Best calls to action – Tuesday, 1 March

About the author:

Andrew Tang
Author name:
By Andrew Tang
Job title:
Analyst - Equity Strategy
Date posted:
01 March 2022, 6:00 AM
Sectors Covered:
Equity Strategy and Quant

Homeco Limited - No standing still

FUM has grown materially and now sits at +$5bn driven by the IPO of HCW and more recently the merger between HDN and AVN. Further growth is expected via new funds and a >$1bn development pipeline across the listed REITs.

FY22 guidance has been upgraded with pre-tax FFO to be at least 29c (was 26c) driven by transactional fees and trading profits from property sales. HMC remains in a net cash position ensuring capacity for opportunities. We retain an Add rating with a revised price target of (login to view).

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

Dalrymple Bay - Patience is a virtue

No nasty surprise in the FY21 result. FY22 DPS guidance within target growth range. No meaningful update on price setting negotiations with DBCT customers. Change to revenue forecast is NPV neutral. Increase in corporate costs is not.

Target price (login to view). ADD retained given c.22% total potential return at current prices.

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

Motorcycle Hldg - Cruising through disruption

MTO's 1H22 result (pre-released): revenue +8.5% to A$237m (pcp A$218.4m); EBITDA (pre-AASB 16 / excl. JK) -5.7% to A$19.8m (pcp A$21m); and NPAT -4.1% to A$12.6m (pcp A$13.1m).

A strong result for MTO, comping an elevated base (1H21 EBITDA A$21m excl. JK) with significant lockdown impacts to dealerships (16 affected in 1H) and a challenging environment for retailers (ongoing supply chain disruption).

MTO have pointed to a normalising of trade through Feb (Jan significantly disrupted), increasing demand momentum and ongoing supply constraints (GM tailwinds for MC dealers). We expect an abating of lockdown impacts and incremental acquisition contributions will improve the seasonally lower 2H skew.

Trading on ~8x PE; a clean balance sheet (~A$5m net debt); ongoing favourable trading conditions (robust margin dynamic; easing supply constraints); and clear intent to continue to scale via acquisition, we maintain an Add rating.

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

Kina Securities Ltd - Continuing to deliver good profit growth

KSL's underlying NPAT of ~PGK96m was +27% on the pcp and in-line with MorgansE and company guidance. Overall, we saw this as a strong result, which largely beat our expectations in all areas except operating expenses.

We downgrade our KSL FY22F/FY23F EPS by 3%-5%, mainly reflecting lower expected leverage over the next few years. Our PT is reduced to (login to view). KSL is still trading on only ~6x FY22F earnings and a >10% dividend yield, which we see as too cheap. ADD maintained.

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

If you would like access or more information, please contact your adviser or nearest Morgans office.

Request a call  Find local branch

Need access to our research?

You are also welcome to start a two-week trial of our online platform, which provides access to detailed market analysis and insights, provided by our award-winning research team

Create trial account 

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.

  • Print this page
  • Copy Link