Ambertech Limited

Ambertech Limited (ASX: AMO) is involved in distributing audio-visual solutions for all types of installation projects in Australia and New Zealand, which comprises professional broadcast, as well as media and communications; defence, law enforcement and security; live sound and production; musical instruments and sound recording; among others.

Financial and Operational Update: The company recently guided achieving revenue between $38-$40 million in the half-year ending 31 December 2021 (Dec 2020: $38.9 million). Further, the board expects EBIT to stay in the range of $3.2-$3.4 million during the period (Dec 2020: $3.8 million), and net profit before tax (NPBT) is forecasted to remain between $2.7-$2.9 million (Dec 2020: $3.2 million). Additionally, on 14 December 2021, the company mentioned that its forward and back-order books remain solid across all markets, after considering dealer-based run rate business and project deliveries. This provides further confidence well into the second half of the year. On the financial front, AMO delivered record full-year sales and NPAT in FY21 with revenue of $80.1 million up 36.5% and NPAT of $5.1 million, up 549.2%.

Technical Analysis

Weekly Price Chart

Note:  The purple color line in the chart depicts RSI (14-period), while the yellow color line represents the trend line. The sky-blue and red-color lines show 21-Period SMA and 50-Period SMA, respectively. The green-color histogram at the bottom of the charts represents weekly volumes.

On the weekly chart, AMO's prices are sustaining below an upward sloping trend line, indicating the possibility of a downward movement in the stock. On the weekly chart, the leading indicator RSI (14-period) is trading around mid-point and currently trading at ~51.58 levels. The trend-following indicator 50-period SMA is trading below CMP and supporting a positive bias; however, the 21-period SMA is sustaining above CMP, which may act as a resistance level for the stock. Now an immediate support level for the stock is placed at AUD 0.310 while resistance is at AUD 0.390 level.

Stock Recommendation

The shareholder newsletter for December 2021, released on 14 December 2021, highlighted that AMO is looking at the increasing contribution of its recent acquisitions to the business results in conjunction with its robust forward and back-order scenario. Driven by its recent capital raise, the company is better positioned to benefit from other opportunities for growth through agency and business acquisition. Therefore, considering the facts above and the current trading levels, we give a “Watch” recommendation on the stock at the closing market price of A$0.345, up 2.985% as of 20^th December 2021.

Halo Food Co. Limited

Halo Food Co. Limited (ASX: HLF) is engaged in the manufacturing and exporting formulated dairy products and health and wellness products. The company is a leading player in product development in Australia and New Zealand’s health and wellness sector in terms of product development and manufacturing.

Financial and Operational Update: On 12 November 2021, the company updated that it had bagged its second major Coles Private Label Tender by Coles Supermarkets. This contract has an annual sales forecast of $3.3 million, with production is likely to start during the first quarter of 2022, and the product in Coles stores is expected from the second quarter of 2022. HLF’s wholly-owned subsidiary Keytone Enterprises (NZ) Company Limited, on 10 November 2021 has entered into a $4o million strategic partnership with Theland New Cloud (Shanghai) Digimart Limited in China. On the financial front, the company has reported a robust sales growth of 14% YoY to $27.8 million in H1FY22. Further, normalised consolidated group EBITDA grew strongly by 223% to over $1.1 million in H1FY22 against a normalised loss of $0.9 million in the pcp.

Technical Analysis

Daily Price Chart

Note: The purple color line in the chart depicts RSI (14-period).

On the daily chart, HLF stock prices are hovering around the downward sloping trend line support zone and continuously taking support of same on the weekly chart. Moreover, the momentum oscillator RSI (14-period) is trading near an oversold zone at ~39.28 level, recovering from the lower levels. However, prices are trading below 21-period SMA, which may act as a resistance level for the stock. An important support level for the stock, is placed at AUD 0.10 while the key resistance level is placed at AUD 0.125.  

Stock Recommendation

The group is better positioned to capitalise on its strategic priorities in H2FY22. Further, coupled with starting fresh contract wins and a solid sales pipeline, the group is hopeful of a more robust result in H2FY22 against the record performance in H1FY22. Therefore, considering the facts above and the current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of A$0.1125 as of 20^th December 2021 (Time: 12:15 PM (GMT+10), Sydney, Australia).

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 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 analysis has been achieved and 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 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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