Parkway Minerals NL

PWN Details

Parkway Minerals NL (ASX: PWN) is in the exploration of phosphate and potash mineral properties in Australia and Germany. The company holds interests in the Karinga Lakes Potash Project, located within the Central Australian Groundwater Discharge Zone and the New Mexico Lithium project in New Mexico, the United States.

H1FY21 Results Performance (For the Period Ended 31 December 2020)

• Rise in Total Income: The company has generated a total income of $1.19 million in H1FY21 versus $17.99k in H1FY20 primarily driven by the benefits of government grant and movement in fair value of financial assets
• Net Income: The company witnessed a turnaround in its profitability with net income of $0.38 million in H1FY21 versus a net loss of $1.29 million in H1FY20.
• Other Update: During the period, the company has successfully completed the KLPP-PFS, based on the aMES technology. The PFS was co-developed by PWN and Worley, under a global strategic cooperation agreement.

Key Data (Source: Company Reports) 

Quarterly Activities Update (For the Quarter Ended 30 June 2021 – Q4FY21)

• Parkway Process Solutions (PPS): Fruitful growth in industrial water treatment products and services business, with initial launch of PPS on 8 July 2021.
• Parkway Process Technologies (PPT): Extended progress in leveraging proprietary process technology platform to boost existing and emerging business development initiatives.
• Strong balance sheet with $7.5 million in cash reserves as of 30 June 2021

Outlook

The company highlighted that the benefits of significant progress along with targeted investment in PPS to date, will boost the company in delivering a sustainable and growing revenue base going ahead.  Because of ordinary operations and recently launched initiatives, the company managed to generate sales of $260k in Q4FY21, representing an important milestone and prospects.

Key Risks

The company’s operations are exposed to the risks associated with Covid-19 pandemic and restriction that could disrupt or delay its projects. Further, the group is prone to the interest rate risk as well as credit risk and equity price risk.

Technical Analysis

Daily Chart

Source: REFINITIV, Note: The purple color line in the chart shows 21-period SMA.

Note: The purple color line in the chart shows RSI(14-period).

On a daily chart, PWN stock price witnessed a breakout of the horizontal trend line at AU$0.015 level (on 26 April 2021). Currently, stock prices are continuously sustaining below the breakout level and facing resistance of the same. On the daily chart, the momentum oscillator RSI (14-Period) is trading at ~65.10 levels. An important support level for the stock, is placed at AU$0.011 while the key resistance level is placed at AU$0.015.

Stock Recommendation

PWN has reported 9-month and one-year returns of ~+30.00% and ~+73.33%, respectively. The stock is trading lower than the average of the 52-week high price of $0.032 and the 52-week low price of $0.006.

Considering the increasing cash outflows, the current trading levels, and the associated business risks, we advise the investors to liquidate the stock. Hence, we give a “Sell” rating on the stock at the current market price of A$0.014 per share (Time: 1:28 PM (GMT+10), Sydney, Australia) on 6^th August 2021.

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.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

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