ANALYST OUTLOOK & STOCK PICKS FOR FY22. June 2021 ANALYST OUTLOOK & STOCK PICKS FOR FY22

CONTENTS Listed Investment Companies Hayden Nicholson, ETF/LIC Specialist 3 Agricultural & FMCG Jonathan Snape, Senior Industrials Analyst 4

To learn more about the stocks Technology Chris Savage, Industrials Analyst 5 mentioned in this report, speak to your adviser or refer to the Client Access Discretionary Retail & Professional Services Sam Haddad, Research Analyst – Emerging Growth 6 Research Library. Hamish Murray, Industrials Analyst 7 Please note that Speculative securities Industrials may not be suitable for retail clients James Filius, Analyst 8 (refer to final page of this report). Alex McLean, Analyst 9

Engineering & Construction Steven Anastasiou, Research Analyst 10

Healthcare John Hester, Analyst - Healthcare 11

Tanushree Jain, Healthcare Analyst 12

Elyse Shapiro, Healthcare Analyst 13

Resources & Precious Metals David Coates, Senior Resources Analyst 14

Energy Stuart Howe, Senior Analyst (Resources & Energy) 15 Joseph House, Resources Analyst

Strategic Minerals Stuart Howe, Senior Analyst (Resources & Energy) 16

Disclaimer & Disclosures 17

2 ANALYST OUTLOOK & STOCK PICKS FOR FY22

LISTED INVESTMENT COMPANIES WAM Alternative Assets (WMA) MFF Capital Investments (MFF) Ellerston Asian Investments WMA currently invests in a diverse MFF’s primary focus is to invest in Limited (EAI) range of alternative asset classes, large listed international companies Asia has attracted significant fund including but not limited to: (1) where the Investment Manager flows, however historic US-China Hayden Nicholson private equity, (2) real assets, (3) real has identified attractive business relations have undermined the ETF/LIC Specialist estate and (4) cash. Wilson Asset characteristics at a discount to their expansion of this capital allocation. The Management, by way of appointment assessed intrinsic values. We believe new Biden Administration and the Fed’s as the Investment Manager of the there is a potential for share price avoidance to address tapering targets The S&P/ASX 200 Index recovered and Fund in October 2020, has also appreciation given strong reported for quantitative easing may be set to then exceeded its pre-pandemic high in agreed to adhere to a ‘Premium profit reserves, franking credits benefit Emerging Markets. Positive the space of approximately 15 months, Target’, an uncommon objective in the and supportive guidance from the prospects for China’s growth trajectory notwithstanding a 36.5% drawdown 22 Australian LIC market which would Company’s Directors to revise the are supported by tailwinds such as: days into March last year. Using pre-tax see shareholders empowered to vote dividend policy from a 3cps 6 monthly (1) an increase in the administration NTA growth as a gauge for underlying on wind-up if shares fail to trade above fully franked dividend to 5cps within of vaccinations, (2) a focus on carbon investment portfolio performance, the pre-tax NTA at least 3 times over the next two years. An overhang does neutrality with the production of Domestic Equity, International Equity the next 5 years. With yields remaining exist from in-the-money options, electric vehicles and renewables and Alternative Strategy Managers all depressed, alternative assets, like however the low cost base embedded infrastructure and; (3) an improvement on average added substantial value over fixed income securities, exhibit a within the portfolio makes the turnover in living standards with increased their respective benchmarks during similar low correlation to equities of investments with reasonable risk- domestic consumption and services. the last 12 months. While the market with strong annuity-style returns. adjusted returns undesirable. MFF EAI provides access to a benchmark average discount to underlying asset Leveraged to Australia’s comparative has historically outperformed its agnostic, concentrated portfolio of value has materially contracted since advantage, the substantial allocation benchmark MSCI World Index (in AUD) high growth companies across the Asia the onset of the pandemic, we anticipate to agricultural assets and water by 3.7% p.a. over the last 10 years, and region with a proprietary integrated income dependency, sector consolidation, entitlements may be the driver of we believe this injection of liquidity will Environmental, Social, and Corporate shareholder activism and recent strong future returns amid further supply- facilitate further long-term growth. Governance approach through the performance of actively managed alpha chain disruptions and price increases. investment process. generating solutions to drive further contraction and realisation of value.

