Nickel Industries Limited

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Nickel Industries Limited (ASX: NIC) is engaged in the production of nickel pig iron (NPI) and nickel ore. NPI is a key ingredient in producing stainless steel. The company’s operations mainly include Hengjaya Nickel and Ranger Nickel rotary kiln electric furnace (RKEF).

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~56.82% of the total shareholding. Decent Investment International Pte. Ltd. and PT Karunia Bara Perkasa hold a maximum stake in the company at ~11.28% and ~6.63%, respectively.

1.4 Key Metrics:

During 1HFY22, the company recorded a current ratio of 3.61x against 2.24x of the industry median. Below is captured the trend of the return on equity and debt-to-equity ratio:

Section 2: Business Updates and Financial Highlights

2.1 Business Updates:

2.2 Insights of 3QFY22: The company’s key highlights of the quarter are as mentioned below:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

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 November 16, 2022. 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.

Disclaimer

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