1.  Venus Metals Corporation Limited (Recommendation: Speculative Buy, Market Cap: ~$24.17 million)

Venus Metals Corporation Limited (ASX: VMC) is a gold and base metal exploration company with a portfolio of gold and battery-associated metals exploration projects in Western Australia.

• H1FY21 Result Highlights: For the half year ended 31 December 2020, the company had reported total revenue of $140,224, up from the revenue of $52,445 in H1FY20. For H1FY21, the company reported a net loss of $1.128 million, down from the loss of $1.55 million in pcp.

Revenue Trend (Source: Analysis by Kalkine Group)

• Positive Exploration Updates: In a recent exploration update, the company notified that the reconnaissance soil sampling at Bridgetown East Ni-Cu-PGE Project has identified strong soil anomalies with maxima of 5160ppm Ni, 462ppm Cu, 27ppb Pt and 48ppb Pd. Further, the results of Phase 1 aircore (AC) drilling at its Henderson Gold-Nickel Project have highlighted new gold mineralised zones at the Emerald South and Henderson Bore Prospects.
• Cash and Debt Scenario: As reported in June 2021 quarterly cash flow report, VMC had a cash balance of $7.3 million, up from $485k posted in the preceding quarter.
• Outlook: Looking ahead, the company is focused on advancing its exploration programmes. At Henderson gold-nickel project, the company is planning a follow-up programme of reverse circulation (RC) drilling to test the continuation of gold mineralisation in fresh rock. At Bridgetown East Ni-Cu-Pge project, the company is planning MLEM and/or FLEM surveys for the Target areas 1 to 5.

SWOT Analysis:

Stock Recommendation:

• Over the last six months, the stock has corrected by ~14.99% and is currently trading lower than the average 52-week price level band of $0.16 and $0.285.
• On a TTM basis, the stock is trading at a price-to-book value multiple of 2.0, lower than the industry median of 2.5x, demonstrating that the stock might be undervalued.
• Key Risks: Fluctuations in prices of gold, Exploration Related Risk, COVID-19 Uncertainties, etc.
• Considering the company’s positive exploration updates, its plans for future exploration programs, current trading level, valuation on TTM basis, and key associated risks, we give a “Speculative Buy” rating on the stock at the closing price of $0.170, up by ~6.25% as on 24 September 2021.

VMC Daily Technical Chart, Data Source: REFINITIV

2. Orcoda Limited (Recommendation: Speculative Buy, Market Cap: ~$22.13 million)

Improved FY21 Results: Orcoda Limited (ASX: ODA) is a diversified transport logistics & transport services company that provides best-in-class solutions to help make its clients the most productive and cost-effective organisations in their respective industries.

• Rise in Revenue: For the year ended 30 June 2021, ODA reported total consolidated revenue of $8.83 million, up 381% on the previous year, mainly driven by the revenue contribution from Betta Group.
• Improved Operating Profit in FY21: The company’s operating profit for FY21 stood at $456,558, up from the loss of $6.74 million in FY20.
• Increase in Total Assets: At the end of FY21, the company had total assets of $17.58 million, up from $9.6 million on 30th June 2020.

Revenue Trend (Source: Analysis by Kalkine Group)

Cash and Debt Scenario: As at 30 June 2021, the company had cash and cash equivalents of $2.37 million, up from the cash balance of $1.37 million as at 30 June 2020. At the end of FY21, the company had total lease liabilities (current and non-current) of $0.35 million and financial liability (current and non-current) of $2.45 million.

Outlook: Looking ahead, the company if focused on delivering operational efficiency to major transport infrastructure projects through its proprietary technology products. Further, the company is focused on scaling its existing technology and pursuing value accretive acquisitions. The company believes that its recurring revenues will continue to grow as it brings more customers.

SWOT Analysis:

Stock Recommendation:

• Over the last one month, the stock has corrected by ~5.71% and is currently trading slightly higher than the average 52-week price level band of $0.09 -$0210.
• On a TTM basis, the stock is trading at a price-to-book value multiple of 2.1x, lower than the industry average of 3.0x, demonstrating that the stock might be undervalued.
• Key Risks: COVID-19 Uncertainties, Foreign Currency Risks, Stiff Competition, etc
• Considering the company’s improved results in FY21, modest outlook, valuation on TTM basis and associated key risks we give a “Speculative Buy” rating on the stock at the current market price of $0.165, up by ~10% as on 24 September 2021.

ODA Daily Technical Chart, Data Source: REFINITIV

3. Shekel Brainweigh Ltd Recommendation: Speculative Buy, Market Cap: ~$19.91 million)

Shekel Brainweigh (ASX: SBW) is an advanced weighing technology firm and artificial intelligence innovator that develops advanced weighing systems for the global retail and healthcare markets.

• H1FY21 Result Highlights: For H1FY21, SBW reported total revenue of US$10.6 million, up 34% on pcp, driven by the growth in Retail Innovation division. Further, the company reported gross profit growth of 38%. For H1FY21, the company incurred a net loss of US$2.75 million, up from the loss of US$2.5 million in H1FY20, mainly due to an increase in selling and marketing expenses and general and administrative expenses.
• Cash and Debt Scenario: As at 30 June 2021, the company had cash of US$4.35 million, compared to US$1.47 million as at 31 December 2020. At the end of H1FY21, the company had short term loan of US$4.48 million, long-term lease liabilities of $US$0.77 million and convertible loan of US$4.94 million.

Current Ratio Trend (Source: Analysis by Kalkine Group)

• Outlook: In the second half of FY21, the company is focused on maintaining a strong momentum in Shekel’s core markets in Europe and US. The company plans to launch first autonomous stores in Israel and in EU. The company also intends to accelerate marketing activities in Europe and Asia and is focused on growing revenue through product sales and SaaS.

SWOT Analysis:

Stok Recommendation:

• Over the last nine months, the stock has corrected by ~33.33% and is currently trading lower than the average 52-week price level band of $0.100 and $0.350.
• On a TTM basis, the stock is trading at a price-to-book value multiple of 4.5x, lower than the industry (technology) average of 4.9x, thus seems undervalued.
• Key Risks: COVID-19 Uncertainties, Technology Disruption, Foreign Currency risk, etc.
• Considering the company’s decent revenue growth in H1FY21, modest outlook, current trading level, valuation on TTM basis, and associated key risks, we give a “Speculative Buy” rating on the stock at the market price of $0.13, as on 24 September 2021, 12:12 PM (GMT+10), Sydney, Eastern Australia.

SBW Weekly Technical Chart, Data Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined:

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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