Perenti Global Limited

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Perenti Global Limited (ASX: PRN) is a diversified global mining services group with businesses in surface mining, underground mining and mining support services. The company was listed on ASX in 1994.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~41.35% of the total shareholding. L1 Capital Pty Ltd and Allan Gray Australia Pty Ltd hold a maximum stake in the company at ~8.34% and ~7.27%, respectively.

1.4 Key Metrics:

During 1HFY22, the company recorded an EBITDA margin of 16.3% against 8.6% in 1HFY21. In addition, it posted an asset turnover ratio of 0.47x as compared to 0.40x in 1HFY21. Below is captured the trend of the asset turnover ratio and the cash cycle days. 

Section 2: Business Updates, Financial Highlights, and Operational Summary

2.1 Business Updates:

2.2 Insights of 1HFY22:

2.3 Operational Summary:

The company experienced continued revenue growth on the back of project ramp-ups, including Zone 5, Savannah, Cowal, Hemlo and Red Chris. In addition, underground Africa continues to perform well in spite of the continuation of COVID-19. Below is the revenue split by industry sector group:

Section 3: Key Risks and Outlook:

Highlighted below are the priorities and focus areas for 2022-2025:

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 not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 17, 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

Kalkine New Zealand Limited is authorised to provide general advice only. The information on this website does not take into account any of your investment objectives, financial situation or needs. Before you make a decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement from the product issuer. You should consider the appropriateness of advice taking into account your own objectives, financial situation and needs and seek independent financial advice before making any financial decisions.