ANALYST OUTLOOK FOR 2021 - Our analysts share their outlook and top stock picks for 2021 - Bell Potter Client Access
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
ANALYST OUTLOOK FOR 2021.
Our analysts share their outlook and top stock picks for 2021.
DECEMBER 2020To learn more about the stocks mentioned in this CONTENTS
report, speak to your adviser or refer to the Client BANKS & GENERAL INSURERS 3
Access Research Library. DIVERSIFIED FINANCIALS & FINTECH 4
LISTED INVESTMENT COMPANIES &
Please note that Speculative securities may not be LISTED INVESTMENT TRUSTS 5
suitable for retail clients (refer to final page of this AGRICULTURE & FMCG 6
report). TECHNOLOGY 7
DISCRETIONARY RETAIL 8
www.bellpotter.com.au ENGINEERING & CONSTRUCTION 9
1300 0 BELLS (1300 023 557) INDUSTRIALS 10
info@bellpotter.com.au HEALTHCARE 13
EMERGING COMPANIES 17
RESOURCES & ENERGY 18
HYBRIDS 22
DISCLAIMER & DISCLOSURES 23BANKS & GENERAL INSURERS TS Lim
Our 2021 top three picks once Macquarie Group (MQG) ANZ Banking Group (ANZ) Auswide Bank (ABA)
again possess proven risk MQG remains our top sector pick. ANZ remains our top major bank pick. ABA provided an upbeat four month
management capabilities, Looking past the COVID-19 noise, this FY20 performance may have been trading update with earnings
defensive qualities including longer term “Cash and Growth” story impacted by large notable items and momentum having further strengthened
remains intact. The way MQG’s business COVID-19 provisions but underlying since the end of 1Q21 and performance
healthy balance sheets and model is split across annuity-style and performance was sound and included indicators that are sector-beating.
surplus capital that could be markets-facing activities – respectively a better outcome in 2H20 – driven by Statutory NPAT increased by 34% and
returned to shareholders in 70% and 30% of net profit contribution stable income and lower expenses this was driven by lending and deposit
due course, and strong growth – strengthens resilience in withstanding resulting in positive “Jaws”. Good volume growth ahead of system growth,
prospects. market volatility and improves flexibility organic capital generation enabled the higher NIM, good cost management and
in being able to capitalise on higher bank to resume paying dividends. With what we infer to be lower provisions.
These companies have undergone risk-adjusted return opportunities when a normalised target payout ratio lower Incremental performance per work day
massive transformation since the operating conditions normalise. MQG than those of its peers, we believe there has also improved, likewise loan book
GFC to improve earnings quality and also enjoys strong capital adequacy with is greater upside for ANZ to increase and deposit productivity. This represents
consistency. Our selection comprises a 12.5% pro-forma CET1 ratio at the end dividends and especially when APRA a dream start to FY21 that should
one diversified financial (MQG), one of 1H21 (~$6.7bn surplus capital based relaxes its current payout restriction. comfortably ensure an unbroken track
major bank (ANZ) and one regional on 10.5% RWA or ~$19.00 per share) Credit provisions are higher than record for ABA in generating profitable
bank (ABA). The longer term operating due to strong organic capital generation the sector average and support the growth. All FY21 targets are set to be
environment post COVID-19 remains and efficient asset utilisation. potential for write-backs. exceeded.
positive for MQG (a leader in global Buy, price target $150.00 Buy, price target $24.50 Buy, price target $6.70
asset management and infrastructure/
green investments), ANZ and ABA
(both well-provisioned and well-
placed to capitalise on post-pandemic
opportunities in retail and SME
banking).
ANALYST OUTLOOK FOR 2021. 3DIVERSIFIED FINANCIALS & FINTECH Lafitani Sotiriou
Life360 (360) Afterpay (APT) Laybuy (LBY) Praemium (PPS)
Life360 is our top pick. Life360 is carving APT remains a key pick in our coverage. An emerging BNPL provider, with a strong PPS is our preferred choice in the
out a significant global footprint, with a We see a significant pipeline of catalysts market position in NZ and rapidly growing platform space. Following the acquisition
family safety app at its core. The company which will support growth moving forward. presence in the UK. The business has of its competitor, Powerwrap (PWL),
delivered a significant membership These include further integration with small operations in Australia with the the company is now positioned as a
feature launch in the middle of 2020, other key e-commerce and payment US set to launch in April next year. The meaningful presence of scale among
and the benefits of this are set to flow infrastructure players in the market, company is achieving rapid GMV growth, its competitors. Much of the headwinds
through over the medium-term. As a further growth in customers and GMV closing out 2020 with around 200% GMV that PPS faced in the past are coming to
location sharing app, we see this as a in the US and UK as spending ramps growth versus pcp. It is one that isn’t well an end. Moving forward, PPS will enjoy
COVID recovery stock, as when people up ahead of Christmas, a healthy Net followed, but where we see significant cost synergies through to FY22, a more
start moving around again (particularly Transaction Margin (with bad-debts opportunity. This pick comes with a diversified client base given PWL’s reach
in the key US market), we anticipate the remaining low) to continue into 2021 Speculative Risk warning. in the High Net Worth Individual market
usage to increase. Despite COVID, the and commentary on progress made with segment, improved inflows, international
company grew its memberships and regard to its international expansion. Challenger (CGF) reach, improved liquidity and a more
Monthly Average Users throughout 2020 Pleasingly, ASIC’s second report and We believe CGF is a post-COVID-19 flexible balance sheet. PPS is also set
and hit cashflow breakeven in the June recent commentary by the RBA on recovery stock. Much of the risks around to enjoy positive mark-to-markets in the
and September quarters. Australia’s Buy Now Pay Later (BNPL) the Life Company’s balance sheet have December 2020 quarter given recent
sector have both been supportive been reduced given a COVID-19 recovery equity market gains.
Pendal Group (PDL)
and suggest no new regulations are is imminent. With investment experience
PDL is set to enjoy meaningful positive being recommended. This should set a likely turning positive in 1HFY21, CGF
mark-to-markets in the December precedence for markets APT currently should be able to redeploy capital in more
2020 quarter given recent strength in operate in and markets APT are attractive investments over the coming
global equity markets and is benefiting establishing a presence in. year, thus improving margins. CGF is
from a relative fund performance spike. already showing signs of improvements
More importantly, we expect a return throughout its business given stronger
in performance fees from Jo Hambro sales in its Life business and robust
which could reach $50m for CY20, which net-flows from its Funds Management
compares to less than $1m last year. PDL business as reported in its September
is a key beneficiary of a post-COVID-19 2020 quarter update. CGF is also set to
recovery, especially as sentiment returns gain from favourable superannuation
in European markets. PDL continues to reform given the integration of Lifetime
look attractive, trading at relatively low and deferred annuities in superannuation
multiples, and pays healthy dividends at a pension phase.
yield over 6%, at current prices.
