Revasum Inc (ASX: RVS)

RVS was incorporated in 2016, deals into manufacturing of Chemical Mechanical Planarization (CMP) grinding and substrate manufacturing equipment which are used in the production of semi-conductor devices. Based in United States, its market capitalization stood at AUD 47.53 million as of October 7, 2021.

Financial & Operational Updates – As per the Half Year Report released on 25^th August 2021, revenue from ordinary activities was down by ~29.22% Y-o-Y reported as ~USD 4.61 million in 1HFY21 versus ~USD 6.52 million in 1HFY20, excluding a sales backlog of ~USD 10 million to be confirmed at the end of 1HFY21. The decrease in the revenue is due to decline in no. of shipments from 7 units in 1HFY20 to 3 units in 1HFY20. A substantial decrease of ~70.4% in Operating Losses was reported as ~USD 2.40 million for 1HFY21, due to a decrease of ~48.6% in operating expenses largely led by absence of impairment charge of ~USD 3.0 million incurred in 1HFY20. Loss from ordinary activities after tax for 1HFY21 was reported as ~USD 0.24 million, a decrease of ~97.02% Y-o-Y, versus net loss of ~USD 8.31 million in 1HFY20. Cash as of 4^th July 2021 was reported as ~USD 6.13 million versus ~USD 1.36 million in PcP.

Other Updates: On 28^th September 2021, Mr. Kevin Landis was appointed as Non- Executive Chairman. As per the news released on September 13, 2021, RVS appointed Rebecca Shooter-Dodd as President and CEO effective immediately.

Technical Analysis:  On the weekly chart, its prices are trading below the horizontal trendline resistance zone and continuously facing the resistance of the same at AUD 0.57 level. Moreover, the momentum oscillator RSI (14-period) is trading near an overbought zone at (~67.994 level), which indicates the possibility of rebound in the stock from the current levels. However, prices are trading above 21-period SMA and 50-period which may act as a crucial support level for the stock. An important support level for the stock, is placed at AUD 0.45 while the key resistance level is placed at AUD 0.57. The stock price breached previous resistance level

The financial performance improvement of RVS’ First Half-Yearly 2021 results have been reflected in the price movement, as currently it is trading higher than the average 52-week price level band of AUD 0.167 and AUD 0.550 and has given ~68.75% returns in the last three months. Considering its support and resistance levels along with previously indicated levels, the company is trading on a higher side and hence, we suggest investors to book profits and give a ‘Sell’ rating on the stock at the current market price of AUD 0.550, as on 7^th October 2021, at 12:30 PM (GMT+10), Sydney, Eastern Australia.

Daily Technical Chart – RVS

Source: REFINITIV

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. 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 the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

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