The Match Out: ASX drifts, Gentrack (GTK) reports a corker!

The daily Match Out report for Monday 22 May with Market Matters' James Gerrish.
James Gerrish

Market Matters

A softer start to the week with banks weighing on the broader index while strength in the IT sector overseas continued to support our local tech stocks, Xero (XRO) a standout again while WiseTech (WTC) continued its march higher.

  • The ASX 200 finished down -16pts/ -0.22% at 7263
  • The IT sector was best on ground (+1.54%) while Energy (+1.00%) & Healthcare (+0.54%) were also strong.
  • Property (-0.74%) and Communications (-0.62%) the weakest links.
  • Tyro (ASX: TYR) -16.61% fell as Potentia withdraws from change of control talks after a 8 long months of discussions – seems a bit strange.
  • New Hope (ASX: NHC) +0.76% produced saleable coal of 2.03M Tons Vs. 1.54M Q/Q .
  • St Barbara (ASX: SBM) +3.42% was up Silver Lake (SLR) improved its bid to $722 million on Friday night which is a 16.9% premium to Genesis Minerals’ $631 million cash and scrip bid.
  • Gentrack (ASX: GTK) +29% rallied hard on a great 1H23 result plus upgraded guidance – we cover below.
  • BNPL stocks fell on Govt regulation.
  • Iron Ore was ~2.5% lower in Asia today – down for a 2nd straight session – Coal prices were up.
  • Gold was up overnight to ~US$1877 and flat in Asian trade today
  • Asian stocks were up Hong Kong added 1.64%, Japan +0.42% while China was up +0.43%
  • US Futures are down, not by much

ASX 200 Chart - Intra-Day

ASX 200 Chart - Daily

New Hope Corp (ASX: NHC) $5.15

NHC +0.78%: A decent quarterly out today for NHC with EBITDA of $448.1m for the April qtr, up 14.8% QoQ and +20.6% YoY. Production is solid, pricing has been weaker in recent months and needs to turn for NHC to run on the upside, but they’re producing a lot of coal and a lot of cash, and we remain comfortable collecting the associated dividends in the Income Portfolio.

Gentrack (ASX: GTK) $4.13

GTK +29.47%: The one that got away! GTK, the New Zealand-based billing business that powers utilities (water, Gas, Electricity) etc rallied hard on a very strong 1H23 result. Revenue at $84.3m (+48% YoY) was well ahead of forecasts ($73.3m), driven by the Utilities division. Margins were good and expected to be stable while FY24 targets have also been upgraded - GTK now expect revenue of $160m vs ($150m prior). FY24 EBITDA margins are still targeted between 12-17%.

Broker Moves

  • Challenger Rated New Neutral at Goldman; PT A$6.45
  • Medibank Private Rated New Neutral at Goldman; PT A$3.69
  • Nib Rated New Buy at Goldman; PT A$8.80
  • Austal Raised to Buy at Citi; PT A$2.31
  • Metcash Cut to Neutral at Macquarie; PT A$3.90
  • F&P Healthcare Cut to Underweight at JPMorgan; PT NZ$23.20

Major Movers Today

Have a great night

The Market Matters Team

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James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

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