FYI Resources Limited

FYI Details

Opening Investment from GEM Global Yield LLC SCS: FYI Resources Limited (ASX: FYI) is engaged in the exploration and evaluation of minerals in Australia and South-East Asia. As on 16^th February 2021, the market capitalisation of the company stood at ~$131.17 million. On 15th February 2021, FYI announced an initial investment of $3.13 million by GEM Global Yield LLC SCS in its high purity alumina (HPA) project to provide shareholder stability and long run support. For $3.13 million of capital placement, FYI has issued 9.3 million fully paid ordinary shares at an issue price of 33.67 cents per share under an $80 million capital commitment provision with GEM. FYI will deploy proceeds from the placement to advance HPA project and costs of the share issue. 

Q2FY21 Results: During the quarter, FYI, and Alcoa advanced on the joint development of HPA project as per the Memorandum of Understanding (MOU) signed. The parties completed the HPA pilot plan operation and met the expected operating parameters during the quarter. The product will be now sent to targeted customer groups, end-users for on-going product qualification. The company undertook no major mining production activities during the quarter. The company incurred exploration, and evaluation cash payments of ~$397k during Q2FY21. The Directors exercised their options expiring on 26 November 2020 to raise $238k for HPA project. The company held cash of $6.82 million at the end of Q2FY21.

Cash Flows from Financing Activities, Q2FY21 (Source: Company Reports) 

Outlook: The company has planned on a list of activities for the March quarter including - advancing JV project discussions and carry out further HP product generation through higher collaboration with Alcoa for pilot plant trials. It will also undertake and develop potential customer engagement during the next quarter.

Stock Recommendation: The stock of FYI gave a positive return of 61.53% in the past three months and a positive return of 394.11% in the past six months. The stock is currently trading close to its 52-weeks’ high price of $0.515. The stock of FYI has a support level of ~$0.393 and a resistance level of ~$0.447. On TTM basis, the stock of FYI is trading at a price to book value multiple of ~35.7x as compared to the industry average (Construction Materials) of ~28.4x, thus seems overvalued. Considering the aforesaid facts, negative ROE, significant returns in the past 3 months and 6 months, negative margins, current trading level and valuation on TTM basis, we give an ‘Expensive’ rating on the stock at the current market price of $0.420, down by 3.449% on 16^th February 2021. 

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

Disclosure: FYI Resources Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.