Section 1: Company Overview and Fundamentals

1.1 Company Overview:

BrainChip Holdings Limited (ASX: BRN) is a developer of neuromorphic processors. The company offers the development of spiking adaptive neuron processor technology, which integrates large networks into portable battery-operated products.     

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~21.30% of the total shareholding. Van Der Made (Peter Adrianus Johannes) and Mankar (Anil Shamrao) hold a maximum stake in the company at ~8.87% and ~5.69%, respectively.

1.4 Key Metrics: BRN reported an asset turnover ratio of 0.16x during 1HFY22 which increased from 0.03x in 1HFY21. Further, the company reported an increase in the quick ratio of around 13.21x during 1HFY22 compared to 7.05x during 1HFY21. Below is captured the trend of the current ratio and gross margin:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Insights of 4QFY22: During 4QFY22, the company informed that its ecosystem network continues to gain momentum as BRN is joining Intel Foundry’s IFS (Intel Foundry Services) Accelerator - IP Alliance, extending access to the Akida IP.   

Financial Update for 4QFY22:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary:

The stock has witnessed a fall of ~15.50% in 3 months, and over the last 6 months, it has decreased by ~47.09%. The stock has a 52-week low and 52-week high of AUD 0.500 and AUD 1.465, respectively and is currently trading slightly below the average of 52-week high-low average.

4.2 Stock Summary

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 17, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

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

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