New Hope Corporation Limited (ASX: NHC)

Incorporated in 1986, NHC is a diversified energy company, having a focus on exploration, development, processing and marketing of coal, oil and gas. Its market capitalization stood at AUD 1.63 billion as of 9^th November 2021.

Financial & Operational Updates – On 8^th November 2021, L1 Capital Pty Ltd has changed its substantial shareholding from ~6.40% to ~7.79%. On 26^th October 2021, NHC paid a fully franked dividend of AU 7.00 cents (total AU 11.00 cents for the full year). The conversion price of Convertible Notes due 2026 has been changed from AUD 2.10 to AUD 2.0412. As per the Annual Report FY21 published on 15^th October 2021, a production of 9.6 Mt of saleable coal was recorded versus 11.3 Mt in FY20, thereby reporting a decrease of ~3% in statutory revenues to ~AUD 1.04 billion in FY21. It converted its Statutory Net Losses of ~AUD 156.78 million in FY20 into Statutory Net Profit of ~AUD 79.35 million for FY21. NHC posted a 27% growth in Underlying EBITDA, reaching AUD 367 million. Cash and cash equivalents reported as ~AUD 424.66 million as of 31^st July 2021 versus ~AUD 70.37 million as of 31^st July 2020. Its Total Recordable Injury Frequency Rate (TRIFR) reduced by ~11%.

Technical Analysis: After witnessing a short-term rally till AUD 2.700 in May 2021, NHC’s prices entered the correction phase. Prices recently started to move upside after taking the support at AUD 1.850 level and indicating the possibility of a positive movement hereon. Prices are trading above the trend-following indicator 50-period SMA, and the momentum oscillator RSI (14-period) is also started to recover from the lower levels, further supporting a positive bias. An important support level for the stock is placed at AUD 1.600 while the key resistance is at AUD 2.550 level.

NHC’s improved profitability with the decent cash balance suggests investors with a high-risk appetite a ‘Speculative Buy’ stance along with incorporating the support and resistance as one of the tools while analysing the investment opportunity. The stock was analysed as per the closing price of AUD 2.020, up by ~2.798%, as of 9^th November 2021. However, the risk levels are extremely high in view of the prospective findings, its development and related saleability.

Weekly Technical Chart – NHC

Source: REFINITIV

Althea Group Holdings Limited (ASX: AGH)

Found in 2018, AGH is involved in selling and distribution of cannabis in Australia and the UK. In addition, the company operates cannabis extraction facility in Canada. Its market capitalization stood at AUD 78.21 million as of 9^th November 2021.

Financial and Operational Updates: As per the Quarterly Report FY22 published on 19^th October 2021, the company recorded highest record quarterly receipts of AUD 4.5 million in 1QFY22 from customers, increasing ~116% Y-o-Y from 1QFY21 and ~57% from 4QFY21 (Q-o-Q). AGH successfully raised ~AUD 10.6 million (before costs) to invest in strategic growth and global expansion plans. Annualised operating expenses reduced by ~AUD 1 million during 1QFY22, owing to reduction in the headcount and plans to cut down more of staff costs to ~AUD 250k per quarter. Cash and cash equivalents status at the end of 30^th September 2021 was ~AUD 12.73 million versus as ~AUD 6.76 million at the end of 30^th June 2021. The Net Losses reported for the FY21 was ~AUD 15.04 million as compared to ~AUD 14.76 million in FY20, whereas the revenue from continuing activities double folded from ~AUD 5.06 million in FY20 to ~AUD 11.54 million in FY21. On 2^nd September 2021, Regal Funds Management Pty Ltd (RFM) became substantial shareholder by owning ~7.48% voting power in AGH.

Technical Analysis: On a weekly chart, though AGH’s price is trading below the trend-following indicators 21-period SMA and 50-period SMA but has reversed from its support level placed as 52-week low at ~AUD 0.230. Moreover, the momentum oscillator RSI (14-period) at ~37.669 level is forming a positive divergence, which might indicate the possibility of an expected uptrend movement for short-term. The important for the support levels stock is placed at AUD 0.230 while resistance level is at AUD 0.305.

With the recording of highest quarterly receipts from customers and ongoing cost reduction plans, the investors with a high-risk appetite can consider it as a ‘Speculative Buy’ stance, keeping the support and resistance levels as crucial points. The stock was analysed as per the current market price of AUD 0.255 per share, 12:40 PM (GMT+10), Sydney, Eastern Australia, as of 9th November 2021. However, the risk levels are high considering the sustenance and efficiency of its production capacity.

Weekly Technical Chart – AGH

Source: REFINITIV

Audalia Resources Limited (ASX: ACP)

ACP is a mineral exploration company which was incorporated in 2010, owning a Medcalf Vanadium/Titanium project in nickel-producing region - Lake Johnston of Western Australia. Its market capitalization stood at AUD 8.99 million as of 9^th November 2021.

Financial and Operational Updates: As per the announcement on 29^th October 2021, in order to manage its working capital requirements, ACP has negotiated to access an additional loan of AUD 1.00 million (at 5% p.a. interest rate) from a Director – Mr. Siew Swan Ong. As per the quarterly activities report released on 29^th October 2021, after considering nil cash receipts from customers in 1QFY22, cash balance at the end of 30^th September 2021 was reported at ~AUD 0.103 million versus ~AUD 0.071 million at the end of 30^th June 2021. As per the Annual Report released on 30^th September 2021, the interest income dropped from ~AUD 3.145k in FY20 to ~AUD 0.28k in FY21. It had recorded net loss after tax of ~AUD 0.61 million for FY21 as against ~AUD 0.73 million in FY20. 

Technical Analysis: On the weekly chart, after hitting the 52-week high at AUD 0.075 in April 2021, ACP’s prices are consolidating in a range between AUD 0.009 to AUD 0.037. Its CMP is trading below the trend-following indicators 21-period SMA and 50-period SMA, acting as resistance zone. However, the momentum oscillator RSI (14-period) is trading at (~42.956 level), that indicates the price is losing momentum. An important support level for the stock is placed at AUD 0.012, while the key resistance is at AUD 0.014.

A ‘Watch’ stance is suggested after considering the nil cash receipts from customers in Q1FY22 and the current price levels of the scrip. The stock was analysed as per the closing price of AUD 0.013 per share, as of 9^th November 2021.

Weekly Technical Chart – ACP

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.

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.