Stocks’ Details
 

Aeon Metals Limited

Half Yearly Financial and Operational Performance: Aeon Metals Limited (ASX: AML) is engaged in the exploration of copper and cobalt. As on 13 March 2020, the market capitalisation of the company stood at $64.37 million. During 1H20, the company made progress towards Feasibility Study for the mining and processing of both the Copper Lode and Cobalt Peripheral Resources at Walford Creek. In the same time span, the company reported net assets of $66.3 million, including cash of $2.4 million.


1H20 Financial Highlights (Source: Company Reports)

Upgrade of Walford Creek Resource: The company has given an update on mineral resources for Walford Creek copper-cobalt Project, wherein it reported total Vardy & Marley Mineral Resources of 35.8mt @ 1.94% CuEq1 over 3.6km strike. AML also made a significant increase to Amy Mineral Resources and is expecting completion of Walford Creek PFS in 2Q CY2020.

Future Developments and Prospects: The company is prioritizing to advance the Walford Creek Project towards the development of a world-class base metals mine. AML plans to progress engagement with potential counterparties with respect to the Indicative Funding Proposals. 

Stock Recommendation: As per ASX, the stock of AML is trading very close to its 52-week low of $0.086, proffering a decent opportunity for accumulation. During 1H20, Return on Equity witnessed a substantial increase over the previous half, indicating that the company is capable of generating profits internally. In the same time span, current ratio of the company stood at 3.08x, higher than the industry median of 1.70x. On TTM basis, the stock is trading at a price to book value multiple of 0.9x, lower than the industry average (Basic Materials) of 2.4x. Considering the current trading levels, improvement in ROE and lower price to book value multiple, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.087, down by 8.421% on 13 March 2020.

Emerald Resources NL

Execution of Mining Contract for the Okvau Gold Project: Emerald Resources NL (ASX: EMR) is engaged in the exploration and evaluation of minerals. As on 13 March 2020, the market capitalization of the company stood at $144.47 million. The company has recently signed a Mining Contract with MACA Limited to supply earthmoving equipment and conduct contract mining services at the Okvau Gold Project. The scope of work includes site preparation, drill and blast, load and haul and maintenance works.

Operational and Financial Highlights: The company has recently released its half-year reports for the period ending 31 December 2019, wherein it reported probable ore reserve of 14.26 mt @1.98 g/t gold for 907koz contained. On the financial front, the company reported revenue of $91k and total current assets of $11.08 million.


1H20 Operational Highlights (Source: Company Reports)

Future Expectations and Prospects: The company is focused on exploration within its current portfolio of projects and will continue to assess other opportunities which may offer value-enhancing opportunities for shareholders.
Stock Recommendation: As per ASX, the stock of EMR gave a negative return of 19.15% in the past one month. During 1H20, the company witnessed a decline in gross and net margin over the previous half. In the same time span, current ratio of the company stood at 4.09x, higher than the industry median of 1.70x. Considering the returns, future prospects and new mining contract, we recommend our investors to keep an eye on the stock and give a watch stance at the current market price of $0.040, up by 5.263% on 13 March 2020, owing to its recent mining contract with MACA Limited. 

Jatenergy Limited

JAT achieves record monthly sales: Jatenergy Limited (ASX: JAT) is engaged in the origination, development and manufacture of a range of consumer products and sale of a client and in-house products, primarily in Australia and China. As on 13 March 2020, the market capitalization of the company stood at $37.38 million. The company has recently reported a material increase in its Neurio lactoferrin brands product orders, driven by the emergence of the Coronavirus in China. This resulted in the highest monthly revenue to date of $8.3 million.

The company has recently released its interim results for the period ending 31 December 2019, wherein it reported a marginal increase of 0.49% in revenue of $30.61 million and a loss of $2.03 million.


1H20 Financial Performance (Source: Company Reports)

What to Expect: The company is expected to see growth in its dairy products business for the second half of FY20. Upon the completion of the installation of new machines at ANMA, JAT expects to increase the margins earned and revenue from producing its own products from the manufacture of products for third parties. The company has confirmed orders of more than 660,000 units from March 2020 to the end of June 2020 and expects additional orders before June 2020.

Stock Recommendations: As per ASX, the stock of JAT is trading very close to its 52-weeks’ low level of $0.036, which is a good opportunity for the investors to enter the market. During 1H20, gross margin of the company witnessed an improvement over the previous half and stood at 24.8%, up from 16.7% in 2H19. In the same time span, EBITDA margin of the company stood at 3.2%. On the TTM basis, the stock is trading at an EV/Sales multiple of 0.9x, lower than the industry median (Consumer Non-Cyclicals) of 1.7x. Considering the current trading levels, improvement in gross margin, record monthly sales and lower EV/Sales multiple, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.039, down by 2.5% on 13 March 2020.
 
 
Comparative Price Chart (Source: Thomson Reuters)

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