Stocks’ Details
 

Orocobre Limited

 
Update on COVID-19 impact: Orocobre Limited (ASX: ORE) is engaged in exploration & production of mineral with a focus on developing Lithium/Potash resources in Argentina. ORE recently updated the market on the COVID-19 impact and stated that in a bid to curb the transmission of COVID-19 virus, the government of Argentina has taken necessary measures and suspended  the movement of citizens and personnel as well as supplies within the country till 31 March 2020.
 
Update on Bid to Buy Advantage Lithium Corp: ORE had stated that it currently doesn’t own the approval of Advantage Lithium Corp’s shareholders for the acquisition of the entity. Advantage will have its special meeting on 14 April 2020 at which approval will be sought in order to finalise the transaction via a statutory plan of arrangement.
 
H1FY20 Key Financial Highlights for the Period ended 31 December 2019: The company reported a rise of 10% in the production of lithium carbonate to 6,679 tonnes. Revenue from Olaroz Lithium Facility stood at US$39.4 million, on sales of 6,395 tonnes of lithium carbonate. At the end 1HFY20, the company reported a cash balance of US$195 million.
 

1HFY20 Operational Highlights (Source: Company Reports)
 
Stock Recommendation: As per ASX, the stock of ORE is trading close to its 52-weeks’ low level of $1.835. As on 23 March 2020, the market capitalization of the company stood at $565.87 million, with outstanding shares of ~261.98 million. The stock is available at a P/E multiple of 24.94x. On the valuation front, the stock is trading at a price to book multiple of 0.6x as compared to the industry median of 1.0x on TTM (Trailing Twelve Months) basis. Hence, we recommend a “Hold” rating on the stock at the current market price of $2.03, down by 6.019% on 23 March 2020, owing to its recent update on COVID-19 impacts.
 

Bingo Industries Limited

 
BIN to Remain Strong in Medium-Term Amid COVID-19 Impact: Bingo Industries Limited (ASX: BIN) is engaged in recycling and waste management solutions, which includes waste collection, processing, separation and recycling components of the waste value chain.Recently, the company stated that Maria Atkinson, Director of the company, acquired 14,354ordinary shares for a consideration of $29,422.17.
 
Update on COVID-19 Impact: As a result of COVID-19 outbreak and worsening economic conditions, the company has withdrawn its FY20 earnings guidance. As a result of the measures, the company’s Commercial and Industrial (C&I) waste volumes are expected to be negatively impacted, with the highest effect in the commercial, retail, hospitality, leisure and shopping centre end markets.
 
1HFY20 Key Financial Highlights for the Period Ended 31st December 2019: During the period, BIN reported net revenue and underlying EBITDA, of $271.2 million and $82 million, repetitively. The figure represents an increase of 50.7% and 74.8%, year over year. During the period, the company reported operating free cash flow amounting to $70.4 million, up 49.1% year over year. EPS for the period stood at 5.8 cents, an increase of 132% year over year.
 

Key Financial Metrics (Source: Company Reports)
 
Outlook:  Going forward, the company aims to optimise its operations to maximise returns from assets and is targeting to achieve a cash conversion of 100%.
 
Valuation Methodology:P/BV Multiple Based Relative Valuation
 

P/BV Based Valuation (Source: Thomson Reuters)
 
Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months.
 
Stock Recommendation: The stock of the company generated a negative return of ~18% over a period of 6 months. The company reported solid growth in 1HFY20 but expressed slight dissatisfaction at the same time with respect to certain controls. Even with the current challenges from COVID-19, the company remains well positioned over the medium term to capitalise on the optimistic future regulatory and market tailwinds bolstering the business. We have valued the stock using P/B multiple based relative valuation method and arrived at a target price with lower double-digit upside (in percentage terms). For the said purposes, we have considered peers such as Cleanaway Waste Management Ltd (ASX: CWY), IPH Ltd (ASX: IPH) and Austal Ltd (ASX: ASB). Considering the robust performance in 1HFY20, strong balance sheet position, and current trading level, we recommend a “Speculative Buy” rating on the stock at the current market price of $1.82, down by 4.961% on 23 March 2020.
 

