Latest Research

Threat Protect (TPS) - Executing

Threat Protect LogoThe latest two acquisitions from the existing monitoring client base means TPS has converted close on 3,000 reseller lines to direct lines so far this half. Boosting revenue, with little associated cost impact, adds to the good run-rate evident in the last two quarters. We expect TPS to continue with this strategy, leveraging the underutilised control rooms and positively impacting margin. We maintain our speculative buy recommendation on a blended valuation of $0.28 (this unchanged on prior after taking into account the 1 for 7 share consolidation ratified at the recent AGM).

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Decmil (DCG) - Solar PV Project

Decmil LogoDCG’s credentials are well established in resources, growing in infrastructure, and emerging in renewables. The MOU with Maoneng, if progressed successfully to a ~$275m EPC contract for the Sunraysia Solar PV project, would go a long way to establishing DCG as a contender for significant potential work in the renewables sector, and add to the opportunities in resources and infrastructure. Buy maintained on the compelling macro.

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Paragon Care (PGC) - Strengthens Offering

Paragon Care LogoThe $8.5m acquisition of an immunohaematology business strengthens PGC’s product offering, broadens relationships, is well within balance sheet capacity, and maintains strategic impetus. Acquisitive and organic growth to date has been well managed and suggests upside risk to our forecasts. We maintain a positive view and buy call on a valuation that has been upgraded slightly to $1.15 (prior $1.12).

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Pacific Energy (PEA) - Loss Of Newmont Contract

Pacific Energy LogoPEA has been unsuccessful in its tender for two new gas-fired power stations at Newmont’s Tanami operations. Currently PEA has ~46MW of diesel-fired generators installed at Tanami, which will be de-commissioned and redeployed once PEA’s current contract terminates at the end of CY2018. The loss of Tanami represents a 16% reduction in PEA’s current contracted capacity. Near-term negative sentiment and uncertain long-term growth underpin our HOLD call on a revised $0.67 valuation (previously $0.70).

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Austal (ASB) - We'll Take It

Austal LogoAlthough design partner Fassmer lost the OPV bid, ASB will be involved in the programme with winning bidder Luerssen. This is not unexpected given ASB’s shipbuilding experience and existing facilities. Importantly, the work will help underpin Henderson’s operations, backfilling our Australian forecasts (rather than adding to them). We expect the maturing LCS programme and significant commercial work to boost FY19 earnings. Momentum is positive and we maintain a buy call on a $2.10 valuation (prior $1.96).

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