RedFlow Limited

Production in focus:  In FY 2018, the total revenue from the operating activities of RedFlow Limited(ASX: RFX) increased significantly by 29% to $1.77 million compared to the prior corresponding period. The other income decreased by 5 percent to $2.11 million. The Net loss of the company reduced by 7 percent to $11.98 million. The Net tangible asset per security was $0.03 in FY 2018. The decrease in loss was mainly due to lower fixed costs for the year with the relocation of a manufacturing facility, higher sales with the delivery of the Company’s largest purchase order to date and continued spending on research and development. Diluted and basic loss per share decreased from 0.03 cents in FY 2017 to 0.02 cents in FY 2018. The net cash outflow from operating activities decreased from $13.39 million to $11.15 million in FY18 over last year.

During the start of September 2018, Redflow came out with the market update that the company’s factory was able to produce 78 zinc-bromine flow batteries in the prior month i.e. August 2018. The management reflected positive views in regard to work quality as well as lesser turnover of the company’s employees. However, the company also witnessed robust employee engagement. As per the management of Redflow, the company plans to increase the production level and is anticipating 150 batteries in the month of December. The management also plans to make the production to that level which meets up the requirements of the inventory as well as expected orders. This could help the company in managing the cash flows. The company has been focusing on the production of the quality batteries and later on to increase the levels so that the customer demand can be satisfied. However, it also targets to incur lower costs.


FY18 P&L Statement (Source- Company Reports)
The MACD indicator has been applied on the daily chart of RedFlow Limited using the default values. MACD line has crossed the signal line and is moving upward and this momentum is expected to continue. Moreover, the company’s management is optimistic about the production levels which might positively impact the company’s fundamentals. Thus, we maintain a “Hold” rating on the stock at the current market price of A$0.083.
 

1414 Degrees Limited

Revenues to Witness Positive Impacts: In FY 2018, the total revenue of 1414 Degrees Limited (ASX: 14D) increased from $2,745 in FY 2017 to $63,387 in FY 2018. The loss of the company increased from $954,335 to $5,484,860. The total current assets of the company increased from $2.09 million in FY 2017 to $3.81 million in FY 2018. The Net Cash outflow from operating activities increased from $243,383 in FY 2017 to $1,201,597 in FY 2018.  The company purchased $164,146 worth of property, plant and equipment in FY 2018. Besides this, the top management of 1414 Degrees Limited reflected positive views in regard to its technology. In the conference which was conducted in the US, the company saw higher participation from the markets on the global basis. The power companies showed interests in the company’s technology which might help it to increase the revenues moving forward. The advanced stage of development of TESS managed to attract the interests of the delegates in the conference.

 

FY18 P&L Statement (Source- Company Reports)

From technical standpoints, the exponential moving average or EMA indicator has been applied on the daily chart of 1414 Degrees Limited using the default values. The stock price has crossed the EMA and is moving downwards. However, the management expects strong demand of the TESS products which could help the company in improving the financials. As a result, we maintain “speculative buy” rating on the stock at the current market price of A$0.315.
 

Tag Pacific Limited

How Acquisition Could Help Tag Pacific Limited : In June 2018, Tag Pacific Limited (ASX: TAG)has made an announcement which states that it had acquired “Energy Made Clean”, a Carnegie Clean Energy Limited’s subsidiary. According to the management of Tag, the integration of energy made clean would be done with the Tag’s MPower business. As a result of the integration, the combined entity would have enhanced reach and scale, and these would be acting as the tailwinds. Moreover, the acquisition has been done amidst evolving power sector of Australia.
 

FY18 P&L Statement (Source- Company Reports)

MACD indicator has been applied on the daily chart of Tag Pacific Limited using the default values. As per the observation, MACD line has crossed the signal line and is moving downward. However, the MACD is turning upwards and a bullish crossover is expected. Thus, we have a wait and watch view on the stock at the current market price of A$0.063
 

Carnegie Clean Energy Limited

Substantial YoY growth in Topline: In FY 2018, the total revenue from operating activities of Carnegie Clean Energy Limited (ASX: CCE) increased by 202.97% over the prior corresponding period. The Net loss of the company increased by 445.5% to $64.08 million which was $14.38 million in the previous year. The basic and diluted loss per share of the company increased from $0.647 cents in FY 2017 to 2.388 cents in FY 2018. The total current assets of the company reduced from $24.33 million in FY 2017 to $14.28 million in FY 2018. The net cash outflow from operating activities increased from $9.14 million in FY17 to $15.16 million in FY 2018.

                FY18 P&L Statement (Source- Company Reports)
 
Understanding the Outlook of Energy Made Clean: As per the management of Carnegie, the subsidiary energy made clean is backed with the strong fundamentals which is evident with strong momentum witnessed in the turnover in H2 2018. Still, the business was not able to generate profits. The business would be able to experience profitability with the help of organic growth and latest acquisition indicated by Tag could help the business.

Technical Overview: A technical indicator named MACD (Moving Average Convergence Divergence) is applied on the daily chart of Carnegie Clean Energy Limited. As per the observation, the MACD line has crossed the signal line and is moving upwards. However, the organic growth is yet to be ascertained and therefore, the market participants need to watch the stock closely. CCE’s share traded at $0.010, down 9.091% on October 08, 2018. The company has been lately hit by investor dissatisfaction, resignation of CEO Michael Ottaviano, and assertions of misleading the market, while concerns on key projects have been on the rise. The group earlier this year raised $5.3 million through share purchase plan at 3 cents per share for its solar, battery and wave energy businesses.

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