Decmil Group Limited

DCG Details

Consolidation of Securities: Decmil Group Limited (ASX: DCG) provides engineering construction services, predominantly for the infrastructure, transport, resources, and energy sectors. As on 10 November 2020, the market capitalisation of the company stood at ~$80.46 million. The company has recently announced the consolidation of its securities with a record date of 10 November 2020. Under the consolidation, the securities will be consolidated on a ratio of 10x on the basis that every fraction is rounded up to the next whole number and hence ~1,287,363,944 shares will be converted to ~128,736,394. The transaction is approved by security holders, FIRB, court, and ACCC. Trading of the post-consolidation securities will start from 11 November 2020 on a deferred settlement basis.

FY20 Financial Highlights: During FY20, revenue of the company stood at $451 million as compared to $551 million in the prior year. The decline was mainly due to a reduction in the number of new contract awards during the financial year. In the same time span, the company reported a net loss of $140.42 million, compared to a profit of $14.08 million in FY19. During the year, operating cash outflow of the company stood at $101.6 million, which was mainly attributable to margin erosion and delayed payments on disputed contracts, and the unwinding of advance payments on other projects.

FY20 Financial Highlights (Source: Company Reports)

Outlook: The company is focusing on various opportunities with a tender pipeline of $7-8 billion. The company seems to be in a position of future growth and sustainability. However, the COVID-19 pandemic had an impact on the Company's operations and the company might face further supply issues.

Stock Details: The stock of the DCG gave a return of 15.74% in the last three months. Currently, the stock is inclined towards its 52-week low price of $0.256. Based on the stock performance, consolidation of securities, and the FY20 financial highlights, we have kept a close eye on the upcoming events. The stock closed at $0.625, down by 10.715% on 10 November 2020.

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

Aeris Environmental Ltd

AEI Details

Quarterly Highlights (For the Period Ended 30 September 2020): Aeris Environmental Ltd (ASX: AEI) is engaged in the development and sale of products to eliminate biofilm growth in air conditioning systems and water treatment systems to enhance indoor air quality. As on 10 November 2020, the market capitalisation of the company stood at ~$106.72 million. During the quarter ended 30 September 2020, the company reported revenue of $2.92 million with an additional $1.1 million in orders for delivery in the months of October and November 2020. In the same time span, the branded products of AEI reported decent margins. During the quarter, the company reported positive operating cash flow with cash receipts of $4.75 million and a cash balance of $12.95 million.

Quarterly Statement of Cash Flows (Source: Company Reports)

Outlook: The opportunities for the company continues to strengthen, with each of its product portfolios demonstrating growth and market acceptance. The company is likely to witness large scale market opportunities covering several geographies.

Stock Recommendation: The company has been actively extending its market strategy and channels in China. The Annual General Meeting of the company will be held on 26 November 2020. As per ASX, the stock of AEI is inclined towards its 52-weeks’ low levels of $0.250, proffering a decent opportunity for the investors. The stock of AEI gave a negative return of 31.03% in the past three months and a negative return of 22.33% in the last one month. On a technical front, the stock has a support level of ~$0.357 and a resistance level of ~$0.499. Considering the current trading levels, extending market channels, modest long term outlook and decent financial performance, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.40, down by 9.091% on 10 November 2020.

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

Redflow Limited

RFX Details

Quarterly Update (For the Period Ended 30 September 2020): Redflow Limited (ASX: RFX) is engaged in the development, manufacturing, and sale of its zinc-bromine flowing electrolyte battery module. As on 10 November 2020, the market capitalisation of the company stood at ~$32.41 million. During the quarter ended 30 September 2020 (Q1 FY21), the company increased its customer value with the launch of new innovations. Despite the ongoing impacts from the COVID-19 pandemic, the company reported healthy sales and is exercising prudent cost management across all operations to ensure a scale up post the COVID-19 pandemic. During the quarter, the company reported a decline in cash receipts to $301k from $340k in Q1 FY2020. As at 30 September 2020, RFX had a cash balance of $7.4 million.

Consolidated Statement of Cash Flows (Source: Company Reports)

Outlook: The company is significantly progressing on its research and development initiatives and is focused on a strong set of opportunities across target markets. Over the medium term, the company is likely to expand into larger systems through a stack designed for high volume manufacturing.

Stock Recommendation: Despite the ongoing challenges experienced globally due to the impact of COVID-19, RFX has continued to make progress towards its operational objectives. As per ASX, the stock of RFX is inclined towards its 52-weeks’ low levels of $0.02, proffering a decent opportunity for the investors to enter the market. The stock of RFX gave a return of 12.5% in the past three months. On a technical front, the stock of RFX has a support level of ~$0.02 and a resistance level of ~$0.04. Considering the current trading levels, decent long-term outlook, and key investment risks, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.027 on 10 November 2020.

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

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