ANALYST OUTLOOK FOR 2021. 4LISTED INVESTMENT COMPANIES & Hayden Nicholson
LISTED INVESTMENT TRUSTS
2020 has cemented the idea MFF Capital Investments Limited (MFF) L1 Long Short Fund (LSF) WAM Alternative Assets (WMA)
of market dislocations, with MFF’s primary focus is to invest in large LSF is a Listed Investment Trust that WMA currently invests in a diverse range
many LIC/LITs trading at an listed international companies where the aims to deliver positive absolute returns of alternative assets, including but not
unprecedented discount to manager has identified and monetised while seeking to preserve capital over limited to: private equity, real estate and
their Net Tangible Assets (NTA). attractive business characteristics at a the long-term (being a period of more cash. Previously affiliated with BSAAF
discount to assessed intrinsic values. than 5 years). The company’s portfolio Management Pty Ltd, the managerial
Observing such trends may As at 30 November 2020, the fund has is comprised of both long and short transition to Wilson Asset Management
provide access to leading and generated a total shareholder return positions in Australian and New Zealand International Pty Ltd (WAMI) occurred
renowned investment managers (including net dividends) of 17.5% securities, with the added capacity to in October 2020 following allegations of
at a price under cost. p.a. over the past 10 years. During invest in global securities up to 30% of asset over-valuation, which ultimately
this same time, the benchmark MSCI gross exposure. The manager actively resulted in the stock trading at a
We remain positive into 2021, even World Index (AUD) returned 13.2% p.a. seeks to identify mispriced securities persistent and substantial discount to
though the arithmetic average discount The Portfolio is highly concentrated, through a fundamental assessment of NTA. This had materially tightened to
across Domestic Equity, Global Equity insofar as the underlying constituents valuation, quality and leverage. As at -11.5% by 31 October 2020. WAMI, by
and Alternative Strategy mandates has are top-heavy. Major holdings as a 30 November 2020, the benchmark- way of appointment, has also agreed
tightened considerably post March 2020. percentage of investment assets and agnostic fund had recorded a 12 month to implement a ‘Premium Target’
While COVID-19 has produced a difficult cash for November were Visa (18.1%), total shareholder return of 23.0%. LSF objective, which would see shareholders
landscape for income investors and risk- MasterCard (16.4%), Amazon (9.3%) and traded at a -14.5% discount to the pre-tax empowered to vote on wind-up should the
averse individuals to traverse, the sector Home Depot (9.1%). MFF continues to NTA for this same time. This has since shares fail to trade at a premium relative
continues to provide sustainable yield and see large profitable realisations, with widened to -18.4% as at 8 December to pre-tax NTA. With further uncertainties
strong diversification benefits. $129.4m in taxes paid for FY20. While this 2020. The fund notably acquired some such as trade war escalations and
creates a drag on NTA, shareholders will sound companies during the widespread additional lockdowns, alternative assets
ultimately benefit from the pass through sell-off during March, giving rise to an exhibit highly favourable characteristics
of franking credits attached to future increasing net exposure. Recent vaccine such as low correlation to equity markets
dividends. MFF paid a 3 cent fully franked announcements, protracted low interest and strong annuity-style income returns.
final dividend in respect to 30 June 2020, rates and large global monetary/fiscal Portfolio Manager Dania Zinurova
a 50% increase from the previous year; stimulus provide a positive backdrop for recently highlighted new property
with the company either maintaining further equity rallies; and in particular asset investment opportunities within
or increasing the amount of annual net stocks that were previously sold-off for infrastructure, particularly from the
dividends (excluding special) paid for the non-fundamental reasons. Key share healthcare sector with leases and rents
last 9 consecutive years. We calculate price performances from the long that may be set to benefit from global
MFF’s indirect cost ratio at 0.44% with no portfolio included Unibail-Rodamco- trends such as an ageing population.
attributable performance fees. Westfield (73.1%), Webjet (65.3%) and Should commodity prices continue to
Empire State Realty Trust (61.0%) for the surge, exposure to alternative assets
month of November. may also serve as a hedge to cost-push
inflation.
ANALYST OUTLOOK FOR 2021. 5AGRICULTURAL & FMCG Jonathan Snape
Investments in the Agricultural Inghams Group (ING) Costa Group (CGC) Elders (ELD)
& FMCG sector should be ING is a leading vertically integrated CGC is Australia’s largest horticultural ELD is a leading supplier of fertiliser,
considered high risk and come poultry producer (from stock feed to company with diversified operations agricultural chemicals and animal
with volatility. For this reason we end products) with a market leading across the supply chain from farming health products to rural and regional
position in Australia and the number 2 and packing to marketing and Australia, with strong agency positions
tend to focus on stocks where we participant in New Zealand. distribution. in livestock, wool and real estate.
see either: a structural uplift in
We see ING as a second derivative Our favourable view on CGC is driven The recent share price of ELD has
ROIC through the cycle, cyclical beneficiary of improved seasonal by: (1) expansion and maturation of benefited from rainfall and strong
growth stories, or counter- conditions, lifting Australian grain the international berry operations; (2) cattle prices . However, we continue
seasonal crop exposures. production. We have seen the maturation of the avocado orchards to see upside to consensus FY21-22e
normalisation in cropping volumes drive resulting in lower per unit costs and earnings reflecting the annualised
Our key commodity calls for 2020 were: a rapid contraction in Australian wheat stronger volumes at a time of elevated benefit of the AIRR acquisition (and
(1) the unwinding of the drought induced prices, which should result in a material pricing; (3) non-recurrence of seasonal synergy realisation), a normalisation in
dislocation between domestic cattle contraction in feed costs from 4Q21e for factors impacting the citrus, tomato the summer crop (sales flow in 1H21e),
prices and export meat prices; and (2) a ING. This tailwind in lower feed costs and berry operations in CY19-20 (i.e. gains from integrating three generic
normalisation of domestic grain prices is likely emerge as COVID-19 related drought, bush fires, hail and fruit portfolios across the combined ELD
to international benchmarks. Both of demand headwinds from 3Q20-1Q21 are fly); and (4) completion of the GH4 + AIRR business (and from migrating
these dynamics have now largely played likely to be reversing. To this end we see expansion. In the near term we also see independents onto the AIRR platform);
out and as we look to 2021 we see main FY21-22e as likely to be characterised by CGC as a beneficiary of stronger YOY and continued business investment
themes as being: (1) elevated domestic improving returns for ING. pricing comparisons YTD across the (which traditionally has averaged ~$40m
grain production continuing to generate majority of the portfolio. pa at 3-5x EBIT).
