MFF Capital Investments Limited 

MFF Details

Latest Update on NTA: MFF Capital Investments Limited (ASX: MFF) is engaged in the investment in a minimum of approximately 20 exchange listed international and Australian companies. Its primary objective in managing capital and investments is to seek to maximize returns for shareholders by identifying and investing in an investment portfolio of listed international and Australian companies. MFF has announced on 5 July 2021 regarding its latest Net Tangible Assets (NTA) per share value. The company stated that its weekly NTA per share stood at $3.34 pre-tax as of 2 July 2021, up from $3.28 as on 30 June 2021. The post-tax NTA per share stood at $2.846 as of 2 July 2021. 

Change in Director’s Interest: MFF has announced on 4 June 2021 regarding a change in the Director’s indirect interest in the company. The Director, Chris Mackay has acquired an additional 85,142 shares at the price range of $2.72-$2.73 per share.  

1HFY21 Financial Highlights:  

• Decline in Net investment Income (NII) - Due to lower dividend income and a decline in value of investments, MFF has registered a decline in NII in 1HFY21.
• Controlled Operating Expenses – MFF has registered profits to $23.13mn in 1HFY21 due to controlled expenses and lower income tax.
• Decline in Cash Balance– Cash Balance has declined significantly to $60.44mn as on 31 December 2020 against $680.13mn as on 30 June 2020. The total liabilities increased to $190.50mn as on 31 December 2020 against $183.46mn as on 30 June 2020.

Net Investment Income trend (Source: Analysis by Kalkine Group)

Key Risks: The company requires regulatory approvals to operate its business efficiently. Therefore, any regulatory interventions may impact the business. In addition, adverse currency movements may pose a severe risk and may impact the financials of the company. 

Outlook:  MFF is positive on near term outlook. The US Government 10-year bond yields 1.47% per annum at the end of June 2021 quarter, down from 1.7% pa at the start of the June 2021 quarter. Declining US bond yields indicate a positive sentiment and market prices, going forward.

Stock Recommendation: The stock of MFF gave a return of ~6.95% in the last one month and a return of ~9.36% in the last three months. The current market capitalisation of MFF stands at ~$1.65bn as of 8 July 2021. The stock is currently trading above the average 52-weeks’ price level range of ~$2.50-~$2.93. On the technical analysis front, the stock has a support level of ~$2.70 and a resistance of ~$3.15. Considering a volatile trend of net investment income since 1HFY19 till 1HFY21, declining profits in 1HFY21, decent stock price movement in the past few months, and current trading levels, we suggest investors to book profit and give a “Sell” rating on the stock at the current market price of $2.92, (as on July 8, 2021, 10.41 AM (GMT+10), Sydney, Eastern Australia).

MFF Daily Technical Chart, Data Source: REFINITIV 

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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