VEEM Ltd

This report is an updated version of the report published on 14 November 2024 at 1:58 PM AEDT.

Section 1: Company Overview and Fundamentals Insights

VEEM Ltd (ASX: VEE) is a designer and manufacturer of disruptive, high-technology marine propulsion and stabilization systems for the global luxury motor yacht, fast ferry, commercial workboat and defence industries. Headquartered in Perth, Western Australia, VEEM operates from a 14,700 sqm purpose-built fabrication and manufacturing facility, including Australia’s largest non-ferrous foundry. Kalkine’s Dividend Income Report covers the Investment Highlights, 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 Insights from Management:

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~74.59% of the total shareholding. VEEM Corporation Pty. Ltd. and Perennial Value Management Ltd. are holding maximum stakes in the company at ~50.18% and ~14.97%, respectively.

1.4 Key Metrics: VEEM reported a profitability increase in FY24 driven by growth in propeller sales, defence revenue and accelerated gyro revenue. Subsequently, the Directors have recommended the payment of a final unfranked ordinary dividend of AU$1,045,425 (AU$0.0077 per share) to be paid on or around 20 September 2024. The recommendation is based on 30% of the net profit after tax less the interim dividend of $1,045,040 already paid. Below are captured some metrics:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Business Updates:

2.2 Results Highlights: Below mentioned are some key financial highlights:   

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 price has declined by around 11.41% in 1 month; and in the past 6 months, prices have been corrected around 29.21%. The stock has a 52-week low and 52-week high of AUD 0.605 and AUD 2.020, respectively. VEE was previously covered in a report dated ’17 October 2024’.

 (Source: REFINITIV, Analysis by Kalkine Group)

4.2 Fundamental Valuation

Valuation Methodology: Price/Cash Flow 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 14 November 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.

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.