Boeing Co – Working Across Industry to Enhance Health Safeguards in Air Travel

Boeing Co (LON: BOE) is operating as an aerospace Company, which develops and markets commercial aircraft and systems for Defense, space and security. 

The Company will announce Q2 results on 29^th July 2020.

Recent News
On 17^th July 2020, British Airways announced that it would be retiring an entire fleet of Boeing 747 jets due to outbreak of covid-19.

Financial Highlights – Q1 Financial Year 2020 (31^st March 2020)


(Source: Quarterly Results, Company Website)
 
The Group reported a significant impact in performance due to COVID-19, as revenue was declined by 26 per cent to USD 16,908 million in Q1 FY20 (Q1 FY2019: USD 22,917 million). The GAAP operation loss stood at USD 1,353 million, while core operating loss (Non-GAAP) stood at USD 1,700 million for the period. The GAAP loss per share stood at USD 1.11, while the non-GAAP loss per share stood at USD 1.70 in Q1 FY20. The Group reported USD 15.5 billion in cash and marketable securities at the end of the first quarter, while debt was USD 38.9 billion. However, Boeing has adopted several measures to manage short-term liquidity such as reducing costs, drawing on a term loan facility, suspending dividend and pausing share repurchase.

Share Price Performance


Daily Chart as of July 20^th, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Boeing Co shares were trading at USD 176.91 at the time of writing before the market close (at 11:54 AM GMT+1) on 20^th July 2020 and down by 2.30% versus the previous day closing price. Stock 52 week High and Low were USD 391.60 and USD 89.20, respectively.

From the technical standpoint, shares were trading below the short-term support level of 20-day simple moving average prices, which reflects a downtrend in the stock and can move down further.

Valuation Methodology

Key Risks

The British Airways and Qantas Airways retiring their fleet of Boring 747 would result in a decline in financial performance in coming days. The grounding of 737 MAX and a steep fall in demand amid the rapidly evolving COVID-19 disruption putting significant pressure over the revenue and profitability. 

Conclusion
The Company has shown a significant decline in the financial performance in Q1 FY2020 due to outbreak of covid-19 and imposed travel restrictions. Not only it impacted financial performance other aspects of business such as production continuity, airline customer demand and supply chain stability were also impacted. The Company has taken several measures to reduce operating costs and postpone expansion plans. Moreover, the Group has decided to restructure the organisation through streamlining roles and voluntary layoff program to reduce the overall staff.

Based on the above rationale, we have given a “Watch” recommendation at the current price of USD 176.91 (as on 20^th July 2020, before the market close at 11:54 AM GMT+1), while we look for any upcoming catalysts in the near term.

Amur Minerals Corp – Largest Potential Contributor to Economy in the Far East in Russia

Amur Minerals Corp (LON: AMC) is a mining company with main focus on the exploration of nickel-copper sulphide mineral in the far eastern part of Russia. The Company’s main mining asset is Kun-Manie situated in the region of Amur Oblast.

Recent News

On 15^th July 2020, Amur Minerals announced that its Investor (Plena Global Opportunities LLC) would pursue fixed-term loan note agreement to convert 26,223,776 warrants at 1.43 pence of the exercise price and Company is provided with £375,000.

Financial Highlights – Financial Year 2019 (31^st December 2019)


(Source: Annual Report, Company Website)
 
For the financial year ending 31^st December 2019, the Company is in the development phase and did not generate any revenue for the period. The Company’s operating loss for FY2019 stood at $1,984 thousand (FY2018: Operating loss of $2,153 thousand), reflecting lower administrative expenses. The Company’s LBT and LAT (loss before tax and loss after-tax) were at $2,329 thousand in FY2019 (FY2018: LBT and LAT of $3,308 thousand). The basic and diluted loss per share for FY2019 stood at 0.33 cents (FY2018: basic and diluted loss per share of 0.51 cents).