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AGRICULTURAL & FMCG

Elders (ELD) (BGA) The a2Milk Company (A2M) ELD is a leading supplier of fertiliser, Bega Cheese (BGA) is engaged in: The a2 Milk Company (A2M) is in the Jonathan Snape agricultural chemicals and animal (1) the processing, manufacturing, business of producing, marketing and Senior Industrials Analyst health products to rural and regional distribution and marketing of dairy and selling branded dairy and infant milk Australia, with strong agency positions associated products to both Australian formula (IMF) products in Australia, in livestock, wool and real estate. and international markets: and (2) New Zealand, China, US and UK. A2M the processing and manufacturing of branded milk contains only A2 Protein Investments in the Agricultural & The recent share price of ELD has benefited from rainfall and strong spreads and condiments for consumer rather than both A1 and A2 proteins FMCG sector should be considered cattle prices . However, we continue markets. which are found in Regular Cows’ Milk. high risk and come with volatility. to see upside to consensus FY21-22e The acquisition of Lion Dairy & Drinks While not without near term risks as For this reason we tend to focus earnings reflecting the annualised (LDD) and the targeted synergy base supply chains stabilise, at its core on stocks where we see either: a benefit of the AIRR acquisition (and is expected to drive a material step we see A2M as a business that, once structural uplift in ROIC through synergy realisation), a normalisation change in returns for BGA over the MVM is consolidated, has baseline the cycle, cyclical growth stories, or in the summer crop (sales flow in next three years. In addition, we see revenue of ~NZ$1.4-1.5Bn and EBITDA counter-seasonal crop exposures. 1H21e), gains from integrating three BGA benefiting from an improved of ~NZ$300m, with a pathway to generic portfolios across the combined competitive position at the farmgate being a ~NZ$1.7Bn revenue business ELD + AIRR business (and from in FY22e on the back of recent generating ~NZ$445m in EBITDA on migrating independents onto the AIRR operational issues at competitors and its existing China offline distribution platform); and continued business the material outperformance of SMP footprint (with a materially higher investment (which traditionally has relative to other dairy ingredients in portion of direct China sales than in the averaged ~$40m pa at 3-5x EBIT). recent months. In the medium term past). We do not see FY21e earnings as Buy, Price Target $13.75 we see the potential for additional LDD reflective of the returns the business synergies to be realised as seasonal can generate in the medium term, milk flows are better utilised. but acknowledge the high level of risk Buy, Price Target $7.35 involved in timing the inflection point at which destocking activity concludes. Buy, Price Target A$8.50

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TECHNOLOGY

Chris Savage Industrials Analyst Nitro Software (NTO) Life360 (360) Adacel Technologies (ADA) Nitro is a global document productivity Life360 provides a market leading Adacel is a leading global provider of software company that enables digital app for families – called Life360 simulation and control systems for We continue to be positive on the transformation in organisations – with features that range from the civil aviation and defence sectors. around the world through a suite communications to driving safety and The company has already upgraded technology sector in Australia as, in of products built to enable digital location sharing. The company is its FY21 guidance once – it now an environment of low interest rates workflows. The company has had a likely to be a major beneficiary of the forecasts PBT b/w $7.0-7.3m – and and low growth, we believe there strong start to the calendar year with widespread rollout of COVID vaccines we believe it will at least achieve the are a number of good quality stocks annual recurring revenue (ARR) at 31 – particularly in its home market of guidance if not exceed it. Adacel has in the sector with reasonable to March 2021 up 66% compared to 31 the USA – as the return to normality net cash of several million dollars and strong growth outlooks. What we are March 2020 and the CEO saying there and outdoor life will see demand for recommenced a share buyback at the cognisant of, however, is the threat is “accelerating sales momentum” its app increase. This was evident in start of the year (and has been quite of inflation and a return to some sort in the business. We believe there is the Appendix 4C release in late April active). The company has already paid of normality post the widespread a reasonable chance the company and we expect this trend to continue an interim dividend of 2.75c this year will upgrade its 2021 guidance at or over the remainder of the year and and we expect another reasonable rollout of the COVID vaccines which around the release of the 1H result into next. The stock is not cheap on dividend at year end. The stock looks may result in a sector rotation out of in August and our forecasts already an EV/Revenue multiple of c.5x in 2022 value on an FY22 PE ratio of around technology and into more value or reflect this. The stock is not cheap on but, like Nitro, looks reasonable value 13x. cyclical stocks. We therefore believe an EV/Revenue multiple of c.7x in 2022 relative to global comps. Buy, Price Target $1.25 it is now more of a stock picker’s but looks reasonable value relative to Buy, Price Target $7.00 market and are particularly focused global comps. on those technology stocks where Buy, Price Target $3.75 we believe there is either relative or absolute value.