favourable grain spreads for domestic
users and traders; and (2) a rotation to
late cycle drought recovery plays that
should benefit from lower water costs
and higher yields. Key stocks we see
leveraged to this as at December 14
include:
ANALYST OUTLOOK FOR 2021. 6TECHNOLOGY Chris Savage
We continue to be positive on the Uniti Group (UWL) Adacel Technologies (ADA) Technology One (TNE)
technology sector in Australia as, Uniti is a constructor, owner and Adacel is a leading global provider of Technology One is a provider of
in an environment of low interest operator of private fibre networks simulation and control systems for the ERP (enterprise resource planning)
rates and low growth, we believe and also a provider of value-add civil aviation and defence sectors. The software in Australia, New Zealand,
there are a reasonable number of telecommunications services in company generates around three- Asia Pacific and the UK. The key
good quality stocks in the sector identified niche markets. The quarters of its revenue from services competitive advantage of the company
company has grown rapidly through – which is recurring and underpinned is it has developed a fully integrated
with reasonable to strong growth
both organic growth and a number by long term contracts – and around SaaS solution of its software and
outlooks. of acquisitions over the past 18 one-quarter from the sale of systems is now switching customers to this
What has changed, however, is many months and just recently acquired (which can be lumpy and cause some solution. The migration is now >50%
stocks in the sector have had a strong key competitor Opticomm which volatility in total revenue). Adacel has complete and Technology One is
re-rating over the past year or more significantly strengthens its market already upgraded its FY21 guidance starting to reap the benefits of greater
and we are struggling to find quality position. We are positive on the once – it now forecasts PBT b/w $6.5- recurring revenue – through the sale of
stocks that we believe still represent outlook for the combined company 7.0m – and we believe there is some more products – and a higher margin
value. We believe value is important in given the strong pipeline and also the chance of another upgrade sometime (through economies of scale). This
the current environment as if a number potential for synergies to be greater in 2HFY21. The company has net cash combination will in our view drive
of vaccines are successfully developed than flagged. We also see the stock of several million dollars and has double digit earnings growth for years
and distributed in 2021 then there is as a potential takeover target over the flagged it intends to commence a share to come and, while not cheap, makes
likely to be a general switch out of next six to twelve months. The stock buyback. The stock looks value on an the FY21 PE ratio of around 40x look
tech stocks into more cyclical stocks looks reasonable value on an FY22 EV/ FY21 PE ratio of around 14x (based on reasonable. The company also has net
and there will be less downside risk EBITDA multiple of around 10x (based current share price of $0.95). cash of well over $100m which provides
for those tech stocks that represent on current share price of $1.45). the potential of special dividends and/
Buy, price target $1.15 or a share buyback.
relative and/or absolute value. Buy, price target $1.85
Hold, price target $10.00
ANALYST OUTLOOK FOR 2021. 7DISCRETIONARY RETAIL Sam Haddad
It has been an unprecedented year for the discretionary retail sector on the back of the City Chic Collective (CCX) Domino’s (DMP)
pandemic, with retailers having to grapple with significant disruption/uncertainty with respect CCX is a global multichannel retailer, with DMP is Domino’s largest franchisee outside
to consumer demand, supply chain flow, store trading restrictions, rental commitments, and circa two-thirds of sales online, specialising of the USA. It holds the Master Franchise
liquidity position. Retailers with strong management teams and flexible business models, in plus-size (size 14+) women’s apparel, licence to the Dominos brand and network
along with the support of government subsidies, have to date successfully navigated through accessories and footwear. It is a collective for Australia, New Zealand, France,
these uncertainties. In many cases, these retailers have emerged in a stronger position, of customer-led brands including City Belgium, the Netherlands, Germany, Japan,
particularly with respect to online capability, cost structure (reduced rents agreed with Chic, Avenue and Hips & Curves. City Chic Denmark and Luxembourg. Across these
landlords), and balance sheet liquidity (successful inventory sell-through or equity raising). appeals to fashion-forward women and its markets, DMP currently operates >2,700
With this, along with further macro stimulus (income tax cuts), the listed retail sector as a multichannel model comprises: a network franchised and corporate owned stores, with
whole has experienced a strong rally over the past six months. Another key tailwind for the of ~90 stores across Australia/New Zealand; a target of 5,550 stores by FY25-FY33. This
sector has been flight travel restrictions, which has seen retailers enjoy a larger share of multiple websites operating in Australasia equates to ~2x organic expansion versus the
consumer discretionary spend. and USA; and marketplace and wholesale company’s current store footprint, plus the
While we expect CY2020 to finish strongly, we are cautious on the outlook for CY2021. Key partnerships in the USA and Europe. Avenue company remains active in pursuing suitable
reasons include: 1) continued risks surrounding the pandemic; 2) the significant stimulus and targets value-conscious women and Hips Domino’s acquisitions. Amongst DMP’s
sales pull-forward that needs to be cycled (especially from April onwards); 3) the expected & Curves is an intimates brand; both are current territories, Germany and Japan are
resumption of flight travel (means discretionary spend will reverse back towards travel); and online only with a significant customer key large growth markets which continue to
4) the current elevated valuation multiples. following throughout the USA. Led by a go from strength-to-strength. Germany is
Two retail stocks that we believe have emerged in a stronger position, have ample levers strong management team and equipped with now leveraging off TV advertising under one
to continue growing despite the noted macro headwinds in CY2021, and yet trade on a strong online presence / flexible business brand, with rising brand awareness driving
undemanding valuations, are AX1 and CCX. On the larger cap end we like DMP, albeit the model, CCX is navigating successfully market share growth in a highly fragmented
stock trades on higher valuation multiples given its significant long-term growth prospects. through the pandemic. The company market. In Japan, DMP is successfully
continues to build traction in the significant changing consumer habits towards more
Accent Group (AX1) USA market, with Avenue.com resonating frequent pizza consumption rather than
AX1 is an investment holding company which owns & operates a number of footwear strongly in the current environment and City just seasonally. At DMP’s recent AGM,
businesses in the performance, comfort and active lifestyle sectors. AX1’s growth strategy Chic USA beginning to benefit from cross- the company revealed continued robust
is to drive innovation in its core business and expansion through new concepts and small selling with Avenue. With ~$110m in net performance notwithstanding disruption
targeted acquisitions. Today the company has a leading omni-channel capability with The cash, CCX is also poised to acquire brands/ from COVID. Overall, we believe DMP has
Athlete’s Foot, Platypus, Skechers and Hype as its key footwear retail platforms. AX1 also has businesses to accelerate its international significant long-term growth prospects with
a number of new footwear concepts including PIVOT, Stylerunner and The Trybe. We believe expansion. Europe, Japan and acquisitions the major
management has steered the company exceptionally through the pandemic, underpinned by drivers.
