Magnis Energy Technologies Ltd

MNS Details

Implementation of MoU: Magnis Energy Technologies Ltd (ASX: MNS) is engaged in graphite and battery development. The market capitalisation of the company stood at ~$134.34 million as on 21^st December 2020. Recently, the company announced the implementation of Tripartite MoU by Magnis, The University of Newcastle and Fletcher International Exports for a pilot demonstration project to integrate a big battery into Dubbo processing facility. During September 2020 quarter, the company reported net cash outflow from operating activities of $1.29 million and inflow of $76k from investing activities. For the year ended 30^th June 2020, the company recorded a loss amounting to $7,378,601 as compared to $5,549,553 in FY19.

Cash Flow (Source: Company Reports)

Capital Raising: In the month of September 2020, the company finished a capital raising of $7.65 million through the placement of 45,000,000 shares at 17 cents per share. The company would be using these funds to achieve progress in all projects as well as for working capital purpose. 

Stock Recommendation: As on 30^th September 2020, the cash and cash equivalents of the company stood at $6.1 million. In the last six and nine months, the stock of MNS has surged by 160.56% and 224.56%, respectively. We have considered 14-day RSI, and it was observed that the stock is currently in the overbought zone and may witness some correction, going forward. On a technical analysis front, the stock has a support level of ~$0.159 and a resistance level of ~$0.235. Considering the price movement in the few months, current trading levels, and RSI level, we suggest investors to book profit and give a “Sell” rating on the stock at the current market price of $0.185 per share, down by 2.632% on 21^st December 2020.

MNS Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

RXP Services Limited

RXP Details

Acquisition Offer by Capgemini Australia: RXP Services Limited (ASX: RXP) provides information and Communication Technology professional services. The market capitalisation of the company stood at ~$92.61 million as on 21^st December 2020. On 11^th November 2020, the company updated the market about the scheme of Arrangement, wherein, Capgemini Australia has offered 100% acquisition proposal for $0.55 per RXP share in cash. The Board of the company unanimously advised the shareholders that they should vote in favour of the Scheme in the absence of a superior proposal. For FY20, the company recorded revenue amounting to $126.8 million, reflecting a fall of 10%. EBITDA for the year amounted to $14.0 million against $16.4 million in FY19.

Financial Summary (Source: Company Reports)

Outlook: For 1H FY21, the company anticipates EBITDA from continuing operations (pre AASB 16) to be in the range of $4.4 million to $4.9 million.

Stock Recommendation: The company ended FY20 with a healthy balance sheet supported by debt reduction, which led the net debt position to $4.0 million. The stock of RXP has moved up by 98.14% and 160.97% in the last six and nine months, respectively. As a result, the stock is inclined towards its 52-week high level of $0.560. We have considered 14-day RSI, and it was observed that the stock is currently in the overbought zone and may witness some correction going forward. On a technical analysis front, the stock has a support level of ~$0.245 and a resistance level of ~$0.601. Considering the steep returns in the past few months, current trading levels, and RSI level, we give a “Sell” rating on the stock at the current market price of $0.535 per share on 21^st December 2020.

RXP Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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