Webjet Limited

 
Shares of WEB Stays in Trading Halt: Webjet Limited (ASX: WEB) is engaged in providing a wide range of online travel booking services for flights, hotels, car hire, tours, to name few.On 23 March 2020, the shares of the company were placed on a voluntary suspension at the request of WEB as the release of an announcement regarding a proposed raising is awaited. It was also mentioned that the securities would remain suspended until the pending announcement is made to the market.
 
Other Recent Updates: Recently, the company announced that UBS Group AG and its related bodies corporate has become a shareholder of the company, with a voting power of 5.78%.
 
Withdrawal of FY20 Earnings Outlook due to COVID-19 Impact:   On 11 March 2020, the company withdrew its FY20 EBITDA guidance, owing to the uncertainty of the duration and impact Covid-19. With the rising spread of the disease outside of China, there has been a substantial increase in revocation of travel rates and a reduction in overall travel booking activity. Amid this uncertainty, WEB is taking cautious measures to lessen the impact of Covid-1, which includes cost control measures and minimising operating expenditure. This in turn is likely to save $10 million for the rest of FY20. 
 
1HFY20 Key Highlights for the Period Ended 31 December 2019: During the period, the company reported revenue of $217.8 million, up 24% year over year. The company reported underlying EBITDA of $86.3 million, an increase of 43% on pcp. Total TTV for the period came in at $2,334 million, up 25% year over year.
 

1HFY20 Financial Highlights (Source: Company Reports)
 
Stock Details: The stock of WEB has witnessed a decline of ~68.16% in the past six months. Over a period of one year, the stock reported negative returns of 74.65%. As per ASX, the stock has a PE multiple of 11.43x and an annual dividend yield of 5.98%. Pursuant to a pending announcement to be released, the stock remains on a trading halt, with trading expected to commence on release of the said update.
 
 

Flight Centre Travel Group Limited

 
Short-Term Suspension of FLT Shares due to COVID-19 Impact: Flight Centre Travel Group Limited (ASX: FLT) is primarily involved in travel retailing in the leisure and corporate travel sectors. On 23 March 2020, the shares of the company were placed on suspension as the release of an announcement regarding the impact of COVID-19 is awaited. The company has devised new strategies to fight the challenges imposed on the business and aims to implement cost reduction strategies to curb the impact in the medium-term. The company is also looking to tap a larger portion of the leisure market for businesses and people who are adversely affected.
 
FLT also withdrew its FY20 interim dividend of 40 cents per share, which was to be paid in April 2020. The company also executed a 50% pay-cut for FLT’s senior leaders, given the current uncertainty and the measures taken by the government to stop the spread of coronavirus.
 
Recent Update on Coronavirus Challenges: On 13 March 2020, the company stated that amid the uncertainty due to coronavirus outbreak it has withdrawn the guidance for FY20 PBT, which was earlier expected in the range of $240 million - $300 million. While the business is currently battling the challenges put forward by COVID-19, it however aims for both operational and financial stability in the long-term.
 
1HFY20 Key Highlights for the Period Ended 31 December 2019: During the period, the company reported revenues of $1,546 million, an increase of 5.8% year over year. Group TTV stood at $12,399 million, a rise of 11.2% year over year, on the back of robust growth across all regions. Underlying PBT, however, declined 26.9% year over year.
 

Key Highlights (Source: Company Reports)
 
Stock Details: The stock of the company corrected by ~74.65% over the past one month and around 77% in a year’s time. As on 23^rd March 2020, the stock has a P/E multiple of 4.97x and an annual dividend yield of 13.93%. Pursuant to the pending announcement to be released regarding the impact of the covid-19 on FLT’s business, the stock remains in a trading halt, with trading expected to commence on release of the said update.
 
 
 
Comparative Price Chart (Source: Thomson Reuters)

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