a quick adoption to online as top priority, successful negotiations with landlords/suppliers,
effective cost management and the successful unwind of excess inventory. We believe AX1
has emerged as a stronger retailer across online capability, vertical product presence, rental
terms, balance sheet strength, as well as levers to drive growth (store network and online).
Based on these factors, we believe AX1’s valuation is undemanding with FY21 PE of ~16x. AX1
also offers an attractive FY21 fully franked yield of ~5%.
ANALYST OUTLOOK FOR 2021. 8ENGINEERING & CONSTRUCTION Steven Anastasiou
After a rocky beginning to the year in light of the coronavirus pandemic GR Engineering Services (GNG)
and associated lockdown measures, the outlook for the Engineering & GNG is one way to gain exposure to
Construction (E&C) sector is becoming increasingly bullish. increased mining investment, with the
company providing E&C services to
This is being driven by both the Resources & Infrastructure sectors, with contract the mining and minerals processing
awards in our BP E&C Index setting new 2020 calendar monthly records in 3 of industries. While GNG’s adjusted FY20
the previous 4 months to October. This culminated in an estimated $1.1bn of new profitability was disappointing, and
contract awards in October, creating a clear V-shaped recovery from the trough of impacted at a statutory level by a large
just $56m in April. bad debt, the company was established
Activity in the Resources sector is being underpinned by strong growth in most in 2006, and has a long history of
commodity prices, which are broadly benefiting from large levels of global currency generating solid free cash flow and
debasement. This is a tailwind that is likely to continue, with a global economic re- delivering material dividends.
opening likely to add further fuel to the fire. With a large order book expected to
With economic stimulus measures putting a further focus on Infrastructure see GNG deliver record FY21 revenue,
projects both large and small, E&C contractors with Infrastructure exposure are we expect that it should deliver a year
also likely to see numerous opportunities to expand their order books in the halves of much improved profitability, and
ahead. with commodity price tailwinds likely
to persist, improved profitability should
continue for several years to come.
ANALYST OUTLOOK FOR 2021. 9INDUSTRIALS James Filius
Johns Lyng Group (JLG) development of La Niña presents potentially deliver annualised acquisition free Rate My Agent profile and generate
potential upside to JLG’s guided CAT related NPATA accretion of ~13.7%- >48,500 property reviews.
Johns Lyng Group (JLG) is an integrated
revenues for FY21. 18.5% in excess of levels currently
building services group that primarily RMY has begun to actively offer its
implied by guidance. This should see PSI
delivers insurance building and 4. Overall we continue to see JLG paid subscription within the US market
re-rate higher as and when acquisitions
restoration services (IB&RS), and as a well-funded and strongly in FY20/21, and is in the early stages
are completed.
commercial building services across positioned business to deliver solid of marketing to Larger Agent Groups
Australia. JLG is anticipated to deliver organic growth during CY21. We Underlying this acquisitive backdrop, we (Teams/Offices/Agencies), completing its
a strong FY21 result, building from a remain confident that JLG has the believe that PSI will continue to deliver first integration into RealtyOne who have
number of contract and insurance panel potential to grow into its multiple positive underlying organic growth ~220 Offices & ~15,000 agents.
wins during the year. We believe that the as it expands into the strata during CY21, which will be supported
We see 2021 as a pivotal year for RMY,
company is well positioned for growth management market, with carefully by rate hardening across a range of
with the company currently in discussion
during CY21, for the following reasons: selected strategic acquisition commercial insurance lines.
with a number of large US brokerage
opportunities in this space likely to
1. JLG entered FY21 with record job Buy, Valuation $3.40ps groups, and believe contract wins should
be highly EPS accretive.
registrations, and the current see the company begin to significantly
RMA Global (RMY)
pipeline of work in hand remains Buy, Price Target $3.60 monetise the US market. Additionally,
high, which should provide the RMA Global (RMY) is an emerging online RMYs new Mortgage Broker offering and
PSC Insurance (PSI)
company with a solid runway into digital marketing business providing new promotor product rollout in 2Q/3Q
2H21. Normalisation of trading in PSC Insurance Group (PSI) is a extensive data on for-sale and sold of FY21 should see broader revenue
JLG’s Commercial Building Service diversified insurance company that residential property, as well as reviews generation occur within Australia.
(CBS) division should also boost acquires, establishes and operates of agent performance from vendors
Buy (Spec), Valuation $0.36ps
earnings during CY21 as the SME general insurance intermediary and buyers of residential real estate in
market begins to recover from businesses within Australia, NZ & UK. Australia, the USA and NZ. This data
COVID-19 lockdowns; can be used by agents to build an online
Following PSI’s recent $60.0m equity
marketing profile, or by vendors to find
2. We remain confident that the raising, we estimate that the company
and compare agents/agencies to sell
benefits of integration and cross holds ~A$90-95m of liquidity and has
their property.
selling of JLG services into the free cash flow to support prospective
Strata management market will acquisition activity, with typical The Australian market has acted as a
begin to emerge over the course acquisition multiples ranging between positive test case for the Rate My Agent
of FY21 & FY22, which should 8.0x-10.0x EBITDA for commercial Platform (with ~1 in 3 Agents in Australia
deliver additional revenue gains and insurance broking businesses in covered by a subscription). We are
improved operating leverage; and Australia and the UK. The company optimistic that the US market adoption
is now guiding to the top-end of will be equally as impressive, with
3. Ongoing claims activity from 6
FY21 Underlying EBITDA range of the company having connected to >22
Major Catastrophic weather events
$65m-$70m. We estimate that (subject multiple listing services (MLS), which
during 2019/2020, along with the
to timing, structure & size) PSI could has seen >86,800 US Agents claim their
ANALYST OUTLOOK FOR 2021. 10INDUSTRIALS Hamish Murray
Carbon Revolution (CBR) Mader Group (MAD) Emeco Holdings (EHL)
Carbon Revolution (CBR) is an Mader Group (MAD) is a leading Emeco Holdings (EHL) is a leading
advanced manufacturer that has provider of specialised contract provider of earthmoving equipment
developed the only single piece labour for maintenance of heavy rental and maintenance services to
carbon fibre automotive wheels to mobile equipment in the resources the Australian mining industry.
