Imagion Biosystems Limited

IBX Details

1HFY21 Key Financial Highlights: Imagion Biosystems Limited (ASX: IBX) is present in the business of R&D of medical imaging technology through its wholly-owned subsidiary, Imagion Biosystems Inc.

• Rise in Top-line: In 1HFY21, the company reported revenue and other income of $168,643, up from $117,093 reported in the year-ago period.
• Reported Loss After Income Tax: During the period, the company reported a loss of $1.45 million, compared to a loss of $1.74 million in 1HFY20. The decline in losses was primarily due to reduction in R&D expenditure.
• Clinical Study: The company has also reported the first patient enrolment into the Phase I Study of its novel MagSense® technology for detecting and staging HER2 metastatic breast cancer.
• Receiving of Grant: In 1HFY21, IBX commenced research for prostate cancer imaging supported by CSIRO funds. The company received $50,000 grant, which is used to assist a preclinical research project at Monash University.
• Collaboration with Patrys Limited: The company also collaborated with Patrys Limited, with the aim of research into the use of Patrys antibody with Imagion MagSense® nanoparticles for the improvement in brain tumor imaging and diagnostics.
• R&D Tax Incentives: In 1HFY21, the company received $2.6 million in R&D tax incentives in regard to R&D activities in 2020, compared to $2.2 million received in the prior year.
• Liquidity Position: The company’s cash balance stood at $13.9 million at the end of June 2021, up from $13.2 million at December 2021.

Cash Highlight (Source: Analysis by Kallkine Group)

Key Risks: IBX is exposed to risks related to prudent regulatory approvals. Also, COVID-19 led uncertainties, pricing pressure, forex headwinds, and stiff competition adds to the woes.

Outlook: The company expects to increase its spending in the coming period, owing to successful results from its first in- human-trial related to HER2 breast cancer.  IBX remains on track to carry out various R&D projects into 2022.

Stock Recommendation: The stock of the company has been corrected by ~33.91% in the past three months. Currently, the stock has a 52-week high and low level of $0.225 and $0.064, respectively. On a TTM basis, the stock of IBX is trading at a P/BV multiple of 6.1x, lower than the industry average (Healthcare Equipment & Supplies) of 8.4x, implying undervaluation. Considering the current trading levels, valuation on TTM Basis, enrolment of patients into the Phase 1 study, receipt of R&D tax-incentives, and key risks pertaining to the business, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.074, down by ~2.632% as on 26 August 2021

IBX Daily Technical Chart, Data Source: REFINITIV 

Aeon Metals Limited 

AML Details

Business Update: An Australian-based mineral exploration company, Aeon Metals Limited (ASX: AML), owns a 100% stake in the Walford Creek Polymetallic Project, situated in north-west Queensland. It offers Copper, Cobalt, Gold, Lead Zinc, Molybdenum, and Silver.

• The company’s flagship Walford Creek Project is set to produce copper, cobalt, zinc, silver, and nickel, for low carbon future.
• Also, the ongoing drilling program is expected to expand and upgrade Walford Creek Mineral Resource Estimates in early CY2022.

Completion of Deal:

• The company recently completed a deal with OL Master Limited, major shareholder and lender of AML, to extend the maturity date on its existing loan facility by 24 months to 17 December 2023.
• In this regard, the company has consented to an additional fee equal to 2% of the total existing loan facility size.
• The loan facility will aid AML to enhance shareholder’s value via the development of the Walford Creek Copper and its improved focus on regional exploration.

Share Repurchase Program:

• On 23 August 2021, the company informed the market that it has raised $705,000 via the SPP which was announced earlier on 19 July 2021.
• This marks a wider capital raising program declared by AML, which includes the 2-tranche placement of $9.5 million.
• The company issued 12,155,210 new fully paid ordinary shares at an issue price of $0.058 per Share. Proceeds from the placement will be utilised for the ongoing Pre-Feasibility Study activities on the Walford Creek Cu/Co Project, infill resource drilling at Walford Creek, and activities per tainting to the latest regional copper exploration general working capital.

Cash Balance; Analysis by Kalkine Group

Key Risks: The company is exposed to interest rate risk, credit risk, equity price risk, and liquidity risk. In addition, the fluctuation in commodity prices could impact the company’s financial condition. 

Outlook: The potential to considerably grow Mineral Resources at Walford Creek, combined with the solid projected economics bolstered by the current Mineral Resources and revised flowsheet, has resulted in renewed optimism and improved confidence in the company’s future.

Stock Recommendation: Recently, the company appointed Mr Jeff Botting as its Project Manager for the Walford Creek Project. The stock of the company generated a negative return of ~31.25% in the past three months and is currently trading towards its 52-week lower level of $0.054. The stock of AML is trading at a price to book multiple of 0.7x, lower than the industry median (Metals & Mining) of 2.7x on TTM basis, thus seems undervalued. Hence, considering the aforesaid facts, renewed optimism and improving poise in AML’s future, capital raising program, valuation on TTM basis, current trading levels, and key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.055, as on 26 August 2021.

AML Daily Technical Chart, Data Source: REFINITIV 

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.

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.

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