Renu Energy Limited (ASX: RNE)

RNE is an incubator with investments in renewable energy and clean energy space. It acquires stakes and nurture companies and unlocks values by selling through IPOs and trade sale. It holds investments in hydrogen, energy storage, Energy as a Service, and Waste-to-Energy sectors. RNE holds a market capitalization of $17.91 million as of March 8, 2022.

Financial and Operational Highlights: As announced on March 7, 2022, RNE’s recently acquired Contrywide Renewable Hydrogen Limited is advancing on its three domestic green hydrogen projects with land and project partner agreements. It is also identified a fourth project in Brisbane for producing hydrogen using waste resources. RNE’s investee company, Allegro Energy, is in early-stage discussions with renowned companies in Australia, the EU, and the US for its electrolyte-based supercapacitors that prove cost-effective as compared to lithium-ion batteries. It is also developing utility-scale Redox Flow Batteries for use in Frequency Control Ancillary Services and Fast Frequency Response. Further, its Energy as a Service (EaaS) provider, Ensol Australia Pty Limited is expanding with contracts from new retailers.

In H1FY22, RNE posted a 96% drop in revenue to $17.17k as compared to $397.1k in H1FY21 mainly due to the absence of an R&D tax grants received in the previous year. In addition, the company posted one-off gains from discontinued operations during H1FY21 which resulted in increasing net loss from $349.06k in H1FY21 to net loss of $1.09 million in H1FY22. It had closed the period with a cash balance of $2.6 million as of December 31, 2021.

On February 18, 2022, RNE completed the Share Purchase Plan (SPP) with proceeds totalling $1.246 million. This was after it had raised $2.376 million from supplicated investors on December 6, 2021. About 13.85 million shares will be issued under the SPP at the issue price of $0.09 per share.

Technical Analysis: After the prices hit its 52-week high level of AUD 0.155 in November 2021, RNE prices declined sharply from thereon. Prices are now taking support of the golden Fibonacci supply zone i.e. 138.6% on a monthly chart that further indicates prices might reverse from key support levels. RSI (14-period) is hovering at oversold region at ~31 that further indicates buying might initiate at key supporting levels. Immediate support levels are AUD 0.050 and AUD 0.040 while key resistance levels are AUD 0.065 and AUD 0.070.

Considering the traction in hydrogen green projects, development plans in utility-scale energy storage projects, recent fundraising through SPP, investors with a high-risk appetite might consider a ‘Speculative Buy’ position. The stock was analysed as per the closing market price of AUD 0.052 as of 8 March 2022. However, the risk levels are high on the back of delay in project execution and widening losses.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Daily Technical Chart – RNE

Source: REFINITIV

Calidus Resources Limited (ASX: CAI)

CAI is a gold exploration and development company with its flagship Warrawoona Gold Project, located in the East Pilbara district. CAI holds a market capitalization of $316.20 million as of March 8, 2022.

Financial and Operational Highlights: CAI’s 50% owned Pirra Lithium has identified a lithium pegmatite with a mapped strike length of over 1km about 50km south-west of Marble Bar in the East Pilbara region. The company was placed under trading halt with on March 7, 2022, and subsequently lifted post the update on Pirra Lithium project. Effective from March 21, 2022, CAI will be removed from S&P/ASX All Ordinaries Index.

As announced on February 28, 2022, CAI to start crushing and milling operations at its 100% owned Warrawoona Gold Project in eight weeks period and the first gold poured is expected in two weeks later. The project cost is expected to be in line with the budget. It is targeting 200k tonnes on operational start-up.

For Q2FY22, CAI posted operating cash outflows of $28.2 million with nil cash receipts from customers and substantial costs towards the development of mines. It had borrowed about $28 million that helped to close the period with a cash balance of $20.61 million as of December 31, 2021. Besides, it had $27.5 million available under debt facilities.

Technical Analysis: CAI moved up significantly after the prices reached to its 52-week high level of AUD 0.88 recently. However, the prices are now getting resistance of the upward sloping trend line further indicating profit booking occurs at resistance levels. The momentum oscillator RSI (14-period) is trading at ~68 level on a weekly chart and is trading around the overbought zone and forming a negative divergence, indicating a bearish momentum for short-term.

Considering the operating cash outflows, stiff resistance and trading near overbought zone, removal from the index, investing in this stock at such uncertain levels should be taken with a calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.820 per share, up by ~3.80%, as of 8 March 2022.  

Daily Technical Chart – CAI

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 analysis has been achieved and is subject to the factors discussed above alongside support levels provided.

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.

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

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