Original Equipment Manufacturer industry. We see the potential for earnings to
(OEM) quality standards with Easing interstate border restrictions normalise as early as FY22e, with
commercial adoption across several and new hiring initiatives continue the business expected to continue
major models. to ease pressure on growth capitalising on strong demand in WA
CBR is expecting to return to strong impediments in the strong WA and also benefit from any recovery in
sales growth in 2H21e, after CY20 market, while ongoing growth in the east coast coal markets.
was characterised by COVID-related US business and a potential market EHL has commented that it will
disruptions to key customers Ferrari entry into Canada should drive consider a resumption of dividends
and Ford, which are expected to margin expansion. as operating conditions stabilise
continue to impact 2Q21e volumes. Near-term organic growth should and we see the potential for this to
We see a range of other positive support capital appreciation, while occur as early as the FY21e result,
catalysts in 2H21e that should we see the potential return to the particularly given EHL’s heightened
support capital growth, including: ‘Rest of World’ business and balance FCF profile and large franking credits
(1) 2-4 official vehicle launches, sheet headroom to support strategic balance.
two of which are expected to enter bolt-on acquisitions as likely Buy, Price Target $1.58
production; (2) positive gross profit medium-term catalysts.
before the end of CY21e; and, (3) Buy, Price Target $1.26
the potential to win new vehicle
programs, such as the Asian based
OEM that is currently in engineering
validation stage.
Buy (Spec.), Val. $3.72
ANALYST OUTLOOK FOR 2021. 11INDUSTRIALS Alex McLean
Flight Centre (FLT) Rhipe (RHP)
Flight Centre Travel Group is a RHP provides cloud-based subscription
diversified provider of travel services software and service licenses to a
across a number of sectors including growing channel of IT service providers
leisure, corporate and wholesale, across Asia Pacific (APAC). Software
operating over 40 brands across the subscriptions are distributed at a
globe. We are most attracted to FLT’s wholesale level from world leading
Corporate business which generated software vendors such as Microsoft,
67% of FLT’s profit despite making Citrix and Symantec. We believe RHP
up only 43% of the Company’s TTV. remains well positioned to deliver
The company also has a significant another year of strong growth in
presence in the leisure travel market, FY21 despite the uncertainty facing
particularly in Australia. This business markets due to its lean operating
- which naturally carries a high fixed model and exposure to the digital
cost-base due to its extensive in-store economy. Ultimately, we believe the
network has undergone a significant cloud computing megatrend – RHP’s
restructure since Covid-19 strangled key structural growth driver - remains
the demand for travel - also provides intact in a post Covid world and
a value driver which is leveraged to a supports RHP’s long-term growth
rebound in international travel. Despite outlook. We see two positive catalysts
near term uncertainty, we expect FLT for the stock over the medium term: (1)
to restore earnings at higher margins RHPs entry into the Japanese market
with the removal of structural costs starting to become a reality; and (2)
and market leadership from FLT’s $50m net cash position to be used on
corporate business to be the key complementary acquisitions, boosting
drivers of value over the long-term. EPS by up to +40%.
With trading conditions gradually
improving since the March/April lows, Buy, Price Target $2.45
a widely distributed Covid-19 vaccine
provides upside bias to FLT’s 2021
recovery profile.
Buy, Price Target $19.00
ANALYST OUTLOOK FOR 2021. 12HEALTHCARE John Hester
Biotech stocks are renowned for their volatility and 2020 was no exception. In The company is proceeding with its Results from the recent phase II study
our coverage universe the major winners together with their respective total program to expand into adjacent markets were highly encouraging. All primary
shareholder returns included Cyclopharm (140%), Immugene (266%), 4D for the treatment of vitiligo, soft tissue endpoints were met. In the overall patient
injury (trauma wounds) and paediatric group, patients in the active arm of the
Medical (41%) and AFT Pharma (40%). burns. Clinical trials are under way in all study achieved a clinically meaningful
Stocks which underperformed included Elixinol Global and Mayne Pharma both of three indications with the highest levels and statistically significant reduction
which suffered important regulatory set backs. The Hemp industry in particular has not of interest in the vitiligo indication. Eight in the Knee Osteoarthritis Outcome
yet realised its potential and continues to go though a shake out which will rationalise previous investigator led clinical trials in Score (KOOS). The trial also showed a
competition. more than 1,000 patients in vitiligo have statistically significant reduction in the
proved highly successful. The current trial size of BME’s known to be associated with
Other stocks in our coverage enjoyed continuing solid performance as they work towards
continues to recruit good patient numbers. OA pain. These results represent the first
their various long terms goals. These included the likes of Volpara Health Technology,
We expect an approval in this indication scientific proof that the treatment can
Nanosonics, Pro Medicus and Oncosil. All four have significant operations outside of
in later calendar year 2022 or early 2023. modify disease progression and provide
Australia and each business was adversely affected by COVID, yet all four managed to
Approval will require a relatively straight pain relief. The safety profile of iPPS is
increase revenues during the course of calendar 2020.
forward supplement to the existing PMA. outstanding with non serious adverse
Looking forward to 2021, unquestionably the dominant theme will be COVID recovery. Of events recorded.
Buy (Speculative), Valuation $15.00
our three key picks AVH is perhaps the most likely to participate in a share market rally
The company is shortly expected to submit
driven by increased levels of economic activity. Paradigm Biopharmaceuticals and Kazia
Paradigm Biopharmaceuticals (PAR) its investigative new drug application to
Therapeutics should have a rich stream of news flow over the course of 2021. Paradigm’s
the FDA with phase III approval study
Zilosul may be approved for use in Australia and Kazia’s drug paxalisib will have Paradigm Biopharmaceuticals is a
commencing in the US in early CY21. A
numerous data points from a swathe of clinical trials reporting in 2021. drug developer with a single asset in
confirmatory study will run concurrently in
development.The company is repurposing
Europe. If successful the potential market
Avita Therapeutics (AVH) AVH suffered a decline in revenues when Injectable Pentosan Polysulfate Sodium
size is measured in billions of US dollars.