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DISCRETIONARY RETAIL & PROF. SERVICES City Chic Collective (CCX) InvoCare (IVC) Propel Funeral Partners (PFP) Sam Haddad CCX is a global multichannel IVC is the largest provider of funeral PFP is the second largest provider Research Analyst – Emerging Growth retailer, with >70% of sales online, services in Australia and New of funeral services in Australia specialising in plus-size women’s Zealand, with also a presence in and New Zealand. PFP’s portfolio apparel, accessories and footwear. It Singapore. Across its markets, IVC footprint comprises 138 locations, Discretionary retailers continue to be is a collective of customer-led brands operates ~290 funeral locations and 17 including 32 cremation facilities and buoyed by international travel restrictions, including City Chic, Avenue, Evans, cemeteries and crematoria. Following 9 cemeteries. Based on a proven the low interest rate environment and CCX, Hips & Curves and Fox & Royal. a challenging CY20, we believe growth strategy and the leadership of an improved employment backdrop. Following CCX’s recent acquisition of tailwinds will emerge for IVC through an experienced management team, The listed retail sector has experienced a strong rally over the past 12 months, Evans, the company now has three 2H21/CY22. We forecast a rebound in we believe PFP is well positioned to however looking forward into FY22 we high traffic online platforms, each with earnings driven by: 1) the cycling of drive further industry consolidation. are cautious based on several factors a strong customer following, across low case volumes; 2) opex re-leverage; PFP also stands to benefit from the including: 1) the continued risks three key markets. These include City and 3) benefits from completion of attractive industry fundamentals (that surrounding the pandemic which may stall Chic in ANZ, Avenue in the USA and IVC’s Protect & Grow program. We IVC is also leveraged to), including economic recovery/consumer spending; Evans in the UK. With this foundation, believe completion of Protect & Grow the positive long term trend in case 2) the significant stimulus and sales we believe CCX is well placed to will: reduce disruption to operations; volumes underpinned by an ageing pull-forward that needs to be cycled; 3) grow market share across these key reduce capex spend; and enable full population, the industry’s highly the expected resumption of international markets. Furthermore, with ~$83m in benefits of the program to be realised. defensive attributes and the relatively travel in CY22; 4) emerging inflationary net cash, CCX is well placed to acquire IVC’s balance sheet is conservatively high barriers to entry. We also believe pressures; and 5) the current elevated additional brands/businesses to geared (leverage ratio ~1.3x), providing PFP’s internalisation proposal will valuation multiples. We have retained accelerate its international expansion. strong foundation to pursue growth help unlock the intrinsic value of retailer CCX amongst our preferred stock opportunities. PFP’s assets, operations and growth picks. To switch exposure to a more Buy, Price Target $4.90 defensive sector, we recommend funeral Buy, Price Target $12.20 prospects. service providers IVC and PFP. Throughout Buy, Price Target $4.25 CY20, the funeral services industry was impacted by below trend case volumes and COVID-19 limits on funeral attendees. While timing is difficult, we expect case volumes will normalise, providing re- leverage benefits for both IVC and PFP off a depressed pcp.

