Retech Technology Co Ltd, (ASX; RTE)

RTE operates E-Learning platforms and E-Courseware platforms catered to large companies, government institutions, and training providers. As of January 10, 2021, RTE holds a market capitalization of AUD 58.22 million.

Financial and Operational Updates: During the quarter ending September 2021, RTE signed a new contract with the head office of Bank of Communications to provide online courseware production. It also forged an electronic courseware service agreement with the head office of the China Merchant Bank. It had realized cash receipts of RMB 65.18 million, representing an increase of 92% over the prior year. Net operating cash flow zoomed 480% to reach RMB 17.83 million. It had closed the period with a cash balance of RMB 232.44 million as of September 30, 2021.

Technical Analysis: On the daily chart, RTE prices are sustaining below the horizontal trend line resistance zone and facing the resistance of the same. The momentum oscillator RSI (14-period) is trading at ~51.62 level, indicating negative momentum in the stock. However, the prices are trading above the trend-following indicators 21-period and 50-period SMA, which may act as a support level for the stock.  The crucial support level for the stock is placed at AUD 0.26, while the key resistance is at AUD 0.305.

The stock of the company delivered returns of ~8.33% in over past nine months. Considering the risk related to increasing virus spread and the possibility of lockdowns, and current technical levels, we recommend investors to ‘Sell’ the stock at the current market price of AUD 0.280 as on 10^th January 2022, 11:32 AM (GMT+10), Sydney, Eastern Australia.

Daily Technical Chart – RTE

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.

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