This report is an updated version of the report published on 25^th August at 7:43 pm (GMT +12)

Rakon Limited

Rakon Limited (NZX: RAK) is a global technology company which designs and manufactures advanced frequency control and timing solutions for a range of applications.

Recommendation Rationale – Sell at NZD 0.89

• RAK is exposed to the risks related to the uncertain market conditions. In FY 2025, it witnessed lower gross profit of $45 Mn, as compared to FY 2024 figure of $57.9 Mn, and lower margin percentage of 43.1% (FY 2024: 45.2%). These decreases were mainly because of the lower order volumes in Telecommunications and Positioning as well as the impact on economies of scale.
• Its underlying EBITDA amounted to $9.5 Mn, in line with the guidance mid-point. If the one-off restructure and transaction-related costs of $3.6 Mn are included, it reported a net loss after tax of $(5.8) Mn.
• However, RAK possesses a strong balance sheet with significant debt capacity for investment into the capital initiatives as well as growth opportunities.

RAK’s Daily Price Chart

RAK Daily Technical Chart, Data Source: REFINITIV

Given its current trading levels, and risks associated, it is prudent to book profit at the current levels.

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of NZD 0.89 per share as on 25 August 2025.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. 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 25 August 2025. 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: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.