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INDUSTRIALS

Hamish Murray Industrials Analyst IMDEX (IMD) Mader Group (MAD) Emeco Holdings (EHL) IMDEX (IMD) is the market leader Mader Group (MAD) is a leading Emeco Holdings (EHL) is a leading in downhole instrumentation provider of specialised contract labour provider of earthmoving equipment solutions for mining exploration and for maintenance of heavy mobile rental and maintenance services to the development, with a presence on ~70% equipment in the resources industry. Australian mining industry. of mineral drill sites globally. Easing interstate border restrictions We see a strong outlook for FY22e, with Trading in 2H21e has been and new hiring initiatives continue to the business expected to capitalise on characterised by record demand for ease pressure on growth impediments strong demand in WA and surging east high margin tools and accelerating in the strong WA market, while ongoing coast coal prices. A large proportion of adoption of the IMDEXHUB-IQ cloud growth in the US business, a potential latent equipment on the east coast and platform which should support a market entry into Canada and a steady a skew towards dry hire reduces the strong FY21e result. return to the ‘Rest of World’ business risk of tight labour markets. We continue to see a strong outlook for should drive margin expansion. EHL is expected to recommence capital FY22e, given: (1) supportive commodity Balance sheet headroom to support management at the end of FY21e and pricing; (2) record capital raising strategic bolt-on acquisitions is a likely in our view, the heightened FCF profile activity; (3) strong results from global medium-term catalyst. and large franking credits balance drillers; and (4) increasing exploration Labour availability is the key risk, increase the likelihood of dividends. forecasts from majors, while the net although MAD is well placed to Buy, Price Target $1.55 cash position provides potential for attract talent and pass through wage high payouts or acquisitions. increases. Buy, Price Target $2.35 Buy, Price Target $1.30

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INDUSTRIALS

James Filius Analyst Money3 (MNY) ikeGPS (IKE) Money3 is a specialist consumer ikeGPS (IKE) is a specialist technology finance provider in Australia and New company that delivers a platform Zealand with a focus on providing used in the collection, measurement, Secured Commercial and Consumer analysis, and data management of Automotive loans to near-prime and power pole infrastructure assets. The non-conforming customers. MNY company services the North American Communications and Utilities markets, manages a growing and profitable which collectively utilise and own loan book of ~$556.7m and services ~220m pole assets across their over 60,000 active customers across respective networks. its 3 core brands: Money3, Automotive IKE is leveraged to the US 5G & fibre Financial Services (AFS) Australia, and investment cycle, which is projected Go Car Finance (NZ). to see Communication infrastructure MNY recently completed the providers invest ~US$300bn to upgrade refinancing of its loan book into a new existing networks and deploy new 5G $250 million warehouse securitisation capabilities across the U.S. over the facility, providing the company with next 3-5 years. headroom to leverage and grow More recently, IKE has seen an its loan receivables. This is also increasing number of contract anticipated to deliver a significant cost wins, including from AT&T, Verizon, saving of ~$10m once fully drawn. Crown Castle and Corning. As network expansion activity within the We believe MNY now has a solid Communications market continues platform to deliver strong loan book to accelerate, we believe IKE is well growth, greater credit quality, and positioned to deliver strong top line improved ROE over the medium term, growth as its customers increasingly with the company targeting ~$1bn of require fast, accurate and secure gross loan receivables by FY24. capture and assessment of pole asset Buy, Price Target $3.70 data. Buy (Spec), Valuation $1.35

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INDUSTRIALS

Alex Mclean Analyst (FLT) Rhipe (RHP) FLT is a diversified provider of travel RHP provides cloud-based services across leisure, corporate subscription software and service and wholesale. We are most attracted licenses to a growing channel of IT to FLT’s Corporate business which service providers across Asia Pacific generated 67% of FLT’s profit (APAC). Software subscriptions are despite making up only 43% of the distributed at a wholesale level from company’s TTV. The company also world leading software vendors such has a significant presence in the as Microsoft, Citrix and Symantec. We leisure travel market, particularly believe RHP remains well positioned to in Australia. This business - which deliver another year of strong growth naturally carries a high fixed cost- in FY21 despite the uncertainty facing base due to its extensive in-store markets due to its lean operating network has undergone a significant model and exposure to the digital restructure since Covid-19 strangled economy. Ultimately, we believe the the demand for travel – provides significant leverage to a rebound in cloud computing megatrend – RHP’s long-haul international travel to and key structural growth driver - remains from Australia. Despite near term intact post Covid-19 and supports uncertainty, the recovery of FLT’s RHP’s long-term growth outlook. We leisure business at higher margins see two positive catalysts for the stock due to its structural cost-out program over the medium term: (1) RHP’s entry and market leadership from FLT’s into the Japanese market starting to corporate business will be the key become a reality; and (2) the continued value drivers over the long-term. With deployment of the Company’s $45m trading conditions gradually improving, net cash position on complementary an acceleration of Australia’s acquisitions, boosting EPS by up to vaccination program provides upside +35%. bias to FLT’s 2022 recovery profile. Buy, Price Target $2.60 Buy, Price Target $20.00

