Evolution Mining Limited

EVN Details
· Falling gold prices drove the stock lower: Evolution Mining Ltd (ASX: EVN) stock lost over 6.23% on December 01, 2016 due to fall in gold prices. On the other hand, EVN’s underlying net profit rose 114% year on year (yoy) to A$226.9 million in fiscal year of 2016 and generated an operating cash flow of A$628.4 million. Net mine cash flow enhanced 211% to A$428.2 million and consequently, the group made A$322.0 million of debt repayments.

· Recommendation: The group enhanced their gold production by 84% to 803,476 ounces for fiscal year of 2016 at an average All-in Sustaining Cost (AISC) of A$1,014 per ounce and an All-in Cost (AIC) of A$1,134 per ounce. However, with the ongoing gold prices fall, EVN could face tighter margins going ahead. As a result, the stock fell over 14.8% (as of November 30, 2016) in the last four weeks and we believe the pressure to continue in the coming months. We maintain our “Expensive” recommendation on the stock at the current price of – $ 1.80


Production Guidance (Source: Company Reports) 

Aconex Ltd

ACX Details
· Management change: Aconex Ltd (ASX: ACX) stock lost over 5.9% on December 01, 2016 leading to a total fall of about 22.5% in the last four weeks post delivering a mixed outlook. The group’s Chief Financial Officer (CFO), Steve Recht’s retirement announcement also dampened the stock sentiment. Steve Recht played an integral part in ACX performance and during their IPO.

· Recommendation: ACX was able to generate strong sales in the Americas for FY16 driven by rising US accounts. The group got new enterprise customers, especially in the ANZ region. However, their Conject business momentum was lower than estimated. The group expects lower growth for European business going forward. Moreover, ACX stock is currently trading at an unreasonable P/E. We give an “Expensive” recommendation at the current price of - $ 4.30 

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