Stocks Under Discussion: QUB, OML, ING, LYC, CQE, MMM, IAG, SYR

  • May 04, 2020 03:30 PM AEST
  • Team Kalkine
Stocks Under Discussion: QUB, OML, ING, LYC, CQE, MMM, IAG, SYR

COVID-19 pandemic has led to a severe impact on a number of businesses, compelling them to withdraw their full-year guidance or suspend their operations. At the same time, there are few businesses that have benefitted from the coronavirus spread.

In such market scenarios, a portfolio with diversified assets can help investors. Here, in this article, we are discussing few ASX-listed companies that belong to different stocks, catering to diverse customer base. Let us have a look at these stocks and their recent significant market updates, including capital raisings, COVID-19 response and quarterly performance.

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Qube Holdings Limited (ASX: QUB)

Qube Holdings, an integrated provider of import and export logistics services, recently successfully completed an institutional entitlement offer, raising ~$264 million at $1.95 per share. The Company witnessed strong support from existing investors and other institutional investors for the offer, which is part of the fully underwritten 1 for 6.35 accelerated pro-rata non-renounceable entitlement offer, announced on 30 April 2020.

The entitlement offer supports the Company to continue injecting funds in its core businesses, while pursuing growth opportunities expected to arise from the current environment.

Expected to raise ~ $236 million, the fully underwritten retail component of the Entitlement Offer is due to open on 7 May 2020 and close on 21 May 2020.

QUB shares recommenced trading on ASX on 4 May 2020, and at AEST 12:28 PM, the stock was trading upward by 12.67% to $2.490.

oOh!media Limited (ASX: OML)

oOh!media Limited (ASX: OML), an Out of Home advertising solutions provider, during mid-April 2020, completed a retail offer, which was strongly supported by eligible retail shareholders. Valid applications received totalled ~$10 million or accounted for ~73% take up rate.

The offer, which is part of the Company’s underwritten accelerated non-renounceable pro rata entitlement offer, was targeted towards raising ~ $14 million through the issue of each OML share at a price of $0.53.

Previously, the Company had received strong support for the institutional entitlement offer, with a take up rate of approximately 91%.

OML stock was trading downward by 7.035% to $0.925 on 4 May 2020 (AEST 12:34 PM).

Inghams Group Limited (ASX: ING)

Poultry producer, ING, on 4 May 2020, released an ASX announcement, unveiling a business update and COVID-19 response.

Business Update-Group

  • ING reported that the Group has been on-track for the second half of FY20 to surpass performance in the first half of FY20.
  • The Company mentioned that it would be premature to draw any conclusions regarding trading results of the final 9 weeks of FY20, owing to changes in volume and channel mix across its business.

Business Update-New Zealand

  • Current financial results of the Company in NZ are ahead of last year
  • However, there is less certainty that the Company would be able to deliver the planned higher FY20 result versus FY19, owing to the impact of restrictions on the poultry market and its operations in New Zealand.

COVID-19 Response - The Company has implemented cost management measures such as a new hire freeze, management of annual leave balances, lowering discretionary spend, and targeted reductions and deferral of capex.

Boasting a strong balance sheet, Ingham has good access to liquidity and funding. On 4 May 2020 (AEST 12:55 PM), the stock was trading at $3.355, down 1.613% from its previous close.

Lynas Corporation Limited (ASX: LYC)

Metals & mining sector player, Lynas Corporation announced that its plant in Malaysia was set to recommence operations on 4 May 2020, following a Malaysian PM announcement on 1 May 2020 that manufacturing and other economic sectors would be permitted to start operating from 4 May 2020.

The plant would restart operating at ~ 70% of Lynas NEXT production rates, enabling the Company to refill supply chains and to restock depleted inventories of critical materials. Meanwhile, LYC would continue to focus on the health and safety of its people and local communities.

Also, the Company would continue to operate its Mt Weld facility with reduced staff on site.

LYC was trading downward by 1.458% to $1.690 on 4 May 2020 (1:30 PM).

