Latest Research

Southern Cross Electrical Engineering (SXE) - Funding Growth

Southern Cross Electrical Engineering LogoAfter acquiring East Coast-based Heyday in FY17 SCEE transformed its business by diversifying revenue streams across sectors and geographies. The Company now has strong growth prospects through exposure to the NSW commercial market. The recent placement ($33.2m at an issue price of $0.75) will provide necessary working capital to support this strong growth. However, despite our positive view, recent share price gains leave little upside to our revised $0.80 valuation causing us to downgrade to a HOLD.

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Decmil (DCG) - Re-Initiation

Decmil LogoWe re-initiate with a buy call and a $1.40 valuation. We believe FY17 was the low point and expect future newsflow to be positive. From sole exposure to WA resources, recent diversification now provides DCG with multiple, Australia-wide opportunities to benefit from the growing spend across the infrastructure, resources and renewables sectors.

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Gold Road Resources (GOR) - Cracking The Regional Code

Gold Road Resources LogoGold Road (GOR) released its September Quarterly report with updates on the Gruyere Gold Project. Construction has commenced on the 50:50 Gruyere JV with mining set to commence within 12 months and first gold production in Q1 2019. Running in parallel GOR, is conducting an aggressive $24-26mpa exploration program on the Yamarna projects with the focus on additional mill feed for the JV or a potential new stand-alone project owned 100% by GOR. The majority of this expenditure is focussing on the North Yamarna tenements. We argue the market is not adequately valuing the exploration portfolio and that the geological understanding is now at a point that successes in regional exploration could translate to meaningful development plays either for mill feed for the JV or as standalone operations.

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Vault Intelligence (VLT) - Funding The Momentum/Ceasing Coverage

Vault Intelligence LogoThe last two quarters has seen VLT successfully execute on its new sales and business development strategy. Further, the recent $4.5m capital raise ensures these efforts can continue. Our forecasts are based on steady growth in SaaS revenue (as per Company targets), however it will be some time in FY19 before inflows exceed outflows in our view. This, together with a blended valuation of $0.033 (prior $0.035) that is close to the current share price, means a hold call remains appropriate.
We are ceasing coverage on issue of this note, as part of an industrial research re-focus.

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Sino Gas & Energy (SEH) - On The Cusp Of Full-Scale Development

Sino Gas & Energy LogoSino Gas and Energy (SEH) has provided detail on the proposed development plan for its Ordos Basin gas assets outlining staged development with Phase 1 production of 350-550MMscf/d (60-90mboe/d). This release coincides with the submission of the first Linxing (LX) ODP (Overall Development Plan) to PSC Partner CUCBM. SEH has secured up to US$100m of debt funding with Macquarie which should fund development through to positive cashflow, expected in 2020. The Company also released September Q results. Downstream issues impacted gas offtake nominations from the Sanjiaobei (SJB) Central Gathering Station (CGS), resulting is a 14% QoQ drop in production to 13MMscf/d rate. Cash and debt at 30 September were US$30.5m and US$10.0m respectively.

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