Vicinity Centres (ASX: VCX)

VCX is retail property group in Australia, having retail assets under management of worth AUD 22 billion with ~61 shopping centres. As on 26th November 2021, the market capitalization of the company stood at ~AUD 8.21 billion.

Financial & Operational Updates – As per the quarterly update on 10^th November 2021, VCX updated:

• Their portfolio strengthened with the 50% acquisition of harbour Town premium Outlets Gold Coast (against AUD 358 million) and selling of 50% in Runaway Bay Centre.
• Centre visitation average increased after re-opening in October 2021 after four months of lockdown at NSW (from 49% in 2019 to 82%) and VIC (from 48% in 2019 to 93%)
• The total retail portfolio sales were down by 25.7% for 1QFY22 versus 1QFY20, while VIC retail sales for 1QFY22 outperformed 1QFY21.
• Despite the COVID-19, Spent per visit increased by 20% in FY21 and 30% in 1QFY22.
• Gross rental billings collection was slowed due to COVID-19 and averaged out as ~74% for 1QFY22.

As per the Annual Year Report released on 18^th August 2021, total income was reported as ~AUD 1,169.2 million in FY21 versus ~AUD 1,216.3 million in FY20. It decreased its Net Losses after Taxes from ~AUD 1,801 million in FY20 to ~AUD 258 million for FY21. It closed its FY21 with a cash balance of ~AUD 47.20 million at the end of 30^th June 2021 versus ~AUD 227.4 million at the end of 30^th June 2020.  

Technical Analysis: VCX’s price has been trading above an upward sloping trend line and gained ~13.02% in the last six months. Currently, the prices are facing stiff resistance of AUD 1.83 at higher levels, indicating the possibility of a downside correction. The momentum oscillator RSI (14-period) is placed at ~62.111, however, making a negative divergence with the price action, supporting a possible downside correction in the near term.

Considering its slowdown in Gross Rental Collection due to COVID-19 and negative divergence formed in RSI levels, we suggest investors to “Sell” this stock and book profit at the current market price of AUD 1.810 per share as of 26^th November 2021, 10:30 AM (GMT+10), Sydney, Eastern Australia.

Daily Technical Chart – VCX

Source: REFINITIV

Note, purple color line at the bottom of the chart depicts RSI (14-day period) and yellow color line is the trendline.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings.

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