Research notes

DBI has executed a refinancing that indicates its cost of new debt has reduced dramatically. Forecast upgrades related to reduce cost of capital drive a c.8% increase in our target price to $5.10/sh. ACCUMULATE. Next key event is the FY25 result that will be released in February.

BAP has lowered its FY26 underlying NPAT guidance by ~17% to A$44-49m, and 1H26 underlying NPAT by ~60% to A$5-8m amid weaker Oct/Nov trading. Management reiterated confidence in a materially improved 2H (implied ~A$40m NPAT at the midpoint); however, the magnitude and timing of today's downgrade - coming shortly after the 20-Oct update - warrants some caution around 2H expectations. The balance sheet also appears to be a point of concern, with BAP in discussions with lenders for covenant relief in FY26, with our estimates for gearing potentially approaching/exceeding the current covenant of ~3.0x (MorgansF ~3.05x). Given significant share price weakness, renewed corporate appeal may arise. However, absent a takeover, we view the investment case as challenged given the sharp deterioration in earnings visibility, ongoing staff turnover, margin pressure, market share losses, balance sheet risk, and anaemic sales growth.

Epiminder (EPI) aims to transform epilepsy diagnosis and management through the Minder® system, the first FDA-approved sub-scalp EEG capable of continuous brain monitoring for months or years. Unlike current short-duration EEG tests, Minder® provides long-window, high-fidelity that enables more accurate diagnosis and better treatment decisions. EPI is targeting a phased US commercial launch in 2H26. EPI’s initial focus is drug-resistant epilepsy (DRE) patients with inconclusive EEG results, a segment representing up to 45,000 patients annually in the US and a US$1.1bn market opportunity. IPO proceeds will fund completion of the DETECT demonstration study, development of the next-generation G1 Minder® system, and initial build-out of US commercial infrastructure. Key near-term catalysts include the targeted 2H26 release of the G0 device and start of the DETECT study. We initiate coverage of EPI with a SPECULATIVE BUY rating and a target price of A$2.33.

WTC’s FY25 investor day highlighted the group’s progress and broader outlook for a number of key near to medium-term growth initiatives, which in our view continues to see the group in a solid position to drive value. We retain our BUY rating, with a revised PT of $112.50ps.

STP has provided a materially weaker than expected trading update for 1H26. Revenue for 1H26 is expected to be down 31-37% to $30-33m and EBITDA is expected to be a loss of $9-11m, including a $10m provision for inventory obsolescence. Excluding inventory obsolescence, EBITDA for 1H26 would be a loss of $1m to $1m profit. As a result of recent trading, STP has withdrawn its FY26 earnings guidance. We have materially lowered our earnings estimates for FY26/27/28 based on this trading update and uncertainty around the path forward. We have moved our recommendation to a HOLD (from SPEC BUY), with a blended EV/EBIT and DCF valuation of $0.36, we have applied a 15% discount to this valuation to set our price target at $0.30 due to earnings uncertainty.

Following a review of our research universe, we discontinue Keeping Stock coverage of Firstwave Cloud Technology (FCT AU).

CKF’s 1H26 NPAT was 12% higher than forecast and 30% up yoy. The strong headline beat was partly a function of solid operational execution and a return to positive LFL sales growth, but was significantly boosted by a lower-than-expected depreciation charge and tax rate. EBITDA was up 11% and 1% higher than forecast. The value proposition inherent in the KFC brand has allowed it to outperform peers in a competitive and challenging QSR market in Australia and continental Europe. 1H26 margins improved, although we anticipate some downward pressure in Australia in the second half as commodity price inflation resumes. CKF upgraded its full year guidance. We have increased our NPAT estimates by 3% in each of the next three forecast years and our target price rises by 1% to $12.40. With just over 10% TSR implied by our revised target after a strong rally, we retain our ACCUMULATE rating.

MI6 has released the highly anticipated MRE update for its flagship Bullabulling Gold Project. Bullabulling now hosts 130Mt at 1.0g/t Au for 4.5Moz, a material beat on our prior upside case of 3.5Moz. Importantly, a high degree of the resource (3Moz or 67%) remains in the ‘indicated’ category and underpins our updated forecasts and future pre-feasibility studies (PFS) - due mid CY26. Given the updated scale, we now see clear line-of-sight to a ~200kozpa operation over ~15 years (previously 160–170kozpa), which we model via a staged mill expansion from 5Mtpa to 7Mtpa. Bullabulling now positions MI6 as the largest single-asset, undeveloped gold resource in Australia outside the established producer cohort, and we view it as a must-own stock. We upgrade our rating to BUY (from SPECULATIVE BUY) and increase our price target to A$1.10ps (previously A$0.55ps).

TWE has announced that it expects to recognise a non-cash impairment of at least all the goodwill of its US based assets (A$697.4m). While this is disappointing, it isn’t a complete surprise given the company has new CEO and the US market remains challenging, in fact, category trends have deteriorated further. A further update on trading will be provided in mid-December. We suspect that trading has been weaker than expected and wouldn’t be surprised if consensus is too high. The 1H26 result will be particularly weak. We have made large revisions to our forecasts and stress that earnings uncertainty remains high. Consequently, we maintain a HOLD rating.

Our modelling assumes APA invests about $5bn in growth projects over the next 10 years (APA’s target is $2.1bn over FY26-28) delivering incremental earnings. Today’s announcement that APA is working towards development of a gas-fired power station in Qld contributes to a partial backfilling of this assumption. We make immaterial adjustments to our forecasts. Target price declines 14 cps to $7.74/sh. TRIM retained, given potential TSR at current prices of c.-10%.