Summerset Group Holdings Limited

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Summerset Group Holdings Limited (NZX: SUM) is the third-largest operator and the second-largest developer of retirement villages and aged care facilities in New Zealand. The company provides broader living options and care services to more than 7,100 residents. Kalkine’s Investor Report covers the Key Financial Metrics, Risks, Outlook, 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 have been highlighted in the chart, which together form ~26.95% of the total shareholding.

1.4 Key Metrics:

The company reported gross margin of 90.6% and EBITDA margin of 11.3% in FY 2022. Further, the company posted Debt/ Equity ratio of 0.49x in FY 2022. SUM is expecting that development margins would return to be within the 20- 25% range over the medium term.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

2.2 Financial Highlights:

Section 3: Key Risks and Outlook:

3.1 Dividend History: The company’s board declared a final dividend of 11.6 cents per share.

Section 4: Stock Recommendation Summary:

The stock has witnessed a fall of ~15.11% in six months and, over the last one year, it has decreased by ~27.7%. The stock has a 52-week high and 52-week low of NZD 11.89 and NZD 8.34, respectively.

4.1 Recommendation

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 April 17, 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.

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 unfavorable movement in the stock prices.

Disclaimer

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