3 Stocks Under Discussion – A2M, TNG and TAW

  • Sep 25, 2018 AEST
  • Team Kalkine
3 Stocks Under Discussion – A2M, TNG and TAW

THE A2 MILK COMPANY LIMITED (ASX: A2M): A2M produces, markets and sells premium branded dairy nutritional products in targeted global markets. In FY2018, the net profit after tax increased by 116% to $195.7 million compared to previous year. The EBITDA increased by 101% to $283 million compared to last year. There has been a substantial physical distribution growth to 10,000 stores in china and 6,000 stores in US. The growing demand of health and wellness products and growing middle class in Asia are major macro consumer trends which can support the company’s growth strategy.

The company is anticipating further growth in revenue in respect of products in China and US. The company is thus focusing on growth initiatives in targeted emerging markets and new product development. However, marketing expenditure is expected to be higher due to continued investment in Australian Market, re-phasing of 2H18 activities in China, and US expansion investment support. This comes in line with the strategic moves planned for the next financial year. In the last six months, the share price of the company decreased by 12.62% to $10.82 as on 25 September 2018 (as at 10:50 AM AEST). The latest fall has been seen against the stupendous rise of 1824% since listing on ASX. It now seems that the group has lost the charm as the leading infant formula company with many catalysts already factored in for the high stock price run-up.

 TNG LIMITED (ASX: TNG): TNG is a metals and mining company with activities across certain mineral properties in Australia. Recently, the company executed a binding subscription agreement with leading Indian mining Conglomerate the Vimson Group for a strategic investment into TNG, and this is worth about $10 million. Also, its wholly owned subsidiary Enigma Mining received in-principal approval for a landmark Native title Mining Agreement covering its Flagship 100%-owned Mount Peake Project. Meanwhile, the company has recently announced Mr. Jason Giltay as General manager of the company. In the June quarter of FY 2018 the company’s cash used in operating activities was $ 1.5 million, and total cash reserves of the company by the June quarter end amounted to $ 5.7 million.

In the past six months, the share price of the company decreased by 33% to $0.12 as on 25 September 2018 (as at 10:50 AM AEST). 

TAWANA RESOURCES NL (ASX: TAW) - As per the Company’s announcement on 24 September 2018, the securities of the company have been suspended from the quotation immediately under Listing rule 17.2, pending the release of an announcement. This seems to be in relation with the merger update and proposed debt funding package. Recently, Alliance and Tawana entered into a Scheme implementation Agreement for mergers of equals: Alliance to acquire 100% of Tawana shares. The merged group will have enhanced financial capacity with a strong pro-forma balance sheet. The Tawana and Cowan Lithium are also going to maintain strategic exploration and corporate relationships going forward.

In the interim financial result for six months period ended 30 June 2018, the total revenue of the company was $127,000 which was against a figure of $30,000 in the previous year. The loss after income tax was $7,253,000. The basic/diluted loss per share is 1.41 cents which was 2.78 cents the previous year. The net cash used in operating activities is $1,913,000 which was $2,521,000 in the previous year. In the last six months, the company’s share price decreased by 46.24% to $0.250 as on 25 September 2018 (as at 10:50 AM AEST).

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