Sayona Mining Limited

SYA Details

Strategic Partnership with Piedmont Lithium: Sayona Mining Limited (ASX: SYA) is engaged in the exploration and development of minerals. Recently, the company announced a strategic partnership with Piedmont Lithium “a leading U.S.-based lithium corporation”. This partnership would ramp up the development of Sayona’s lithium projects in Québec, Canada. As per the terms of the agreements, Piedmont would acquire an initial 9.9% equity interest in Sayona and two unsecured convertible notes for a total consideration of around US$7 million. In addition, this partnership reflects the quality of Québec assets and Sayona’s vision of creating a lithium hub in Abitibi. Previously, the company has wrapped up the acquisition of Tansim Lithium Project, Québec after a final payment of C$250,000 to Quebec Precious Metals Corporation for tenements subject to the option agreement.

Financial Highlights: During September 2020 quarter, the company continued to advance its lithium projects in Canada and Australia amid accelerating demand for the metal of the 21st century from the electric vehicle and battery storage industry. During the quarter, the company also agreed on placement with Battery Metals Capital Group LLC for raising up to US$2 million. For the year ended 30^th June 2020, the company reported revenue amounting to $60,429 as compared to $124,098 in FY19. Loss for the year amounted to $5,403,751 against $2,225,651 in FY19.

Key Financials (Source: Company Reports)

Outlook: With respect to Pilgangoora project, the company would retain the remaining project interest and the right to contribute to project evaluation and development in the foreseeable future to participate in the upside potential.

Stock Recommendation: As on 30^th September 2020, the cash and cash equivalents of the company stood at $3.18 million.  In the last three and six months, the stock of SYA has moved up by 110% and 133.33%, respectively. As a result, the stock is trading towards its 52-week high of $0.028.  In addition, we have considered 14-day RSI, and it was observed that the stock is currently in the overbought zone and may witness some correction, going forward. On a technical analysis front, the stock has a support level of ~$0.006 and a resistance level of ~$0.028. Hence, considering the returns on stocks, RSI levels, and current trading levels, we advise investors to book profit and give a “Sell” rating on the stock at the current market price of $0.023 per share, up by 64.285% on 11^th January 2021, owing to a partnership agreement with Piedmont Lithium.

SYA Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Vection Technologies Ltd

VR1 Details

Signing of MOU with Cisco: Vection Technologies Ltd (ASX: VR1) is a multinational software company that focuses on real-time technologies for industrial companies’ digital transformation. The market capitalisation of the company stood at ~$130.38 million as on 11^th January 2021. Recently, the company has rolled out an innovative Augmented, and Mixed reality (XR) interface for Computer Aided Design (CAD) software, which has been released with the latest Mindesk Suite 2021, during the most influential tech event in the world, the CES® 2021. On 16^th December 2020, the company announced the inking of the memorandum of understanding with Cisco Italy for the integration of Cisco’s collaboration platforms with Vection’s real-time Virtual and Augmented Reality (XR) technologies.

Financial Highlights: During Q1 FY21, the company recorded cash inflows from client activities of ~$0.5 million, which indicates a decent operational consolidation in a difficult business environment posed by COVID-19. In addition, the company managed to deliver a solid quarter, which is aligned with its overarching growth strategy towards the 50% ARR June 2022 objective. During FY20, the company recorded revenue amounting to ~$3.1 million and underlying EBITDA of $183k.

Key Financials (Source: Company Reports)

Outlook: Looking forward, the company would be focused on advancing its solutions across the healthcare, education and automotive sectors and entry into new verticals, including the defence industry.

Stock Recommendation: The company closed the Q1 FY21 with a cash balance of ~$8 million. The stock of VR1 has surged 218.18% and 723.52% in the last six and nine months, respectively. As a result, the stock is trading towards its 52-week high of $0.240.  On a TTM basis, the stock is trading at a price to book value multiple of 21.5x against the industry median of 5.9x. We have considered 14-day RSI, and it was observed that the stock is currently in the overbought zone and may witness some correction, going forward. On a technical analysis front, the stock has a support level of ~$0.105 and a resistance level of ~$0.153. Hence, considering the returns on stocks, higher valuation, RSI levels, and current trading levels, we advise investors to book profit and give a “Sell” rating on the stock at the current market price of $0.135 per share as on 11^th January 2021.

VR1 Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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