Syrah Resources Limited

Completed Purchase of Battery Anode Material (BAM) Site: Syrah Resources Limited’s (ASX: SYR) stock climbed up 2.929 per cent on August 20, 2018 following the announcement of successful commissioning of the attrition cells for the fines graphite circuit which are fully operational. As per the release, the initial assessment is exhibiting significant improvement in fines graphite fixed carbon levels, which enables improvements in both quality and recovery. The planned production of higher fixed carbon graphite product of 96%-98% will be driven by increasing customer demand. As a result, the group expects the development of a price premium for higher carbon content products. We expect that the group continues to production improvement plan focused on stable plant flows, increased plant utilization, recovery rates, and process control governance at the Balama operations.

On the other hand, the SYR’s stock remains the most shorted share on ASX as per the ASIC report of 14 August 2018. It is indicative of over 20.59% of short position. The company has recently downgraded its 2018 production target range of 135,000 to 145,000 tonnes from 160,000 tonnes and as a result, C1 cash operating cost is now forecasted to be US$430 to US$450 per tonnes from earlier US$ 400 per tonnes. Moreover, Credit Suisse Holdings (Australia) Limited ceased to be the substantial holder of the Group since 13 August 2018. Meanwhile, the share price has fallen 29.71 per cent in the past three months as at August 17, 2018 and traded at the 52-week low level of $2.360. Hence, we maintain our “Hold” recommendation on the stock at the current market price of $2.460, considering foregoing developments.
 

JB Hi-Fi Limited

Acquisition of Additional Shares by One of its Director: JB Hi-Fi Limited (ASX: JBH) disclosed to ASX that one of its directors, Ms. Beth Laughton had a direct interest in the Company and acquired 1,500 ordinary shares via on-market purchase for the total consideration of $37,977.73. Recently, the group delivered a decent set of the full-year result in which the company recorded NPAT of $233.2 Mn which is only approximately 1 per cent short of the bottom end of the original guidance ($235 Mn). Meanwhile, the stock price is up by 11.28% in the past three months and trading close to 52-week higher level ($29.470). The stock experienced a short interest of more than 18.05 per cent (as per the ASIC report of 14 August 2018). Hence, we maintain our “Expensive” recommendation on the stock at the current market price of $ 26.210.
 

Orocobre Limited

Advantage Lithium Released Study on Cauchari JV: Joint Venture partners Orocobre (ASX: ORE) and Advantage Lithium Corp. continue to unlock shareholder value in the Olaroz-Cauchari Basin, which is one of the hottest lithium regions in the world. Following this, ORE informed the market that Advantage Lithium has released a study in accordance with Canadian standards on the Cauchari Lithium project to the TSXV. As per the release, the study is based on low level technical and economic assessments that are not enough to support the estimation of ore reserve. Moreover, Advantage Lithium is continuing to conduct drilling activity with the objective of upgrading the Cauchari Inferred Resource to a higher category (Indicated or Measured Resource) which will provide the basis for a Feasibility Study planned for completion in the first half of next calendar year.

Meanwhile, the group is under the short-selling radar with over 15.84% short positions (as per the ASIC report of 14 August 2018). In the past six months, the stock price fell by 39.11 per cent as at August 17, 2018 and is trading above its 52-week low levels ($3.048).  Hence, we maintain our “Buy” recommendation on the stock at the current market price of $ 4.140 by looking at its improving fundamentals and ongoing developments along with the outlook for the lithium market.

 
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