92 Energy Limited (ASX: 92E)

Incorporated in 2020, 92E was listed on ASX 6^th April 2021 by raising AUD 7.00 million through IPO. 92E is engaged in exploration of uranium in the Athabasca Basin, Saskatchewan, Canada and have projects namely Tower, Clover and Gemini. Its market capitalization stood at AUD 50.61 million as of 18^th October 2021, at the stock price of AUD 0.745 per share.

Financial and Operational Updates: On 18^th October 92E announced appointment of Mr. Kanan Sarioglu as Vice President of Exploration and Mr. Steve Blower as a Director of the company along with the consultant in technical capacity. As per the announcement dated 7^th October 2021, Ellerston Capital Limited changed its substantial shareholding from 6.17% to 7.27%. On 28^th September 2021, 92E completed its capital raising of ~AUD 7.15 million via placement of 9,927,750 shares at a price of AUD 0.72 per share through institutional, sophisticated, and professional investors. The company come out with the first functional year results after its incorporation in 2020 with the release of FY21 annual report on 30^th September 2021. It had reported a Total Comprehensive Loss of ~AUD 2.73 million in FY21 versus ~AUD 11.24k in FY20. Cash at the end of FY21 was reported as ~AUD 5.81 million as of 30^th June 2021. It remained on a trading halt from 24^th September 2021 until 28^th September 2021 due to capital raising plans. After its maiden drilling program at Gemini Uranium Project in July, the company has found positive assay results of existence of uranium mineralization at 5.5m of 0.12% U3O8 on the fourth drill hole of inaugural drilling its Gemini Project as per the announcement on 20^th September 2021.

Technical Analysis: On the daily chart, 92E price broke out the downward sloping trendline resistance at AUD 0.73 level on October 18, 2021. Moreover, the prices are trading above the trend-following indicator 50-period SMA, indicating a bullish momentum. The leading indicator RSI (14-period) is trading at ~57.51 level indicating bullish momentum.

92E is heading towards discovery of uranium, considering its strategic appointments, capital raising and current price levels, hence the investors with a high-risk appetite can consider it for a ‘Speculative Buy’ position, keeping the support and resistance levels as crucial points. The stock was analysed as per the current price of AUD 0.745 per share, 12:21 PM (GMT+10), Sydney, Eastern Australia, as of 18^th October 2021. However, the risk levels are high depending on its performance and utilisation of its capital raise.

Daily Technical Chart – 92E

Source: REFINITIV

Charter Hall Long WALE REIT (ASX: CLW)

Holding a portfolio valuation of AUD 5.6 billion and 468 number of properties, CLW is a REIT fund investing in core real estate sectors and managing a portfolio leased for long-term to government, corporate, multinational, and national blue-chip tenants. It holds a market capitalization of AUD 3.09 billion as of 18^th October 2021, at the stock price of AUD 4.860 per share.

Financial & Operational Updates – As per the announcement dated 23^rd September 2021, it has declared interim dividend of AUD 0.076 per share to its shareholders, payable on 15^th of November 2021. With an aim of partnering with high corporate and government tenants, CLW acquired Toyota Material Handling Australia on September 24, 2021, for a total price of AUD 21 million. In a release on September 20, 2021, CLW has entered into a Scheme Implementation Deed with Host-Plus Pty Ltd to acquire all the stapled securities of ALE Property Group (LEP) alongside with two industrial properties for a total purchase price of ~AUD 67 million. As per Appendix 4E and Full Year Financial Report released on 9^th August 2021, CLW showed a ~22% Y-o-Y increase in Revenue from ordinary activities to reach ~AUD 154.60 million for FY21 as against AUD 126.67 million in FY20. Its Net Profit after Tax increased ~405% Y-o-Y from ~AUD 122.41 million in FY20 to ~AUD 618.31 million in FY21. Cash at the end of FY21 was reported as ~AUD 76.97 million as of 30^th June 2021 versus ~AUD 38.42 million in PcP. CLW has seen a 3.7% CAGR growth p.a. in Distribution per share since its IPO and expects a ~4.5% growth for its FY22 (forecast). It currently has 4.77% of Weighted Average Capitalisation Rate (WACR) and holds 48% in Triple Net Leases (NNN) category where the tenants hold all the costs related to outgoings, maintenance and capex. On 20^th July 2021, it entered into a leasing agreement with a company under the FUJIFILM Holdings Corporation Group which will positively impact the valuation of the property under talk - Bowen Hills.

Technical Analysis: CLW's prices started to correct downside after making a new 52-week high of AUD 5.380 in September 2021. Currently, the prices are trading below trend-following indicators 21-period SMA and 50-period SMA on a daily chart, which might act as a crucial resistance zone for the stock. The leading indicator RSI (14-period) is moving towards an oversold zone and trading at ~37.239 levels, indicating a negative stance. The important support level for the stock is placed at AUD 4.32 while the key resistance level is at AUD 5.38.

Despite of good performance in FY21, after considering its current price levels and RSI levels, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing market price of AUD 4.860 per share, down by ~1.420% as of 18th October 2021.

Daily Technical Chart – CLW

Source: REFINITIV

AVA Risk Group Limited (ASX: AVA)

Incorporated in 1994, AVA is an Australian company engaged in risk management services and technology services. Its market capitalization as of 18^th October 2021 stood at AUD 115.46 million and the share price stood at AUD 0.47 per share. It offers multiple segments:

• Intrusion detection and location for perimeters, pipelines by using Future Fibre Technologies (FFT),
• Data networks, biometrics, card access control and locking by using BQT,
• Armoured vehicle collection and delivery at origin and destination, secure storage, commercial and chartered air and sea freight and customs brokerage services through its AVA Global Logistics.

Financial and Operational Updates: As per the release of Full Year Statutory Report on 30^th August 2021, it showed a ~41% Y-o-Y increase in Revenue and other income to reach ~AUD 65.0 million for FY21 as against AUD 46.13 million in FY20. Its Net Profit after Tax increased from ~AUD 4.94 million in FY20 to ~AUD 13.74 million in FY21. Cash at the end of FY21 was reported as ~AUD 17.29 million as of 30^th June 2021 versus ~AUD 7.70 million in PcP. On 17^th August 2021, divestment of services division - AVA Global Logistics, contributing 62% of total revenue and 48% of EBITDA 2021 of the group – was announced. It was intended to sell the division to TTG Bidco Limited for ~AUD 63.1 million and and expected to realize net cash proceeds equal to ~AUD 42.4 million. The transaction is expected to be completed by the end of October 2021. After the divestment, AVA is supposed to hold ~AUD 57.9 million of cash in total with no material debt. Further the company decided to follow certain capital management strategies to give back to its shareholders:

• Capital return of total ~AUD 39.2 million (~0.16 cents per share)
• On-Market Buy-Back of ~AUD 1.0 million

Technical Analysis: AVA stock prices are continuously consolidating in the range of AUD 0.45 to AUD 0.495 range from the past 2 months. Prices are trading above the rising trend line support level. Moreover, the price is trading above its 50-period simple moving average, which may act as a crucial support zone at lower end in short term. The momentum oscillator RSI (14-period) is trading at ~49.32 level. Important support level for the stock, is placed at AUD 0.425 while the key resistance level is placed at AUD 0.525.

As mentioned above, selling of a segment contributing ~62% of group’s revenue (to be completed by the end of October 2021), is a major event to watch for investors. The risk attached in investing in the scrip should be taken in consideration with a cautious approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.470 per share, as of 18^th October 2021.

Daily Technical Chart – AVA

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 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.

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