Stocks’ Details
 

The Food Revolution Group Limited

Strong Demand for Hand Sanitiser Products: The Food Revolution Group Limited (ASX: FOD) operates state-of-the-art fruit and vegetable processing facilities and sells its own branded products and as ingredients to other food producers. The company recently started delivering its hand sanitiser products to the market. These products are receiving strong demand from the major supermarket chains. The company intends to market its hand sanitiser product under the “Care Touch” brand owned by its distribution partner Careline Pty Ltd, reserving the “Sanicare” brand for its new range of disinfectants.

Improving Top-line and bottom-line: For the half-year ended 31 December 2019 or H1FY20, the company reported revenue from ordinary activities of $17.96 million, up 19% on the previous corresponding period (PCP). For the same time span, the company reported a loss of $1,78 million, as compared to the loss of $3.44 million in PCP, demonstrating an improvement of 48%.


Half year Results Summary (Source: Company Reports)

Outlook: Food Revolution Group is planning to start production of an all-purpose disinfectant under the Sanicare brand at its Mill Park Factory which shall be used on counters, toilets, office and reception desks, railings or even laptops or mobile phones. The company expects big demand for this product and believes that it has the capacity to produce this product in large quantities.

Stock Recommendation: In the last six months, FOD’s stock has provided a return of 21.67% to its shareholders. The stock is currently inclined towards its 52-week low of $0.055, providing investors a decent opportunity for accumulation. Considering the company’s current position in the market of hand sanitiser products, its future plans for ethanol-based Sanicare product, expected demand for sanicare product, decent revenue growth, current trading levels, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.073 on 18 March 2020. 
 

First Graphene Limited

 
Precautionary Measures taken amidst Coronavirus Outbreak: First Graphene Limited (ASX: FGR) has an established 100 tonne/year graphene production capacity and is involved in supplying of high-performing, graphene products at competitive prices. On 18 March 2020, the company provided an update on Covid-19 or Coronavirus, wherein it assured that it has been taking precautionary measures to reduce the risk of spreading the virus to the staff and clients. In Australia, the company is continuing to run its Henderson facility and is dealing with customers via telephone and video conference. In the UK, the company has closed its non-essential research laboratories and the staff has taken IT equipments to work remotely. The company will continue to have access to the teams for desk studies, literature searches, etc. In Sri Lanka, the government has declared a 3-day bank holiday, to stop the virus from spreading, however, the staff continues to work remotely for the foreseeable future. 
 
Excellent Performance by PureGRAPH® enhanced products in Trials: The company recently provided an update on the status of the ArmourGRAPH™ bucket liner provided by newGen to a major Pilbara iron ore producer wherein it highlighted that bucket liner shows no signs of advanced wear or scalloping as would normally be experienced with the liners currently used in the industry after 24 weeks of use. At the same Pilbara mine site, the client has installed a second ArmourGRAPH™ bucket liner.
 
During the December quarter, the company continues to witness growth in engagements in the UK, Europe, Asia and Australia markets, mainly due to the marketing efforts and the release of the Company’s B2B focussed website.

Engaged Prospects & Customers per Region (Source: Company’s Report)

Strong Revenue Growth: For the half year ending 31 December 2019, the company reported revenue from ordinary activities of $82,831, representing an improvement of 979% on pcp. Over the period, the company maintained a strong working capital position, with the early exercise of options raising $5.6 million up to 8 August 2019, driving the growth of First Graphene with increased production efficiencies and higher manufacturing throughput.
 
Future Plans: Going forward, the company expects further ArmourGRAPH™ liners to be installed with other newGen clients. The company believes that it has the capacity to deliver high volumes of high-quality graphene to users when they adopt graphene into their products.
 
Stock Recommendation: The company has been making strong investments in research and development of graphene products as it looks to expand its client base and the range of materials in which it is involved. The stock is currently trading at its 52 weeks low price of $0.092. For H1FY20, the company has a current ratio of 6.8x which is higher than the previous half, demonstrating the company has improved its ability to pay short term debts. Considering the uncertainty around Covid-19 impacts, the company’s future plans and its current trading levels, we advise investors to closely watch the stock at the current market price of A$0.092 per share, down 6.122% on 18th March 2020.

Core Lithium Ltd

Strong Metallurgy Results from Finniss Lithium Project: Core Lithium Ltd (ASX: CXO) is an advanced Australian lithium developer that is involved in the development of Finniss Lithium Project, located just south of Darwin Port in the Northern Territory.  Recently, the company conducted a testwork on representative bulk samples of spodumene pegmatite core recently drilled from the BP33 deposit within the Finniss Lithium Project and received strong metallurgy results from it with exceptional concentrate quality produced at high recovery. These new results underpin previous test work results in regard to producing exceptional quality lithium concentrate at better lithium grades, lower iron content, at higher recovery and at a larger crush size. The results are summarized in below table:


Result of Testwork (Source: Company Reports)

Gold prospects identified at Adelaide River Project: Via a review of historic data, the company recently identified various advanced gold prospects at Core’s new Adelaide River Gold Project which is located in the Pine Creek Orogen of the Northern Territory. The gold mineralisation at this Project is hosted in gold vein systems which are similar to those at the nearby Cosmo gold mine.

Future Plans: While the company is still firmly focussed on the development of the Finniss Lithium Project, it is also looking forward to extend its NT exploration program to cover Adelaide River over the course of 2020.

Stock Recommendation: The company has inked an offtake and prepayment agreement and is now preparing for further agreements with some of Asia’s largest lithium consumers and producers. CXO’s stock is currently trading close its 52-week low of $0.020, providing investors a decent opportunity for accumulation. Considering, the company’s recent progress in the development of Finniss Lithium Project, gold prospects identified at Adelaide River Project, its future plans and current trading levels, we are giving a “Speculative Buy” recommendation on the stock at a market price of $0.022, down by 4.348% on 18 March 2020. 


Comparative Price Chart (Source: Thomson Reuters)

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