Research notes

NGI has agreed to sell its stake (21%) in Invictus Capital Partners to New York Life Investment Management (NYLIM). The sale will take place in several stages. The sale crystallises a premium of up to ~8% to cost on the initial 12.7% stake, while NGI keeps its carry and future upside through a residual 8.3% stake. Management expects the retained stake could be worth meaningfully more, on a pro-rata basis, when it is transferred in 2031, helped by the NYLIM partnership. In our view, the sale shows the optionality and embedded value in NGI's portfolio. We have left our earnings forecasts unchanged for now and will wait for more detail from NGI at its February result. That timing matches the expected transaction completion in the first quarter of 2027. We see long-term value in the NGI story and maintain our BUY recommendation and target price of A$3.04.

FY26 saw CC5 execute the “Land” phase of its strategy. CC5 delivered 11 APAS® Independence placements, eight of them to leading pharmaceutical manufacturers and taking the total installed base to 37 instruments. FY26 revenue was A$4.7m, including A$2.9m in instrument sales. Novo Nordisk ordered two additional instruments. CC5 enters FY27 with A$1.3m of ARR, and its strongest pipeline to date at 180 qualified opportunities, 100 of which are with existing customers.

HLS has agreed to sell Agilex Biolabs to Novotech for A$160m (cA$155m net), with completion slated for 2HFY27 subject to FIRB/ACCC approvals. >The transaction values Agilex Biolabs at 19.8x FY26 EBITDA (pre-AASB16), broadly in line with the c21x HLS paid for the division in Dec-21 at the height of the pandemic-era boom. >Importantly, we view the disposal as removing a non-core business and providing liquidity (net cash on close) to support the Pathology turnaround without the need for a dilutive equity funding. >As such, we view the transaction as pragmatic but not transformational, with the ultimate investment case still resting on whether HLS can deliver sustainable earnings leverage in Pathology, which remains a moving feast. We lower our price target to A$0.40 and maintain HOLD.

We initiate coverage of Joyce Corporation (JYC) with a BUY recommendation and $7.52 price target (29% potential TSR at current prices). JYC operates in the furniture and renovation market through its 51% ownership of KWB Group and 100% ownership of Bedshed. We forecast EPS CAGR of 11% over FY27-29E, accompanied by a 5.3% dividend yield. KWB is the primary earnings driver and offers a compelling growth profile. It is the market leader in the highly fragmented, cottage-like kitchen renovation segment, operating 32 corporate showrooms (with a long-term target of 55+), with no presence yet in VIC or WA. Sector-leading margins (gross margin >50%, EBIT margin >22%) have further upside as sales per store improve and the network scales, underpinning an attractive multi-year earnings growth outlook for the group.

H&M Hennes & Mauritz AB is a multinational fashion and design group conglomerate based in Vasteras, Sweden. Its 11 brands include H&M, COS, Weekday, Monki, H&M Home, & Other Stories, Arket, Afound, The Singular Society, Creator Studio and Sellpy. Across these brands, its main operating segment is affordable and sustainable wardrobe essentials, but it also offers fashion pieces and unique designer collaborations, accessories, stationery, homewares, shoes, bags and beauty products. H&M Group operates over 4,300 stores worldwide. 

We initiate coverage on AIC Mines (A1M) with a BUY rating and a 12-month target price of A$1.20ps. >The Eloise plant expansion and Jericho ramp-up take A1M to a dual-mine operation, almost doubling copper production to ~25ktpa by FY29. Its recent acquisition of the Mt Cuthbert project in the same region adds near-term exploration upside and a potential secondary standalone copper operation in the longer term. >We see A1M as one of the more compelling ways to gain leverage to a structurally tight copper market, funded from its own balance sheet.

Mixed revenue and cost trends, FY26 guidance achieved - while revenue and cost performance were mixed against our forecasts, AQZ delivered FY26 underlying PBT in line with our estimates and within its guided range. Deleveraging in FY27 - AQZ is targeting a reduction in leverage to ~2.1x net debt/underlying EBITDA by FY27 end, underpinned by the A$40m equity raising and planned asset sales of A$60-75m. We have upgraded to a SPECULATIVE BUY (previously HOLD) with an increased price target of A$0.85ps (previously A$0.75) and reduced our risk premium to 20%.

CGS is a high-quality, science-led provider of digital cognitive assessment and endpoint data quality services to the clinical trials industry. >Following a record FY26, CGS enters FY27 with record contracted future revenue of US$118.5m (+32% pcp), a diversifying pipeline, and a two-year technology program designed to expand margins as volumes grow without a corresponding increase in headcount. It is debt-free with US$34.7m in cash, generates high incremental margins on a largely fixed cost base, and returns capital through dividends while retaining capacity to reinvest. >The share price has re-rated strongly as the market has recognised the improving quality and predictability of earnings. The key question is whether CGS can sustain continued contract growth while converting scale into improved margins, an outcome we see as achievable. >We initiate coverage with a BUY rating and A$4.07 target price.

RMS has released its FY27 guidance and four-year outlook, outlining a clear pathway to ~600kozpa by FY30, driven by the expansion of the Mt Magnet processing hub and a growing contribution from higher-grade underground ore sources. The outlook reinforces our view that RMS is developing one of the highest quality growth profiles in the Australian gold sector. >FY27 guidance of 205-225koz at an AISC of A$2,150-2,350/oz was broadly in line with expectations, while the medium-term outlook delivered meaningful production upgrades from FY29 onward as higher-grade material from Dalgaranga, Cue and Galaxy displaced lower-grade feed in the mine plan. >We maintain our BUY rating and raise our price target to A$5.02ps.

If it wasn’t for two unplanned manufacturing disruptions, in our view, NUF would have beaten consensus expectations given Seed Technologies earnings have once again been upgraded due to higher Omega-3 prices. Importantly, NUF is still guiding towards strong earnings growth in FY26 and is on track to materially deleverage, with further improvement targeted in FY27. >Given NUF’s operating and financial leverage and high tax rate in FY26, a minor EBITDA revision results in a large downgrade to EPS. With further operational improvements targeted, another A$50m cost out program and more Omega-3 oil to sell at high prices, we have left our FY27/28 EBITDA forecasts unchanged, while EPS in these years increases given lower D&A post plant closures. >While a revision before an Investor Day next week is unfortunate, the turnaround plans at NUF remain on track and the stock is materially undervalued compared to peers. We reiterate our BUY rating with a new price target of A$4.24.