Kalina Power Limited

KPO Details

This report is an updated version of the report published on the 21 April 2022 at 3:55 PM GMT.

Insights of 1HFY22: Kalina Power Limited (ASX: KPO) is a clean-tech company that is engaged in the deployment of the Kalina Cycle technology internationally and the management of its projects and investments. During 1HFY22, the company raised $9.940 million via an oversubscribed placement supported by a range of new institutional and sophisticated investors. KPO would primarily utilize the amount to advance Saddle Hills through to FNTP and for working capital requirements

Financial Summary (Source: Analysis by Kalkine Group)

Key Risks: The operational and financial performance of the company could be impacted by the rising market share of its peers. In addition, the business is exposed to a more complex regulatory environment; any failure in the compliances could lead the business to fines, penalties etc.

Outlook: KPO has scheduled detailed engineering and equipment procurement in Q1FY22- Q3FY22 for Saddle Hills Project. The construction for the same is likely to take place between Q4FY22 to Q1FY24, and KPO has planned the commercial operation of the project for Q2FY24.

Stock Recommendation: The stock of KPO is trading near its 52-week high level of $0.044. The stock has provided returns of ~28% in the past one month. The stock is trading at a P/BV multiple of 5.4x against the industry average (Utilities) of 4.1x on a TTM basis. Thus, it can be said that the stock is overvalued at the current trading levels. Considering the valuation on a TTM basis, solid rally in share price in the past months, current trading levels, volatility in the market, and key risks associated with the business, we advise investors to book profit and give a ‘Sell’ rating on the stock at the current market price of $0.035 as on 21 April 2022, 11:33 AM (GMT+10), Sydney, Eastern Australia.

KPO Daily Technical Chart, Data 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 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 analysis has been achieved and subject to the factors discussed above alongside support levels provided.

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