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ENGINEERING & CONSTRUCTION

Monadelphous Group (MND) Lycopodium (LYL) GR Engineering Services (GNG) While MND’s heavy WA focus, large With LYL generating the bulk of its The only E&C top pick in our last Steven Anastasiou revenue and employee base have revenue from African gold projects Analyst Outlook, GNG has delivered Research Analyst impacted productivity and margins in recent years, COVID presented solid shareholder returns over 1H on account of resourcing constraints difficulties, with operating conditions CY21. GNG’s operations have been Following a rebound from lockdown (which also increases short-term and new contract awards impacted supported by high commodity prices, induced uncertainty, contract momentum project risks), we believe that MND’s by global travel restrictions and which have in turn supported project has steadily built across the Engineering medium-term outlook is positive. lockdown measures. With economies activity from junior/mid-tier resources & Construction (E&C) space, with high Strong commodity prices should reopening, and global travel companies – GNG’s core client base. levels of global stimulus and monetary spur both new resources projects, restrictions being gradually rolled GNG is expected to deliver record debasement resulting in strong and sustaining capital opportunities. back, LYL has recently secured several revenue and EBITDA in FY21, and has commodity prices, and resources and MND’s Zenviron JV, which holds a new resources projects in Africa. We a solid outlook for FY22. Like LYL, GNG infrastructure project activity. This solid position in Australian wind anticipate that further opportunities has a solid track record of profits and backdrop is expected to continue over farm developments, and its Chilean will arise over coming halves should dividend payments, and maintains a coming halves. maintenance and construction commodity prices remain strong. solid net cash position. We continue to Nevertheless, investor sentiment across business, Buildtek, provide further While current resourcing constraints have a Buy rating, and maintain GNG the E&C space has materially soured in growth opportunities. With MND’s may be impacting its Australian as a top pick, though are cognisant that light of significant resource constraints shares trading much closer to 10- based Mondium JV (of which MND is GNG’s shares have already delivered – particularly in Western Australia – on year lows than highs, we believe the other partner), we believe LYL’s material capital returns over the past account of high demand combining those investors with a medium-term medium-term outlook is bright, with a 12 months. with sporadic border closures. These timeframe will benefit from a gradual solid track record of profits, dividend Buy, Price Target $1.60 constraints have impacted margins improvement in margins, and in turn, payments, and a large net cash across much of the sector. While these investor sentiment. position supporting our Buy rating. pressures are expected to remain in the Buy, Price Target $13.95 Buy, Price Target $6.50 short-term, we hold a positive medium- term outlook, with margins expected to gradually improve as work priced pre-pandemic is completed, and replaced with new work priced in accordance with the current operating environment.

