finnCap Research Company Notes - 24 February 2020
Feb 24, 2020 / News
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Sector: Mining
Gemfields (GEM) : Corp
Lusaka emerald auction results
Key data
- Share price (p) 10.7
- Target price (p) 42.0
- Market cap (£m) 135.6
- Enterprise value (£m) 1.3
Gemfields has announced the results of its first auction of 2020. This was of commercial grade emerald and was held in Lusaka, Zambia last week. Revenue generated was US$11.5m which is in line with expectations. The average price realised was US$4.01 per carat which was slightly below the price achieved in recent sales. The auction saw 29 companies bidding for 25 lots, of which 19 were sold (76%). We retain our target price of 42p.
Martin Potts
020 7220 0544
Sector: Industrial Technology
Trackwise Designs (TWD) : Corp
Significant production order won with EV manufacturer
Key data
- Share price (p) 91.5
- Target price (p) 180.0
- Market cap (£m) 13.5
- Enterprise value (£m) 13.2
The company has won its first production order for its unique proprietary flexible printed circuit board technology, Improved Harness Technology (IHT). It is an initial order worth approximately £0.6m. It is highly significant as it highlights a huge potential market segment for the group’s IHT product. We consider the share price is materially undervalued compared with our 180p price target and that today’s announcement should provide a boost to the shares.
David Buxton
020 7220 0542
Sector: Technology & Telecoms
Quartix (QTX) : Corp
Fleet progress builds a firm base for future growth
Key data
- Share price (p) 435.0
- Target price (p) 475.0
- Market cap (£m) 208.1
- Enterprise value (£m) 201.3
FY 2019 is in line with last month’s trading update; the ongoing withdrawal from low-margin Insurance telematics being offset by excellent growth in Fleet which is now >80% of group business. New Fleet installations jumped 39% to 43,837 and clients grew 24% to 16,394. Continued investment in the US and France saw total subscriptions jump an impressive 37% and 36% respectively, while UK growth has accelerated again to 16%. Significant enhancements to web and mobile applications have supported a recent rollout across Europe; in Poland, Spain, Italy and Germany. Insurance continues to decline in line with the strategy of avoiding highly competitive contracts. The high levels of recurring revenue make an excellent base for future Fleet growth in the new and existing territories with a strong start to the year in all markets. We lift our TP to 475p.
Lorne Daniel
020 7220 0545
Sector: Life Sciences
Tristel (TSTL) : Corp
Interims underpin FY outlook
Key data
- Share price (p) 395.0
- Target price (p) 375.0
- Market cap (£m) 176.0
- Enterprise value (£m) 171.9
Tristel reported interim results that were c.7% above the trading update at its AGM on 17 December with adjusted pre-tax profit of £3.0m (+25%) driven by a 22% (22% CER) increase in revenues. Stripping out the impact of recent acquisitions, underlying growth was still a robust 13%. Despite the strong first half and potential for a “COVID-19 bonus” in H2, we are not making any changes yet, recognising instead that current FY forecasts are underpinned. We are however, increasing our target price to 375p, cognisant of the upside potential that international growth offers as well as quality and momentum of growth. On current forecasts, this would imply a prospective 3.5% free cashflow yield.
Mark Brewer
020 7220 0556