COVID hit, however volumes recovered (iPPS) for the treatment of Osteoarthritis of
AVH is a medical device company Data from these studies is expected by
strongly in July and August with the the knee. The drug is knows as Zilusol.
specialising in the treatment of second early CY2023.
and third degree burns requiring company generating a record US$5.1m in Osteoarthritis (OA) of the knee with bone
marrow edema (BME) is a painful, chronic Buy (Speculative), Valuation $3.36
hospitalisation. The spray on skin revenues for the September quarter. As
technology was developed in Australia the US economy returns to normal levels disease for which there is no known cure.
and was approved for use by the US FDA of activity as is anticipated over the course It affects tens of millions of people globally,
in September 2018. During the course of 2021, revenues are expected to continue mostly over the age of 50. The standard
of 2020 the company re-domiciled to the to increase rapidly. There are no competing of care today is physiotherapy for mild
United States and its primary listing is now innovative therapies to the Recell disease and a combination of non steroid
on NSADAQ. technology in the treatment of burns. anti inflammatory and opioids for pain
relief in later stage disease.
ANALYST OUTLOOK FOR 2021. 13HEALTHCARE John Hester
Kazia Therapeutics (KZA) dollars in development costs and months
Kazia Therapeutics is the developer if not years in the development timetable.
of paxalisib – a new chemical entity GBM Agile is intended to become the
specifically designed for the treatment of approval study for paxalisib with enrolment
Glioblastoma (aka GBM). Data from the of the first patient expected in 2020.
company’s single arm phase II study is While paxalisib is unlikely to be curative
now all but final and shows meaningful for GBM, the clinical data suggests it is
extension in both median progression free effective in providing meaningful extension
survival and median overall survival (3 to overall survival with an acceptable
months and 5 months respectively). The safety risk. GBM is an orphan indication in
trial is expected to report final data in early both the US and Europe, however, despite
2021. the smaller market, peak revenues are
Paxalisib was in-licensed by Kazia from estimated at several hundred million
Genentech in the US in 2016. Genentech dollars annually. Key intellectual property
are a highly renowned drug developer protection extends to at least 2030 in
based in San Francisco. The company is key markets. The next milestones for
a leading developer of medicines for the the company are the enrolment of first
treatment of various cancers including patients in GBM Agile and a further update
immunotherapy drugs (e.g. Herceptin). on key survival data from the phase II
Paxalisib is already gaining international study.
attention with six additional investigator As GBM is an orphan indication, paxalisib
sponsored studies under way in the US will also get a minimum of 7 years
at prominent institutional level hospitals. marketing exclusivity in the US from the
These investigators are examining the data of approval.
use of the drug in a range of adjacent The company is led by Dr James Garner
indications which include childhood brain – CEO and Executive Director. Kazia has
cancers and brain metastases from other virtually no presence in Australia with all of
primary tumours. In addition, the company the clinical work taking place in the United
has been invited to join the platform study States.
GBM Agile. This is an ongoing study for Buy (Speculative), Valuation $ 2.76
the simultaneous investigation of multiple
drug candidates in glioblastoma. The
platform uses a common control group and
therefore, is expected to save millions of
ANALYST OUTLOOK FOR 2021. 14HEALTHCARE & BIOTECH Tanushree Jain
COVID-19 pandemic has had far Mesoblast (MSB) Immutep (IMM)
reaching impacts across businesses Mesoblast is the leading allogeneic Immutep (IMM) is focused on the development Starpharma (SPL)
regenerative medicine player with a diversified of novel immunotherapies for the treatment
in 2020 and for the healthcare and pipeline and several products in late stage. It of cancer and autoimmune diseases. It
Starpharma is a Melbourne based platform
company whose dendrimer technology is
biotech sector. The biggest impact has strategic licensing agreements in place is the global leader in LAG-3. LAG-3 has
versatile with wide applicability across the
for the sector was the reputational with Tasly for China (heart), Grunenthal for potential to become the third most widely
used checkpoint inhibitor in cancer with as pharmaceutical sector. It’s already generating
EU and LATAM (back pain) and Novartis for
boost it got with the world looking at worldwide (key focus ARDS including caused
broad utility as that seen with approaches revenue through its VivaGel franchise and is
targeting PD-1/PD-L1 and CTLA-4, which have also working on improved formulations of
the sector for a solution to control by COVID-19). The company is heading towards yielded blockbuster therapies such as Merck’s leading cancer drugs both internally and with
and potentially end the pandemic in a transformational 2021, which could see its Keytruda. Validation for LAG-3 is expected in external partners including AstraZeneca.
the form of treatments, vaccines and lead product remestemcel-L for COVID-19 early CY21 with release of pivotal data from COVID-19 has taken centre stage for the
ARDS being approved under emergency use Bristol Myers Squibb’s relatlimab, which company, with the rapid development and
diagnostics. and launched in the US in 2QCY21, subject to would have positive read through for IMM. reformulation of the active used in its VivaGel
positive results from the ongoing randomised, Validation of its technology is also provided
Companies in the sector not directly involved by a host of high quality commercial and products into an anti-viral nasal spray
controlled Phase 3 trial. This would trigger called Viraleze for COVID-19 and other viral
in COVID-19 treatments also benefited from clinical trial collaborations with Big Pharma.
