Tharisa Plc

Tharisa Plc (LON: THS) is an investment holding company. It has controlling interests in platinum group metals (PGM) and chrome mining, processing operations and associated sales and logistics operations.

On 27 May 2021, the Company will release its interim financial results for the financial year 2021.

Investment Highlights – Expensive at GBX 146.65

• Although the long-term opportunity for the Company is significant, the near-term outlook is highly uncertain and unstable.
• Currently, the stock is trading near the 52-week high, suggesting that the upside potential might be limited.
• From the technical standpoint, 90-day RSI is currently supporting downward movement (around 60.17 level), which means the stock price could decline in the short term.

Key Risks

• The Global Covid-19 pandemic could result in the suspension of operations and increased labour absenteeism, and thus, the operation costs.
• Moreover, there are several associated financial risks such as fluctuation in the foreign exchange & interest rates, availability of adequate working capital and credit defaults.

Production Update (for the second quarter FY2021 ended 31 March 2021, as on 13 April 2021)

(Source: Company Website)

• During the quarter, the average PGM basket price surged by 37.1% QoQ, while it was also up by 80.5% YoY.
• PGM production for Q2 FY21 increased by 11.5% YoY on a 6E basis, but it was 8.9% lower than from the earlier quarter.
• Chrome concentrate production for Q2 FY21 rose by 15.5% YoY (excluding third party), while it was marginally lower than Q1 FY21.
• Specialty grade chrome production for Q2 FY21 surged by 11.8% YoY.
• At the end of the quarter, Tharisa had a cash balance of USD 73.1 million and a debt of US$41.7 million, reflecting a positive net cash position of USD 31.4 million.

One Year Share Price Chart

 (Source: Refinitiv, Thomson Reuters)

Conclusion

In FY21, the Company expects PGM production to be in the range of 155 koz to 165 koz (on a 6E basis) and chrome concentrate production to be between 1.45 Mt and 1.55 Mt. THS saw an exceptional safety performance in Q2 FY21, supported by the solid production. With the higher commodity prices, the Company has converted production into cash flow and increase in the net cash balance. Moreover, the Vulcan plant remains on track for construction and would be completed in this financial year. Further, Tharisa has entered H2 FY21 on track to meet the production guidance and is hence providing a solid platform for further medium-term growth. In the short term, the Company may face emerging headwinds and cost pressures. Furthermore, the prolonged impact of the COVID-19 outbreak continued to affect its financial results, plans, operations, outlook, goals, reputation, liquidity and stock price. The stock made a 52-week low and high of GBX 46.00 and GBX 151.50, respectively.

Based on the factors as highlighted above, we believe the stock of Tharisa Plc is looking “Expensive” at the current price of GBX 146.65 (as on 15 April 2021 at 10:27 AM GMT).

Finncap Group Plc

Finncap Group Plc (LON: FCAP) is an AIM-listed investment adviser and broker Company. It focuses on providing financial services expertise to ambitious growth companies.

In July 2021, the Company will release its FY21 results.

Investment Highlights – Expensive at GBX 42.05

• The Company’s Debt/Equity ratio for H1 FY21 stood at 0.64x, which is higher than the industry median of 0.14x.
• In H1 FY21, the profitability margins are lower than the industry median.
• The Company is dependent upon funding through external sources to run its business operations.
• The Company has lower liquidity in H1 FY21 (compared with industry median), with a current ratio of 1.78x, reflecting insufficient current assets to pay its short-term obligations.
• Currently, the stock is trading near the 52-week high, suggesting that the upside potential might be limited.
• From the technical standpoint, 14-day RSI stood at ~88.79 (overbought zone), which means the stock price could decline in the short term.

Key Risks

• Bad financial advice would impact the Company’s reputation.
• Political uncertainties and macroeconomics headwinds may continue to impact the current business environment and investor sentiment.
• Liquidity and interest rate risks could affect the financials of the Company.

Trading Update (as on 7 April 2021)

(Source: Company Website)

• In FY21, the Company expects unaudited total income to be around £47.3 million, an increase of 83% over the previous year.
• It stated that March 2021, performance has been stronger than anticipated across all parts of the Group.

One Year Share Price Chart

 (Source: Refinitiv, Thomson Reuters)

Conclusion

In March 2021, the Company saw a strong performance and has also surpassed expectations. It completed the £83.8 million IPO of Parsley Box Plc, acted on secondary equity issues raising £66 million, and advised on several private M&A transactions. Further, the Company expects a healthy pipeline in the first quarter of 2022. The Company has a strong business model, while the market is highly uncertain. Presently, the company is trading near its 52-week high, raising doubts about its upside potential at current prices. The stock made a 52-week low and high of GBX 14.90 and GBX 42.05, respectively.

Based on the factors as highlighted above, we believe the stock of Finncap Group Plc is “Expensive” at the current price of GBX 42.05 (as on 15 April 2021 at 12:11 PM GMT).

*Dividend Yield may vary as per the stock price movement.

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