Kalkine has a fully transformed New Avatar.
Kelsian Group Limited
KLS Details
Change of Company Name: Kelsian Group Limited (ASX: KLS) provides transport and tourism services. As announced on 5 November 2021, the company has changed its name to Kelsian Group Limited from SeaLink Travel Group Limited following the approval of shareholders at the Annual General Meeting 2021 held on 26 October 2021.
FY21 Financial & Operational Summary:
Revenue & EBITDA (Source: Analysis by Kalkine Group)
Key Risks:
Outlook:
Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: During FY21, KLS declared a fully franked final dividend of 9.0 cents per share, which took the total dividend for FY21 to 16.0 cents per share. The stock of KLS is trading below its 52-weeks’ low-high average of $5.890 - $10.640, respectively. The stock has been corrected by ~14.93% and ~29.69% in the past one and three months, respectively. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers’ median EV/Sales multiple, considering the COVID-19 uncertainties and inefficiency in generating profits, etc. For the purpose of valuation, peers such as Aurizon Holdings Ltd (ASX: AZJ), Qube Holdings Ltd (ASX: QUB), Alliance Aviation Services Ltd (ASX: AQZ) have been considered. Considering the indicative upside in valuation, growth in revenue, strengthened asset base and balance sheet, new contracts, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $6.240, as on 02 December 2021, 12:20 PM (GMT+10), Sydney, Eastern Australia.
KLS Daily Technical Chart, Data Source: REFINITIV
Decmil Group Limited
DCG Details
New Infrastructure Contracts: Decmil Group Limited (ASX: DCG) mainly provides services such as designing, engineering, construction and maintenance to the infrastructure, resources, energy and construction sectors in Australia. As announced on 10 November 2021, the company won two infrastructure contracts of ~$40 million, which comprised of ~$32 million with Main Roads Western Australia and ~$8 million with Queensland Department of Transport and Main Roads.
FY21 Financial and Operational Highlights:
Revenue & EBITDA (Source: Analysis by Kalkine Group)
Key Risk:
Outlook:
Stock Recommendation: The stock of DCG is trading at par to its 52-week low level of $0.310, offering a decent opportunity for accumulation. The stock has been corrected by ~4.61% and ~15.06% in the past one and three months, respectively. On a TTM basis, DCG has an EV/Sales multiple of 0.3x, compared to the industry average (Construction & Engineering) of 9.3x. Thus, it can be said that the stock is undervalued at the current trading levels. Considering valuation on a TTM basis, new infrastructure contracts, improving earnings, decent liquidity position, decent outlook, current trading level and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.310, down by ~1.588% as on 02 December 2021.
DCG Daily Technical Chart, Data Source: REFINITIV
Fluence Corporation Limited
FLC Details
First Volume Contract in China: Fluence Corporation Limited (ASX: FLC) provides innovative, cost-effective decentralized water, wastewater, and reuse solutions for businesses and communities globally. Recently, the company won its first volume contract of US$2.15 million for packaged plants to treat wastewater from new volume partner Yangzhou Yijian Group Co. LTD. The order is likely to address the urgent phase 1 needs of the Housing and Urban/Rural Development Bureau of Sihong County to deploy a solution before year-end.
Q3FY21 Financial and Operational Highlights.
Revenue Trend (Source: Analysis by Kalkine Group)
Key Risks:
Outlook:
Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: The stock of FLC is trading at par to its 52-week low level of $0.155, offering a decent opportunity for accumulation. The stock has been corrected by ~11.11% and ~17.94% in the past one and three months, respectively. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers’ average EV/Sales multiple, considering the COVID-19 uncertainties and high debt to equity ratio, etc. For the purpose of valuation, peers such as Amaero International Ltd (ASX: 3DA), Zicom Group Ltd (ASX: ZGL), and Amaero International Ltd (ASX: 3DA) have been considered. Considering the expected upside in valuation, first volume contract in China, rising quarterly revenue, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.155, down by ~3.126% as on 2 December 2021.
FLC Daily Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.