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HEALTHCARE

John Hester Analyst - Healthcare Avita Medical (AVH) Kazia Therapeutics (KZA) Mayne Pharma (MYX) AVH’s spray on skin technology Lead asset Paxalisib is in development FDA approval of Nextstellis – was developed in Australia and was for the treatment of glioblastoma the company’s next generation Over the next 6 months we are approved by the US FDA in September (primary brain cancer). The open contraceptive pill has the potential to 2018. Revenue growth declined in label phase 2 study is due to read significantly move the earnings dial. expecting significant news flow from FY21 when COVID hit. As normal out headline data later this year. The product was launched in the June Mesoblast, Kazia Therapeutics and levels of activity in the US economy The interim data showed a 5 month 2021 quarter and is supported by a 75 Aroa Biopharmaceuticals amongst resume, the number of burn injuries is extension in overall survival. The strong marketing team who will deliver others. Mesoblast is expected returning to pre COVID levels. Access company was invited to join the thousands of samples to prescribers to consummate its development to hospitals for Avita staff is improving international platform study GBM and patients over the coming weeks. agreement with Novartis in COVID as reflected in the recently upgraded Agile in the United States. This is The product is highly differentiated ARDS. Kazia is expected to release guidance for 4Q21. AVH is pursuing an approval study and patients are from competitors because it contains final data from its phase 2 study adjacent markets for the treatment currently recruiting. If approved the the first new form of estrogen to the investigating the use of paxalisib of vitiligo and soft tissue injury where drug will have exclusivity until at least market in over 50 years. Clinical trials clinical trials are under way. Approval 2031 and likely longer following the have shown it to have an outstanding in glioblastoma. Aroa along with is expected in FY23/24 respectively. grant of further patents. More recently side effect profile with minimal impact Avita Therapeutics operate in the Approval in Japan is expected by the the company in-licenced a second on blood clotting and weight gain. We US hospital sector and both will end of CY21. asset, being a next generation VEGFR3 estimate Nextstellis will become a benefit from the reopening of the Buy, Target Price $9.80 inhibitor. Clinical trials start in CY21. leading branded contraceptive in the US economy as it recovers from Buy (Speculative), Target Price $2.50 US and Australia. COVID. Aroa recently launched its Buy, Price Target $0.56 new MYRIAD soft tissue matrix for surgical use while Avita has already had a material lift in activity levels during the June quarter.

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HEALTHCARE

Tanushree Jain Healthcare Analyst Immutep (IMM) Genetic Signatures (GSS) Mesoblast (MSB) Immutep is developing GSS is a molecular diagnostics Mesoblast is the leading allogeneic immunotherapies for cancer and company developing PCR tests stem cell company. Stock has pulled In FY22 the key thematic for the autoimmune diseases. It is the leader for infectious diseases using its back on change in the timing of in LAG-3, which has emerged as the proprietary platform technology, 3 first revenues from its lead asset healthcare and biotech sector will next big immuno-oncology checkpoint base. COVID-19 test sales drove a remestemcel-L for paediatric GvHD still be its ongoing response to with recent validation from pivotal data record 1HFY21. Stock price rallied and COVID-ARDS. In FY22 regulatory COVID-19 with the focus shifting from on Bristol Myers Squibb’s relatlimab. last year but has been sold off as a pathway will be clarified for its two key testing to vaccines and therapeutics. Clinical data released recently at ASCO slowdown in the volume of testing assets across 4 indications determining IPOs and new issues will continue of IMM’s lead drug efti with Merck’s with vaccine roll out reduced 3Q21 next development steps, approval although at more realistic valuations Keytruda in lung and head and neck revenues and future COVID revenue timeline and is important for partnering for earlier stage companies. We cancer has increased our confidence outlook. Fundamentals remain intact discussions. FDA interactions have continue to expect oncology as a in the asset. A $65m capital raise is and the accelerated path to customer progressed for paediatric GvHD, which key area for deal activity and strong ongoing to extend the cash runway to acquisition provided by COVID-19 could see a resubmission in 2HCY21, 4QCY23 and fund new trials including a should serve GSS well to market its with potential approval and sales by performance. As investors move from Phase 3. We see the release of further other approved tests in the aftermath mid-CY22, earlier than our current growth stocks to COVID 19 recovery clinical data as the key catalyst for of the pandemic. Key FY22 catalyst expectations and would be a material value stocks, diagnostic companies the stock in FY22, driving subsequent representing a step change in revenue catalyst. Potential closure of Novartis with COVID-19 tailwinds last year new collaborations and licensing/M&A will be the FDA approval of its enteric deal for remestemcel-L with US$50m have been sold off and can re-rate interest. protozoa test and US launch in upfront in 3QCY21 will be a key catalyst. once they dispel investor concerns Buy (Speculative), Valuation $0.85 2QCY22. Buy (Speculative), Valuation $3.60 about future growth. Buy (Speculative), Valuation $2.20

