DGL Group Limited

This report is an updated version of the report published on the 20 September 2023 at 2:18 PM AEST.

Section 1: Company Overview and Fundamentals Insights

DGL Group Limited (ASX: DGL) is an ASX listed diversified industrial group, which is engaged in the manufacturing, transportation, storage of chemicals, and processing of hazardous waste. It operates under three segments, namely Chemical Manufacturing, Warehousing and Distribution and Environmental Solutions. Since IPO, DGL’s reliance on key customers has reduced – Top 5 customers now representing ~26% of total revenues (from ~43% at IPO). Kalkine’s Resources Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

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

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~61.99% of the total shareholding. Henry (Simon) and Spalding Holdings Pty. Ltd. are holding maximum stakes in the company at ~53.08% and ~2.86%, respectively.

1.4 Key Metrics: In H1 FY23, underlying EBITDA jumped 30% YoY. Below is captured other metrics showing the trend of revenue and net income over the past five years:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Business Updates:

 (Source: Company Filings; Analysis by Kalkine Group)

2.2 Results Highlights: Below mentioned are some key financial highlights:   

 (Source: Company Filings; Analysis by Kalkine Group)

2.3 Historical Financial Trend

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

The stock price has increased by ~7% in last 1 month and over the last 6 months, stock price has plunged ~50%. The stock has a 52-week low and 52-week high of AUD 0.645 and AUD 1.905, respectively, and is currently trading close to the 52-week low-levels. DGL was previously covered in a report dated ’9 August 2023’.

 (Source: REFINITIV, Analysis by Kalkine Group)

4.2 Fundamental Valuation

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 20 September 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.

Note 4: Dividend Yield may vary as per the stock price movement.

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.

Disclaimer

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