This report is an updated version of the report published on 19 September 2024 at 2:26 PM AEST.  

Company Overview 

Company Overview: Monadelphous Group Limited (ASX: MND) is an engineering company, provides construction, maintenance and industrial services to the resources, energy and infrastructure sectors. It operates through two divisions: Engineering Construction and Maintenance and Industrial Services. Johns Lyng Group Limited (ASX: JLG) is an Australia-based company engaged in building construction, restoration, and providing energy services nationally and globally. Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights & Analysis, Financial Metrics, Financial Commentary, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.  

Investment Summary 

Sector Overview and Supporting Catalysts 

Data Insights and Analysis 

Index Performance 

 Investment theme and stocks under discussion (MND, JLG) 

After understanding the sector, let us now look at two companies from the construction sector listed on the ASX. The price potential of the companies under discussion have been analysed based on Price/Earnings multiple based relative valuation method, respectively. 

1.  ASX: MND (Monadelphous Group Limited)

(Recommendation: ‘Speculative Buy’ at AUD 12.34, Potential Upside Low Double-Digit, MCap: AUD 1.19bn) 

MND, an engineering company, provides construction, maintenance and industrial services to the resources, energy and infrastructure sectors. It operates through two divisions: Engineering Construction and Maintenance and Industrial Services. 

2. ASX: JLG (Johns Lyng Group Ltd)

(Recommendation: ‘Speculative Buy’ at AUD 3.420; Potential Upside: Low Double-Digit; MCap: AUD 944.18mn) 

JLG is an Australia-based company engaged in building construction, restoration, and providing energy services nationally and globally. 

The stock has declined by ~35.79% in the last one month, and over the last six months, it has corrected by ~45.20%. The stock has a 52-week low and 52-week high of AUD 3.140 and AUD 7.290, respectively, and is currently trading below the 52-week high-low average. JLG was last covered in a report dated ‘23 August 2024’. 

 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 19 September 2024. 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.