Liquefied Natural Gas Limited

LNG Details 
Clarified Price query: Liquefied Natural Gas Limited (ASX: LNG) recently responded to the pricing query on trading during January 10, 2017 to January 13, 2017. LNG clarified that the group is in compliance with listing rules and it is not aware of any information that has not been announced to the market.  Magnolia LNG, Liquefied Natural Gas’s subsidiary is in the process of agreeing with KSJV (a KBR – SKE&C joint venture led by KBR) to extend the validity period of their present engineering, procurement, and construction (EPC) contract. Both the groups have agreed to EPC contract interim extension through January 31, 2017 as a bridging step for longer-term extension agreement. Further, LNG’s indirect wholly owned subsidiary, Bear Paw Pipeline Corporation Inc. has received environmental assessment approval from Nova Scotia Environment for natural gas pipeline.
 
Stock Performance: LNG stock has been under slight pressure in last few days on the back of volatile commodity prices.Otherwise, the stock rallied about 28.6% in last four weeks (as on January 16, 2017). Given the prospects, we maintain our “Buy” recommendation on the stock at the current price of - $ 0.78

 
LNG Daily Chart (Source: Thomson Reuters) 

Monadelphous Group Limited

MND Details 
Diversification strategy to offset target market pressure: Monadelphous Group Limited (ASX: MND) recently reported that the group’s joint venture firm, Zenviron Pty and Vestas consortium won a 430 million contract to deliver a wind farm project in New South Wales from Australian Wind Technology. Zenviron is set to do over 20% of the works under the contract. Meanwhile, to combat the pressure from Australia’s mining and oil and gas sectors in the last five years, the group adopted diversification strategy leading to a better performance. MND focused on maximizing returns in their core service markets via the productive delivery of services as well as enhanced their business development activities. Moreover, MND even expanded their markets in Australia as well as overseas. The group built a decent balance sheet to position themselves in the challenging markets. On another note, AnaeCo reported about completion of XEPT (Xiaoqing Environmental Protection Technology Co Ltd) transaction and this transaction is about purchase of a major portion of a loan owed by AnaeCo to MND and the conversion of that loan, and the residual loan owed to Monadelphous, into equity. 

FY16 Performance (Source: Company reports)
 
Stock Performance:MND stock has risen 20.7% in the last six months but lost over 6.9% this year to date (as at January 16, 2017). Despite the diversification efforts, MND’s core division continued to deliver a weak top line in FY16. Further, with the stock price momentum witnessed last year, MND is trading at slightly higher levels. We maintain an “Expensive” recommendation on the stock at the current price of – $ 10.58

 
MND Daily Chart (Source: Thomson Reuters)

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