Resimac Group Ltd

Section 1: Company Overview and Fundamental Insights

1.1 Company Overview: Resimac Group Ltd (ASX: RMC) is a non-bank lender and multi-channel distribution business with operations in Australia, New Zealand, and the Philippines. The company is engaged in originating, servicing, and funding prime, non-conforming residential mortgages and asset finance products in Australia and New Zealand. Since 1987, the company has issued mortgage-backed securities worth AUD 42bn in domestic and global markets. Kalkine’s Investor Report covers the Investment Highlights, Management Insights, 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 ~74.82% of the total shareholding. ICM Limited and Motrose Proprietary Ltd. are holding a maximum stake in the company at ~63.16% and ~3.60%, respectively.

1.4 Key Metrics: The company reported a return on equity of 9.9% in 1HFY23 as compared to 3.2% of the industry median. Below is captured the trend of net sales and operating income:

Section 2: Business Updates, Financial, and Liquidity Highlights

2.1 Business Updates:

2.2 Results Highlights of 1HFY23 (For the Period Ended 31 December 2022): RMC issued AUD 1.2bn in RMBS transactions in 1HFY23.

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 has witnessed a jump of ~6.67% in a month, and over the last 6 months, it has gone up by ~3.23%. The stock has a 52-week low and 52-week high of AUD 0.845 and AUD 1.620, respectively and is currently trading below the average of a 52-week high-low average. RMC was last covered in a report dated ’13 April 2023’.

4.2 Fundamental Valuation

Valuation Methodology: Price/Book Value 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 May 01, 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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