The Match Out: Local shares show some ticker, Megaport (MP1) burns shorts

• The ASX 200 finished up +104pts/ +1.50% at 7108
• The Tech sector (+2.60%) was the best on ground for the second consecutive day today
• Real Estate (+1.94%), Consumer Discretionary (+1.88%) and Materials (+1.86%) were the other notable gainers.
• All sectors closed higher, though Staples (+0.65%), Healthcare (+0.73%) and Utilities (+0.95%) were the only t=here that put on less than 1%.
• Megaport (ASX: MP1) +33.78% upgraded guidance for FY23 and said there’s likely more to come in the new financial year at their results next month. More on that below.
• Bowen Coal (ASX: BCB) flat sold a 10% stake in the Broadmeadow East mine for $13m + royalties and brought in a capital partner for the project. The deal frees up the balance sheet to put money to work across their other projects.
• InvoCare (ASX: IVC) +1.69% gave PE firm TPG Capital another week to firm up their $13/sh takeover offer for the funeral home business.
• Chorus (ASX: CNU) -0.26% NZ telco 4Q connections update was broadly in line, flagging a $7m hit to EBITDA as a result of the floods earlier this year, though repair & replacement capex is likely to be higher in FY24 as well.
• Iron Ore was surprisingly lower -0.5% in Asia, though BHP, FMG and RIO were all more than 1% higher.
• Gold was tracked higher in Asia, adding $US8/oz in the last 24 hours. Gold stocks were heavily featured in the top gainers today, led by Bellevue Gold (BGL) +15.22%.
• Asian stocks were all higher, though the Nikkei (+0.04%) underperformed China (+0.45%) and the Hang Seng (+1.3%)
• US Futures are pointing to 0.25% gain on the S&P500 when the market opens tonight.

ASX200 chart

Megaport (ASX: MP1) $8.99

MP1 +33.78%: network connectivity business Megaport saw shares rocket to a 9-month high today on a small upgrade to FY23 earnings and a strong runway into FY24. The business went through an aggressive cost-cutting program in FY23 which looks to be bearing fruit earlier than thought under the guidance of a new CEO just 8 weeks into the role. Normalized EBITDA is now expected to be between $19-21m, up 17% at the midpoint while also confirming they were net cash positive in Q4 despite $2.6m of redundancy payments due. Given the progress, Megaport said it is likely to upgrade FY24 guidance (EBITDA of $41-46m) at their FY23 results next month, and they have cancelled an expensive $25m debt facility with HSBC. More than 6% of MP1 shares were held short-sold before the announcement also supporting the squeeze higher.

Megaport (ASX: MP1)

Broker Moves

• APA Group (ASX: APA) Raised to Overweight at JPMorgan; PT A$11.20
• Hot Chili (ASX: HCH) Raised to Buy at Cormark Securities; PT A$2.27
• Integral Diagnostics (ASX: IDX) Cut to Underweight at Morgan Stanley
• De Grey Mining (ASX: DEG) Rated New Overweight at JPMorgan; PT A$1.60

Major Movers Today

Have a great night

The Market Matters Team

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