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HEALTHCARE

Elyse Shapiro Healthcare Analyst Aroa Biosurgery (ARX) Imricor (IMR) Alcidion (ALC) Aroa developed and commercializes Imricor develops and commercializes Alcidion is a growing commercial Endoform, a proprietary soft tissue MRI compatible cardiac ablation healthcare IT company with technology The last few months have seen regeneration platform. It provides a hardware and consumables devices. that aims to improve patient care and “holy grail” solution to the notorious This unique feature addresses an operational efficiency in hospitals a recovery in international non- trade-off between safety, efficacy, and unmet clinical need. The novel and healthcare systems. The product emergent procedure volumes, fuelled cost versus competitors. FY22 revenue technology has evolved into a offering includes AI-driven clinical by vaccine tailwinds. Providers have guidance incorporates conservative commercial execution story, with decision support tools that are been focussed on the roll-out of growth assumptions and leaves CE Mark approval and presence in differentiated and unique, with full large scale COVID-19 vaccination room for upside. The September- 10 European hospitals. Distribution mobile capability complete with active programs, with 2.8b doses December quarter remains, in our partnerships with Phillips and patient monitoring and back-end administered globally. At this point, view, the timing for an inflection point (pending) Siemens are validating and clinical workflow and patient flow. hospitals can work towards business of account conversion and improved improve hospital awareness, with a Sales momentum in ANZ and the UK as usual and to treating patients sales momentum for both Myriad and more scalable growth opportunity. has been impressive, with the main distribution partner Tela Bio. Current focus remains on the rate of focus now on the rate of new contract across all care modalities with Speculative Buy, Valuation $2.00 adding new hospital accounts, which additions in the UK. Long-term significantly fewer restrictions. is expected to accelerate significantly contracts provide a predictable largely in 2H21, and on the recovery of patient recurring revenue base. The pandemic also drew attention to volumes in existing sites, which is Buy, Price Target $0.45 weaknesses in healthcare systems, improving. especially around diagnostic speed Speculative Buy, Valuation $2.60 and accuracy, patient management, and infection control mechanisms. Focus will begin to shift away from pandemic control measures, to making improvements across in and out of hospital care modalities.

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RESOURCES & PRECIOUS METALS Nickel Mines (NIC) Aeris Resources (AIS) Regis Resources (RRL) NIC has grown to become the largest AIS has continued to leverage off the RRL recently completed the acquisition nickel producer on the ASX and built transformational year it had in 2020 of a 30% interest in the Tropicana David Coates a track record of achieving steady and is now a multi-mine copper-gold Gold Mine for a cash consideration of Senior Resources Analyst state production and all-in costs producer offering a balanced exposure A$903m. We view this acquisition as a better than our original forecasts and to two of our preferred metals. Strong positive, transformative deal for RRL nameplate capacity. NIC has repaid free cash flows from high copper and that will support its elevation into the Metals demand continues to benefit debt early and commenced paying gold prices enabled AIS to accelerate top ranks of ASX-listed gold producers from the global economic recovery dividends. We forecast a dividend of debt repayments and invest in and create a strong foundation for as Governments worldwide seek A3cps for FY21 for an unfranked yield exploration. AIS became net cash future growth. We believe benefits to to stimulate growth, with a focus of ~3%. NIC remains on an aggressive positive in March 2021 for the first time RRL include exposure to a long-life, on infrastructure and renewable growth trajectory, with the acquisition in many years and drilling at Tritton low cost asset that is immediately energy investment. We believe this of a 70% equity interest in the Angel has delivered significant exploration cash generative, diversification of remains positive for commodity Nickel Project set to lift attributable success with the Constellation its production base, de-risking the production by +25ktpa (~74%), discovery. Constellation looks likely to funding of McPhillamys and setting demand – particularly iron ore, commissioning October 2022. Also add to mine life, increasing AIS’ copper a clear path to grow production to copper and nickel. Despite China offering good value relative to peers exposure at a time when the market is ~700kozpa – all of which would be in taking measures attempting to curb NIC remains one of our top picks for searching for it. Australia, making RRL unique among commodity price rises, we believe 2HCY21. Buy, Price Target $0.235 the top ASX-listed producers. these will have limited impact and Buy, Price Target $1.56 Buy, Price Target $4.08 tight fundamentals will prevail as key market drivers. For gold, the recent shift among Central Banks that interest rate rises may be brought forward has damaged sentiment. Real interest rates, however, remain in negative territory and we continue to view this as supportive for the gold price.

