Best calls to action – Wednesday, 1 September

About the author:

Andrew Tang
Author name:
By Andrew Tang
Job title:
Analyst - Equity Strategy
Date posted:
01 September 2021, 6:00 AM
Sectors Covered:
Equity Strategy and Quant

Bluebet Holdings Ltd - Capitalising on industry tailwinds

BBT delivered a strong result, with all key FY21 metrics exceeding prospectus forecasts. The 2H21 net revenue beat was 6.0%. FY22 trading has started strongly and provides a solid foundation ahead of the planned acceleration in marketing initiatives during 1H22.

Consequently, the implied 1H22 result (revenue +14.2% on 2H21A) from existing CY21 prosp. appears conservative to us.

Our upgraded revenue forecasts sit 3.9% ahead of CY21 prosp and we forecast FY22 revenue of A$45.5m (+40.5% yoy). With strong operational momentum, key near-term catalysts and long dated growth potential, we maintain an Add rating

Read our full reports and latest price targets on ASX:BBT here.

Regis Resources - Re-setting after sprint to the finish in FY21

Today's results held few surprises with production and FY22 guidance provided in July. NPAT (A$146m) was down 27% YoY, largely a result of increased D&A charges. Revenue ($819m, +8%) and EBITDA ($403m, +2%) both remained strong, though management flagged the cost pressures common to the sector in WA.

A soft start to FY22 is forecast, with planned mill shutdowns in the current quarter along with preventative geotechnical works across several open pits.

We maintain our Add rating, noting again that shareholders will require patience as the company demonstrates the benefits of the Tropicana acquisition and underground developments at Duketon.  

Read our full reports and latest price targets on ASX:RRL here.

Sandfire Resources - Unlocking value

FY21 financials beat our forecasts and SFR's cashflow outlook is compelling. Earnings beyond Degrussa's exhaustion in late 2022 are becoming clearer, but do come with execution and geopolitical risk. SFR offers 20% upside to our valuation and we upgrade to Add.

We note dramatic underperformance versus peers and upcoming incremental value catalysts at Degrussa (Old Highway) and Motheo (A4) which aren't included in our valuation or the share price.      

Read our full reports and latest price targets on ASX:SFR here.

Motorcycle Hldg - Poised to recommence the acquisition agenda

MTO's FY21 result was at the top-end of guidance set in May with EBITDA +61%. With a clean BS (zero net debt), MTO has ample firepower to resume its acquisition strategy and has articulated an 'aggressive' setting in this regard.

The group's goodwill impairment testing schedule provides reasonable clarity around earnings targets for FY22 and beyond. We roughly sit in line with this. Add rating maintained; A$3.69 PT + c5% yield.

Read our full reports and latest price targets on ASX:MTO here.

Regis Healthcare Ltd - Awaits more clarity in aged care reform

REG posted FY21 results which were slightly ahead of our expectations. Whilst performance in 2H continues to improve, occupancy levels remain below longer-term averages.

The aged care sector remains in challenging operating conditions given COVID and Royal Commission implications with further clarity around the aged care reform needed. We have adjusted our forecasts up by ~20% mainly to reflect the imputed income adjustments. Add.

Read our full reports and latest price targets on ASX:REG here.

Panoramic Resources - Refining our view as first nickel looms large

After a full review of operating assumptions following management discussions and updates at diggers and dealers, we have re-cut our production model for PAN. Key changes are production profile and ore dilution assumptions.

Upside potential remains for greater operating efficiencies and mine life extension through Resource conversion once drill pads are available underground. We maintain an Add rating, using a sum of the parts DCF valuation methodology.

Read our full reports and latest price targets on ASX:PAN here.

Medlab Clinical - Difficult year, but partner interest increasing

MDC released its FY21 results which were marginally below our forecasts, reflective of a difficult trading period and delays to clinical results. A rationalisation of the nutraceutical range has begun to bear fruit, resulting in a significant upturn in product margins although quantum of sales were lower than expectations as movement restrictions resulted in lower pharmacy sell-through.

While no forward guidance was provided, the report highlighted a significant pickup in partnering interest for MDC's NanoCelle technology, with discussions ongoing with a large number of companies. Looks like more to come on this front.

We remain positive on the partnering potential across MDC's assets although acknowledge timing to be critical in order to balance expected clinical program expenditure versus current cash balance. We retain a Speculative Buy recommendation.

Read our full reports and latest price targets on ASX:MDC here.

Find out more

You can find further detailed analysis of company results this reporting season by browsing our reporting season tag, and view a full list of upcoming results on our Reporting Season Calendar.

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Disclaimer: Analyst may own shares. The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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