Share Price Performance

Daily Chart as of July 20^th, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Amur Minerals Corp shares were trading at GBX 2.28 at the time of writing before the market close (at 1:30 PM GMT+1) on 20^th July 2020 and down by 1.08% versus the previous day closing price. Stock 52 week High and Low were GBX 3.92 and GBX 0.85, respectively.

From the technical standpoint, 14-day RSI is currently in an overbought zone, which means the stock price can fall further in the short term.

Key Risks

The commodity market is extremely volatile, and on the lower side could impact the Company’s financial performance as well as operational performance. The overall business of the Company can be impacted by the changing regulations and policies by the Government.

Conclusion

Since the Company is in the development phase, it does not generate any revenues, and all the operations are financed through its cash reserves and grants. The profitability margins have remained in the negative zone for the period. The Group operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors.
The understanding of the use of nickel by end-users is benefiting the Company to maintain a healthy relationship with its customers and helping them to increase their market share as well. The Company is actively seeking to make an investment in mining opportunities and further optimised the mining schedule.

Based on the above rationale, we have given a "Watch" recommendation at the current price of GBX 2.28 (as on 20^th July 2020, before the market close at 1:30 PM GMT+1), while we look for any upcoming catalysts.

Motif Bio Plc – Actively Seeking for Candidate for Reverse Takeover

Motif Bio Plc (LON: MTFB) is an AIM-listed clinical-stage biopharmaceutical company. In January 2020, Motif Bio is reclassified as cash shell under rule 15 and is required to make a reverse takeover by 28th July 2020.

The Company will release full-year results ending 31^st December 2019 in between 30^th June 2020 to 30^th September 2020.

Selection of Strategic Adviser and Update on Business (1^st June 2020)

Motif Bio announced the selection of Peel Hunt LLP as Company’s strategic adviser. Peel Hunt will also be providing Directors with guidance on strategic initiativeswhich include a selection of appropriateRTO (reverse takeover) candidate. The Company is in negotiations withmultiple RTO candidatesfrom the healthcare sector. The Company expects Covid-19 pandemichas createdseveral new opportunitiesfor the healthcarecompanies, and reverse takeovercandidatesare exploring waysto use the therapeutic productfor Covid-19patients. The last placing helped Motif Bio to raise £650,000 of gross proceeds, which will provide Company with sufficient working capital till February 2021 and Directors are committed to complete reverse takeover in the available time.

Share Price Performance


Daily Chart as of July 20^th, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Motif Bio Plc shares were trading at GBX 0.4252 at the time of writing before the market close (at 1:33 PM GMT+1) on 20^th July 2020 and down by 25.40% versus the previous day closing price. Stock 52 week High and Low were GBX 3.20 and GBX 0.0304, respectively.

From the technical standpoint, shares were trading below the short-term support level of 20-day simple moving average prices, which reflects a downtrend in the stock and can move down further.

Key Risks

If the Directors of the Company were not able to complete RTO in the available time, it would lead to share suspension. As the company operates in multiple geographies, its profits can be impacted negatively due to foreign exchange rate fluctuations. 

Conclusion

The Company’s business performance looks unpromising in the near term. The Group in H1 FY2019 does not generate any revenue and profitability remained in the negative zone. The Company operates in a tough environment which requires constant financing, sometimes at the cost of profitability, to remain at the forefront of competitors. The recent agreement with Hercules and a loan amendment have resulted in the reclassification of the company as cash shell and may result in share suspension if the reverse takeover is not done within next six months. There is no assurance that the company will be able to complete a reverse takeover. Despite the uncertain environment, the Company has sufficient working capital until February 2021.

Based on the above rationale, we have given a "Watch" recommendation at the current price of GBX 0.4252 (as on 20^th July 2020, before the market close at 1:33 PM GMT+1), while we look for any upcoming catalysts.
 
*All forecasted figures and Peer information have been taken from Refinitiv, Thomson Reuters.

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