Yovich & Co. Market Update - 28 April 2021

Apr 28, 2021 | Commentary

28 April 2021

Market Update 2021 04 28

In summary, the NZX50G had 25 companies on the downside, 4 remained unchanged and 21 companies were on the upside. NZ shares fell as a2Milk declined to an almost four year low, as institutional investors are reducing their holdings. Meridian Energy was another lagger declining 5.95% as it continues to suffer after being made a smaller constituent of a global clean energy index. The US market declined slightly last week on news that President Joe Biden is reportedly proposing to double capital gains tax to 39.6% (previously 20.8%) for families earning over $1m per year, while also keeping the investment income taxes at 3.8%. Greater detail is expected out next week. This week the US market is sitting at all-time highs as corporate earnings are announced, so far 4 out of 5 S&P500 companies that have released results, have either met or beaten expectations. A Conference Board measure on Tuesday showed consumer confidence reached the highest since February 2020 as Americans grew more upbeat about the economy and job market. 

 Biggest Movers 20210428

Investment News

Oceania Healthcare

Oceania Healthcare is a leading provider of premium healthcare services. Their purpose is to redefine the aged care and retirement living experience in New Zealand. Oceania has a substantial development pipeline and sufficient land to build 1,851 new residences with 86% of these already consented. As of 31 May 2020, Oceania had 3,600 plus residents, 2,561 care beds and care suites along with 1,285 units spread over 44 sites. Last week Oceania bucked the index trend closing Friday up 5.2% at $1.42. This may have been due to retail investors seeing that senior management had purchased shares at $1.2796 in the capital raise last month.   

Current Share Price: $1.38, Forecasted Gross Dividend Yield: 2.61%, Target Price: $1.68.

AFT Pharmaceuticals

Announced it has signed an exclusive License and Distribution Agreement with Hikma Pharmaceuticals USA (“Hikma”) for

the commercialisation of its Maxigesic IV, an intravenous, opioid free post-operative pain relief medicine, in the United States. The agreement represents the first out license of the Maxigesic family of medicines into the US market. AFT, over the longer-term, is also targeting the US market for the tablet and liquid forms of the medication. AFT will be entitled to upfront, regulatory and commercial milestone payments of up to US$18.8 million as well as a profit share from in market product sales. The milestone payments comprise US$7.5 million of payments due upon certain agreed milestones leading up to and including registration and the first commercial sale of Maxigesic IV in the US. Of these, US$3.6 million will be earned following the signing of the agreement and filing of Maxigesic IV for approval with the FDA. The further milestone payments are payable upon certain sales targets for Maxigesic IV in the US being reached. The US market for post-operative pain management medication, according to independent research, was worth US$745 million in 2019 and is set to grow to US$1.7 billion by 2028.

Current Share Price: $4.52, Target Price: $4.61.

Stride Property Group

Are pleased to advise that they expect distributable profit for the FY21 ending 31 March is to be within the range of 11.30 to 11.50 cents per share (cps) compared to 10.32 cps in the FY20. The increased distributable profit is due to these key factors; higher activity-based fee income from SIML’s growing investment management business, and higher net income after tax, resulting from completed acquisitions of the period. Stride’s annual financial results for the year ended 31 March 2021 are expected to be released 27 May 2021.

Current Share Price: $2.33, Forecasted Gross Dividend Yield: 4.26%, Target Price: $2.39.

Just Life Group

Helping New Zealanders to live a healthy life in a healthy home is the driving vision of founder and CEO Tony Falkenstein. This is done through two distinct but related segments, these being Healthy Living and Healthy Homes. Just life has announced a capital raise of $4.5m via a rights offer (1 new share for 14 currently held) for shareholders as of 4 May 2021 at 70 cents per share. This is a 27% discount to the last closing price of (before the announcement) 96 cents. Funds raised will be used to purchase About Health which is a leading provider of natural dietary supplements in New Zealand, including well-known brands Lester’s Oil and Res-V Ultimate. The acquisition will be immediately accretive to the Group earnings.

Current Share Price: $0.99, Historical Gross Dividend Yield: 3.00%,

NZX Limited

Revenue for the 1Q21 ending 31 March 2021 was up 13.4% at $21m, funds under management revenue was up 13.7% to $4.1m compared to corresponding period.

Current Share Price: $2.08, Forecasted Gross Dividend Yield: 3.00%, Target Price: $1.83.

Synlait Milk

Launches a premium ingredient offering, called “Made With Better Milk”. Made With Better Milk is a value add premium product that is built upon the sustainability credentials of Synlait’s best practice Lead With Pride farming system, integrated manufacturing and supply chain, and people and planet-focused B Corp certified business. Director Sustainability and Brand, Hamish Reid said: “The choices we make about what to eat and drink have a significant impact on the planet and people, which is why today, global consumers are seeking assurances that products are not just healthy, but sustainably, ethically and equitably produced. Our customers have been asking for this and we can now deliver upon the promise.” Made With Better Milk is providing Synlait’s global customers with the opportunity to differentiate the products they market to consumers based on a supply chain that takes better care for people and animals, and generates better outcomes for climate, water, soil, and biodiversity.

Current Share Price: $3.39, Target Price: $3.77.




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Nathanael McDonald

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