~US$105m milestones from partner Novartis. infections. The company is leveraging its huge
this reputational boost. We saw several IPO’s Its lead asset efti with its unique mechanism
Results from the Phase 3 back pain trial of action (MoA) as an APC activator is in dataset on safety/toxicology on the active
even for earlier stage companies and high
are expected in Dec’20, which will be a key Phase 2 trials and has blockbuster potential. to fast track the path to market, with the
valuations with a lot of financial support being
catalyst for the stock. At the back of it, we Interim data from the Phase 2 TACTI-002 product expected to be on market in Europe
directed at the sector. Deal making slowed due
expect a EU trial protocol to be finalised for trial with efti in combination with Keytruda in 1QCY21, less than 12 months since the
to restrictions on travel but there were still a
back pain in early CY21, triggering a US$20m continues to impress, with the most recent company first started working on it. Market
number of high value deals. In 2021 we expect being reported at the SITC conference. At
milestone from partner Grunenthal. We also research indicates the product has wide
the key thematic will still be the sector’s the back of it, partner Merck expanded its
expect the company to potentially license appeal with its broad anti-viral capabilities,
ongoing response to COVID-19 with several existing collaboration with the company and
US rights out for the back pain product in one of the key driving factors of enthusiasm
trials for vaccines and treatments to read out the TACTI-002 trial while also engaging with
2021 in a US$1bn deal. The recent deal with around the product and we expect it will be
which should help investors to pick winners. IMM to start a new trial called TACTI-003 in
Novartis has strengthened its balance sheet first line head and neck cancer. More mature complementary to other prevention strategies
We also expect continued financial support for
with proforma cash of US$158.1m. After results from TACTI-002 trial and first data from like vaccines & PPE (such as masks) in the
the sector. Companies with COVID-19 tailwinds
the disappointing decision by the FDA to not TACTI-003 trial is expected in CY21 and will fight against COVID-19. Beyond COVID-19,
are most likely to outperform and attract M&A
approve remestemcel-L product for SR-aGvHD be key catalysts. Recent data from Phase 2b the companies DEP platform is the key value
or licensing interest as we have seen in 2020
in children despite a 9-1 vote from the FDA AIPAC trial with efti+chemo showed significant driver with multiple Phase 2 trials due to read
as well. The second key area which we believe overall survival benefit with the combo versus
advisory committee, MSB is likely to dispute out in 2021, which if positive are likely to result
will continue to perform strongly in 2021 and chemo alone and also provided immune
the decision under the FDA dispute resolution in the company partnering out the products.
see deal activity will be oncology. Companies monitoring data supportive of its MoA causing
process, an outcome for which is expected in
that deliver solid, unequivocal data and a significant re-rating in the stock, however Buy (Speculative), Valuation $2.20/sh
2021.
commercial outcomes in 2021 are likely to be we believe it is still undervalued. Final overall
rewarded with MSB, IMM and SPL our Top 3 Buy (Speculative), Valuation $7.40/sh survival data is expected by mid-CY21. The
picks for having the potential to do so. recent capital raising and exercise of warrants
has strengthened its balance sheet, with a
cash runway into CY23.
Buy (Speculative), Valuation $0.60/sh
ANALYST OUTLOOK FOR 2021. 15HEALTHCARE & BIOTECH Elyse Shapiro
The healthcare, and specifically, medtech sector has seen a Aroa Biosurgery (ARX) CleanSpace (CSX)
continued recovery in-line with the market. During the February- Aroa Biosurgery (ARX) is Speculative CleanSpace (CSX) is BUY rated with
June period, most healthcare companies that were not directly BUY rated with a valuation of $2.10/ a price target of $6.75/share. The
share relative to the last close of company has a differentiated product
associated with COVID-19 treatment or prevention faced significant
$1.18. The company developed suite in the powered respiratory
headwinds, since non-emergent procedures were cancelled or and commercializes Endoform, a protection space which has shown to
delayed in the major global markets. proprietary soft tissue regeneration be cost-effective for the Healthcare
platform. It provides a “holy grail” and Industrial clients while providing
In spite of a resurgence of COVID, hospitals are now better equipped to handle solution to the notorious trade-off optimal airway protection and comfort
a higher number of cases, and are able to manage non-COVID patients in a between safety, efficacy, and cost for the user. Increased demand
more timely fashion. Since June, the medtech sector has seen a robust recovery with currently available Synthetic and attributable to COVID created an
as procedural volumes begin to improve (although they are unlikely to return Biologic wound dressings and surgical inflection point for the company in
to normal in the near-term). At this point, certain company’s salesforces are meshes. The company has a track terms of acceleration of the installed
now able to return to hospitals to resume marketing activities as normal, and record of sales, should achieve positive base and subsequent consumables
companies continue to adapt and drive their digital sales marketing efforts and earnings in the medium-term, and revenues. While news of a COVID
platforms simultaneously. offers near and medium term catalysts vaccine created some pressure on
Positive developments on approval and distribution of a COVID vaccine has to drive upside. We are looking forward the stock, our view is that higher PPE
improved investors’ confidence in a return to business as usual in the next ~18 to updated BRAVO followup data for the utilization will still remain a part of
months, and this has triggered a very robust recovery for medtech stocks in company’s hernia product, additional standard practice for the medium
Australia and abroad. As companies can begin to more accurately forecast their publications showing success of the term (~3 years) which is supported
near-term sales and growth, they are also likely to resume any activities that use of the Myriad surgical product in by our forecasts and valuation. We
were halted or delayed during the COVID period, including hiring, manufacturing more clinical settings, and partner Tela look forward to a solid 1H FY21 result,
expansion, and R&D and clinical work. This should drive ongoing catalysts for Bio’s quarterly results, which provide which we believe could beat already
companies that de-prioritized these initiatives during such an unpredictable good read-through for about half of upgraded guidance, and appreciate a
period. We look forward to ongoing improvements in growth for the medical Aroa’s revenue stream. healthy cashflow conversion in the 85-
technology space. 90% range.
ANALYST OUTLOOK FOR 2021. 16EMERGING COMPANIES Damien Williamson
PointsBet (PBH) (Speculative) and Telemundo (Hispanic) national Resimac (RMC) priced at a margin to bank bill, we
networks, 8 Regional Sports cable estimate each incremental 1bp of net
Founded in Melbourne in 2015, PBH RMC is one of Australia’s leading non-
channels, as well as other cable channels interest margin is worth ~$0.9m for RMC’s
commenced operations as an Australian bank mortgage providers, servicing over
and digital networks. PBH’s commitment FY21 Net Profit.
corporate bookmaker in February 2017. 50,000 customers with principally funded
of US$393m of marketing spend with NBC Since the 1 month bank bill rate shifted
The May 2018 decision by the US Supreme assets under management of $12.7bn.
over five years is reduced to a cash spend below the RBA cash rate in March 2020,
Court to overturn the Professional and Resimac is the pioneer of securitisation
of ~US$270m, after subtracting the value the average spread has been negative
Amateur Sports Protection Act (PASPA) of Australian residential mortgages with
of the 4.9% equity stake (US$47.5m), and 16bp since July 2020. This tailwind has
has provided the opportunity for PBH to its first Australian Residential Mortgage-
66.88m options (US$75.5m) issued to NBC. moderated following the RBA cutting
expand its corporate bookmaking business Backed Security (RMBS) issuance dating
into the US market, as individual states PBH’s domestic business has benefitted back to 1988 under the name Fanmac. To the cash rate from 0.25% to 0.10% on
introduce legislation to permit both online from the shift to online wagering following date, RMC has issued over $33bn across 3 November 2020 (current spot spread
wagering and sports betting. the closure of TABs, pokies and casinos 53 domestic and international RMBS negative 8bp).
