Stocks’ Details

Greenland Minerals Limited

Completion of Capital Raising: Greenland Minerals Limited (ASX: GGG) is engaged in the multi-element mineral exploration. The market capitalisation of the company stood at $375.29 million as on 4^th February 2021. During the quarter ended December 2020 (Q4FY20), the key application documents for an exploitation (mining) license for the Kvanefjeld Rare Earth Project has met the Greenland Guidelines for public consultation, and the consultation phase commenced on 18^th December 2020 for a 12-week period. The company raised $34 million through a share placement to international and domestic institutional investors and a Share Purchase Plan (SPP) to shareholders. As a result of the capital raising, the company is in a decent position to execute outstanding pre-development work programs in parallel to complete project permitting and advancing commercial development. The net cash outflow from operating and investing activities stood at $354k and $980k, respectively.

Cash Flow (Source: Company Reports)

Outlook: For 2021, the company’s focus areas revolve around project permitting, technical work programs to convert all aspects of the Kvanefjeld Project to DFS level, and commercial engagement with a strong focus on European industry.

Stock Recommendation: As on 31^st December 2020, the cash and cash equivalents of the company stood at $36.44 million. In the past six and nine months, the stock of GGG has moved up by 20.45% and 130.43%, respectively. As a result, the stock is trading above its 52-week low-high average of $0.211. In addition, the stock is trading at a price to book value multiple of 3.9x against the industry median (Basic Materials) of 3.0x on TTM basis. Thus, it seems that the stock is overvalued at the current trading levels. On the technical analysis front, the stock has a support level of ~$0.229 and a resistance level of ~$0.310. Therefore, considering the aforesaid facts, steep price movement in the past months and current trading level, we are of the view that most of the positive factors have been discounted at current juncture and give an “Expensive” rating on the stock at the current market price of $0.270, down 3.572 on 4^th February 2021. We further suggest investors to wait for a better entry-level.

MMA Offshore Limited

Consolidation of Shares: MMA Offshore Limited (ASX: MRM) provides a diverse range of marine-related services to major oil and gas exploration and production companies. On 27^th January 2021, the company announced the consolidation of its securities in 10:1 ratio. After the consolidation, the company would have 359,330,216 shares on issue. Previously, the company has won two new contracts for its Multi-Purpose Support Vessel the “MMA Privilege, wherein, the first contract is for the provision of accommodation and walk-to-work services to support FPSO shutdown operations in Côte d'Ivoire, West Africa and the second contract is for the provision of light construction and accommodation/walk-to-work services in Brunei. In the month of December 2020, the company successfully finished equity raising and raised $80 million, and the company would use these funds to prepay and repay existing debt. For the year ended 30^th June 2020, the company recorded revenue amounting to $273.0 million, reflecting a rise of 14.1% over pcp and underlying EBITDA for the year increased by ~76% to $48.9 million. In addition, the company successfully integrated and restructured the subsea business.

Key Financials (Source: Company Reports)

Outlook: The company expects that its long-term production support contracts are likely to underpin revenue growth in FY21. However, the company is expecting the impact of COVID-19 in FY21 results.

Stock Details: The company closed FY20 with an increased cash balance of $86.6 million. The 52-week low-high range for the stock stands at $0.236 - $1.055, respectively. The stock closed at $0.340 on 4^th February 2021.

Wide Open Agriculture Ltd

Decent Growth in Revenue: Wide Open Agriculture Ltd (ASX: WOA) is a regenerative food and agriculture company. The market capitalisation of the company stood at $80.32 million as on 4^th February 2021. Recently, the company has inked a research services agreement with Curtin University to conduct early-stage product development using food-grade lupin protein and has secured Stuart Johnson. During the quarter ended 31^st December 2020 (Q2 FY21), the company recorded revenue growth of 29% to $989,261 over Q1 FY21. This proved as a sixth consecutive quarter of revenue growth. In addition, this also reflects a rise of 239% over the previous year sales for the corresponding period and highlights the consistent demand from its fast-growing customer base seeking regenerative, ethical food and beverages. In the month of October 2020, WOA successfully raised A$7.0 million (before costs) from a number of existing shareholders, which include European impact-investment family office, along with multiple new institutional and high net-worth investors.

Revenue Growth (Source: Company Reports)

Outlook: During 2021, the company would continue to consolidate and grow local market share in WA and launch OatUP into new states and territories across Australia. In addition, the company anticipates an increase in online traffic from sales and marketing activities.

Stock Recommendation: At the end of December 2020 quarter, the company had a cash balance of A$14.3 million. WOA possesses enough funds to continue its current activities during uncertain times and will continue to demonstrate appropriate fiscal restraint. The stock of WOA has corrected 9.14% and 12.65% in the last one and three months, respectively. The 52-week low-high range for the stock stands at $0.090 - $1.850, respectively. On the technical analysis front, the stock has a support level of ~$0.354 and a resistance level of ~$1.211. Hence, considering decent revenue growth, encouraging outlook, sufficient funds to explore future activities and key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.775 per share, up by 1.973% on 4^th February 2021.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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