per the closing price of AUD 0.055 per share, up by ~1.851%, as of 18^th November 2021.

Weekly Technical Chart – CRO

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 Yellow colour line reflects the Trendline, which shows whether the direction of the scrip is upwards or downwards.

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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.