Charter Hall Social Infrastructure REIT (ASX: CQE)

Real estate investment trust focused on social infrastructure, Charter Hall Social Infrastructure REIT announced an equity raising plan, targeted towards strengthening its balance sheet and ensuring its business withstands any unexpected cash flow and valuation impacts from an extended COVID-19 pandemic. Moreover, funds raised would deliver flexibility to the Company to continue executing on its strategy in line with its social infrastructure mandate following the end of this pandemic.

The Company plans to raise $100 million via a fully underwritten institutional placement and up to $15 million through a non-underwritten Unit Purchase Plan.

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Given long WALE portfolio, low exposure to smaller tenants, no near-term debt expiries and government support to the childcare sector, the Company is currently well positioned to weather the COVID-19 pandemic.

Source: Company's report

CQE last traded at $2.380 on 1 May 2020, with a market cap of $722.08 million.

Marley Spoon AG (ASX: MMM)

Marley Spoon, engaged in the supply of semi prepared meals to consumers, distributors and other commercial or private customers, released a company presentation, highlighting strong growth for the first quarter of 2020.

  • Revenue for three months to March 2020 grew by 46% year-on-year.
  • Growth at the end of the March quarter accelerated owing to the COVID-19 crisis.
  • Since mid-March 2020, MMM experienced surge in global demand.
  • For the first time, the Company achieved positive operating cash flow on a global basis in Q1 2020.
  • Given inbound customer interest and lower advertising rates, MMM witnessed significantly lower customer acquisition costs.
  • Achieved an increase of 5 pts year-on-year to 29.5% in global contribution margin (CM), a record for the Company.

Source: Company's report

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Outlook - MMM anticipates achieving positive operating EBITDA on a group level in the June 2020 quarter, 6 months earlier than previously guided. The Company is well positioned to capture future growth with its two brands, across 3 continents.

MMM last traded at $1.080 on 30 April 2020, with a market cap of $171.2 million.

Insurance Australia Group Limited (ASX: IAG)

IAG, the parent company of a general insurance group, released a market update, unveiling that the Board would determine the quantum of any final dividend in August 2020 to be paid in September 2020, considering that in the present scenario, there is a limited scope for dividend payment.

The Company noted that investment income on shareholders’ funds amounted to a financial year-to-date loss of ~$280 million pre-tax at end-April 2020. Its underlying business performance for the nine months ended 31 March 2020 remained strong; however, COVID-19 related challenges, surrounding economic conditions and direction of investment markets are expected to have an impact on the Company’s business and financial performance in the concluding months of FY20.

The FY20 market guidance of IAG for growth in GWP (gross written premium) remains at a ‘low single digit’. Moreover, the Company expects a 12.5-14.5% reported insurance margin. The guidance is subject to the impacts outlined. Meanwhile, on the back of a CET1 ratio at the top end of its targeted range, of 0.9 to 1.1, the Company retains a strong capital position.

On 4 May 2020 (AEST 02:12 PM), IAG stock was trading downward by 1.786%.

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Syrah Resources Limited (ASX: SYR)

Mining explorer, SYR has announced the recommencement of operations at the Battery Anode Material plant in Vidalia, located in the US state of Louisiana. The Company had temporarily suspended plant operations on 23 March 2020 following the implementation of control measures.

Minor repairs to the plant would be completed to enable final process and product specification optimisation that is needed for the production of samples of anode precursor material (purified spherical graphite) for qualification with potential customers.

The Company plans qualification samples of active anode material (AAM) during second half of the calendar year 2020 through the installation of a pilot-scale coating plant and furnace at Vidalia; and, by toll treatment of precursor produced from Vidalia to AAM.

On 4 May 2020 (AEST 02:21 PM), SYR was trading at $0.230, down by 2.128% from its previous close.

 

With the pandemic continuing to affect the globe, healthcare companies are evaluating their lead compounds for COVID-19 treatment. Future revenue for these stocks depends on the probability of launching an approved treatment in the market.

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