Qualitas Limited

Section 1: Company Overview and Fundamentals Insights

Company Overview: Qualitas Limited (ASX: QAL) is a real estate investment management company offering a wide-ranging investment solution for their retail, wholesale, and institutional clients. Company's operations are segmented into 2 divisions; Direct Lending and Funds Management, focusing upon real estate private credit, income-producing commercial real estate, opportunistic real estate private equity, and built-to-rent residential. Kalkine’s Growth Report covers the Investment Highlights, Key Financial Metrics, Risks, and 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 ~69.83% of the total shareholding. Schwartz (Andrew) and ACS Qualitas Management Pty. Ltd hold maximum stakes of 23.84% and 22.40%, respectively. 

1.4 Key Metrics: QAL’s ROE improved from 3.0% in H1 FY23 to 3.5% in H1 FY24. Below is captured other metrics:

Section 2: Financial and Operational Highlights

2.1: 1HFY24 Results Highlights (for the 6 months ended 31 December 2023): Below mentioned are some key financial highlights:   

2.2 Historical Financial Trend

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

The stock has witnessed an upside of ~7.27% in the last six months, and over the past one year, it decreased by ~14.80%. The stock has a 52-week low and 52-week high of AUD 2.070 and AUD 2.770, respectively, and is currently trading below the 52-week high-low average. QAL was last covered in a report dated ’18 March 2024’.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings 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 11 June 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.