during lockdowns, as well as customer issues. RMC does not have the overhead RMC’s FY21 result is also likely to benefit
To apply for a US online sports betting
leakage from the merger of Flutter (owner of maintaining an extensive nationwide from a lower impairment charge. RMC
licence, PBH is required to partner with a
of Sportsbet) and The Stars Group (owner branch network, rather it has relationships increased its impairment charge from
licensed operator in the form of a casino
of BetEasy) in May 2020, with the BetEasy with over 85% of Australia’s mortgage $3.8m (7bp of loans) in 1H20 to $18.2m
or racetrack. PBH currently partnerships
brand being replaced by Sportsbet. PBH’s brokers, where customer service and a (30bp of loans) in 2H20, after it applied a
in 12 US states with a combined population
Australian operations reported $6.9m of quick approvals process have been key substantial collective provision overlay of
of 94m, with operations live in five states
EBITDA for FY20, where PBH expects this factors for RMC increasing originations. $16.4m. Since 30 June 2020, it has seen
with a combined population of 37m:
division to remain EBITDA positive in FY21, the percentage of customers in COVID
New Jersey, Iowa, Indiana, Illinois, and The FY20 Normalised Net Profit of $55.7m
with its share of online wagering turnover payment deferrals reduce from 10% to
Colorado. PBH expect to launch both represented an increase of 79% versus
growing from ~3% in the 6 months to 4.4%.
online sports betting and iGaming (online the $31.1m reported in FY19, driven
June 2020 to ~5% in the September 2020
casino) services in Michigan in the March by an increase in Net Interest Margin
quarter.
2021 quarter, and iGaming in New Jersey from 1.31% to 1.69%, 21% growth in its
by June 2021. PBH is currently the Following completion of a $353m equity principally funded mortgage book, and
4th largest online bookmaker of the 18 raising, PBH had corporate cash of cost to income ratio reducing from 58.7%
operating in New Jersey, after reporting $436.5m at 30 September 2020, providing to 38.0%.
a 6.5% share of online sports wagering funding to execute on its target of
RMC’s 1H21 Normalised Net Profit
turnover in the September 2020 quarter. generating US$1bn of annual revenue by
guidance of $48-53m underlines its
2025, with a pathway to 10% market share
In August 2020, PBH announced a tailwind to quantitative easing measures,
in each US state.
company transforming media partnership with guidance implying an increase of
with NBCUniversal. This incorporates ~75% on 2H20 ($28.8m). With most of
the largest sports audience of US media RMC’s mortgages funded by the issue of
companies of 184m, spanning the NBC Residential Mortgage Backed Securities
ANALYST OUTLOOK FOR 2021. 17RESOURCES & ENERGY
The 2021 outlook for the resources and we expect to see Government stimulus For the energy sector, we have a positive Battery raw material markets are also
energy sectors will be shaped by the take the upper hand. Following severe medium to long term outlook for Australian expected to strengthen as governments
pace of global economic recovery, the contractions in 1HCY20, growth indicators domestic gas markets. The ACCC Gas and industry promote electric vehicle
duration of COVID-19 northern hemisphere have rebounded strongly in 2HCY20 – even Inquiry 2017-25 continues to highlight (EV) take-up, battery storage projects for
second infection waves, the effectiveness in jurisdictions where infection rates the risk of a supply shortfall in east management of intermittent renewable
of vaccines in curbing future COVID-19 remain high (such as the US, UK and EU), coast markets over the medium term, energy sources and other carbon
outbreaks, the forms of stimulus employed and both PMI and GDP measures have particularly in southern states. Incumbent abatement technologies.
by the major economies and the impact of turned positive in the September 2020 producers are expected to benefit from
Australia-China trade restrictions. Climate quarter. With many Government stimulus improved pricing. New entrants will have to Markets for lithium are expected to return
focused government policy relating to programs focusing on infrastructure and navigate increasing regulatory hurdles. to deficit over a 3-year outlook. Global
energy and related technology remains an renewable energy investment, we believe auto majors have firm plans for major
overarching theme. this will be positive for commodity demand In global oil markets, crude prices have new investments in EV capacity and new
in 2021 – particularly for iron ore, copper rebounded strongly towards the end of models; in cases like Toyota, EVs could
2020 saw significant disruption for and nickel. 2020, with the OPEC+ group of nations become their dominant product by the
commodities on both the supply and effectively managing supply and improved middle of the decade. Battery cathode
demand side due to the COVID-19 For gold, the emergence of effective demand as economic activity strengthens manufacturers are planning further
pandemic and the implementation of social vaccines has seen the retraction of the and population mobility increases. We capacity expansions in Europe and Asia
and economic restrictions to contain it. fear trade which had been a price support see oil prices remaining relatively steady to meet projected demand in 2022 and
Major global economies were pushed into during 2020. Combined with increased risk around current levels over the next two 2023. A recent spate of corporate activity
negative growth and technical recessions. appetite and the arrival of a seasonally years. in this sector has been supported by an
Key indicators of consumption, such as weak period for gold bullion prices, we increasingly positive view. Niche products
manufacturing PMI’s, showed rates of have seen a pullback (~11%, US$ terms) For coal, China-enforced trade restrictions such as high-purity alumina are also
contraction not seen for a decade or more. from the all-time highs of August 2020. on Australian shipments are likely to expected to be chronically undersupplied as
Governments have been forced to alternate However, global gold ETF holdings remain continue to dominate sentiment. Recovery its use is recognised in advancing lithium
on multiple occasions between encouraging within 4% of all-time highs and there in demand ex-China will be important for ion battery efficiency and safety.
growth and severely restricting economic appears to have been a recent de-coupling Australian thermal and met coal producers
activity with lockdowns as waves of of gold prices from a weakening US dollar as trade flows adjust. Australia will remain
COVID-19 infections have come and gone. and negative real interest rates. This could a dominant supplier of low cost met coal to
provide a positive impetus for the gold price the seaborne trade with recovering South
However, there is a consistent theme in early 2021 which, with loose monetary American markets and India’s emergence
across key global economies of policy settings being maintained, should to be key sources of demand.
Government stimulus programs to re-start see a supportive gold price environment in
and support economic growth. Now, with 2021.
the emergence of effective vaccines and the
likely acceleration of their roll-out in 2021,
ANALYST OUTLOOK FOR 2021. 18You can also read