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ENERGY

Stuart Howe Senior Analyst (Resources & Energy) Cooper Energy (COE) Central Petroleum (CTP) (BPT) Joseph House We expect a step-change in COE’s CTP’s recent sell-down of interests in BPT is increasingly diversified across Resources Analyst earnings from FY22 with the its Amadeus Basin producing assets asset and energy commodity, providing Gippsland Basin Sole project gas significantly improved the company’s leverage to tightening east coast sale agreements now operating and balance sheet strength and funding gas markets and to internationally Global energy demand has further production improvements for future exploration. The company’s traded LNG and oil. The recent reset rebounded strongly in 2021 as expected at this asset. In the Otway established producing portfolio is of expectations at its Western Flank economies recover from lockdowns Basin, transitioning gas processing to highly prospective for resource and operations was a material hit to value. and stimulus measures are enacted. the Athena Gas Plant should improve production growth. The assets could However, BPT continues to trade on The transition to renewable energy gas production and pricing through further benefit from a proposed new lower resource, reserve, production is gathering pace. However, existing uninterrupted delivery terms. COE gas pipeline which would increase the and earnings multiples compared with installed electricity generation has long-life conventional gas assets Amadeus Basin’s reach into Australia’s most peers. This discount is despite capacity and transport infrastructure to support production leveraged to east coast gas markets. CTP is also BPT having a strong FY22-23 earnings remains highly reliant on fossil fuel Australia’s tightening east coast appraising the Range coal seam gas growth outlook, low levels of balance market. Longer term, the company has project for FID in 2022 alongside sheet leverage and significantly supply. Increased Government and a portfolio of prospective exploration joint venture partner , more project diversification than its financing community focus on ESG and expansion projects to potentially potentially delivering first gas from this peers. BPT is also at the forefront of adds risk to the expansions and new support further production growth. asset into the east coast market from participating in carbon capture and projects required to replace depleting In 2020, COE became Australia’s first 2024. storage technology. energy resources. We believe that carbon neutral domestic gas producer. Buy, Price Target $0.23 Buy, Price Target $1.73 reduced supply reliability across Buy, Price Target $0.45 oil, gas and coal, in domestic and internationally traded markets, will support stronger energy commodity prices in the medium term and support the free cash flow of incumbent producers.

15 ANALYST OUTLOOK & STOCK PICKS FOR FY22

STRATEGIC MINERALS

Stuart Howe Alpha HPA (A4N) Agrimin (AMN) Senior Analyst (Resources & Energy) A4N’s high purity aluminium products AMN’s Mackay Potash Project has the have applications in lithium ion battery potential to deliver the world’s lowest and micro-LED manufacturing; these cost source of sulphate of potash Strategic minerals focused technologies are at the forefront of (SOP) supply into seaborne markets. companies have benefited from the global decarbonising theme. The There is value potential as the project increased debt and equity investor HPA First project continues to de-risk is de-risked through approvals, emphasis on environment, social and with A4N accelerating development of FID (mid-2022), development and governance criteria. In particular, a smaller scale precursor production then production. AMN has strong decarbonisation and the expected facility ahead of its full-scale plant. ESG credentials, committing to Market outreach programs continue developing the Mackay Potash Project uptake of battery storage and electric to expand A4N’s product suite, in alignment with the United Nations vehicles has been dominant in driving applications and potential customer Sustainability Goals. Solar evaporation battery minerals prices and equities base. We believe that it is increasingly of a potassium-rich brine Reserve and higher (lithium, graphite, high purity likely that the commercialisation supporting infrastructure powered alumina). of A4N’s proprietary process could by renewable energy results in a low ESG and decarbonisation are long- involve investments beyond its initial carbon footprint. SOP provides key term themes which we expect to Gladstone plant. Catalysts ahead nutrients to high-value crops and continue driving strong strategic include pending project approvals, its application rate in developing offtake agreements and financial economies is still relatively low. mineral demand. This structural approval, all expected in 2H 2021. shift in demand, coupled with a Speculative Buy, Valuation $0.97 constrained short-to-medium term Speculative Buy, Valuation $0.83 supply response and developing supply chains, should support higher minerals prices and therefore positive equity sentiment.

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