Kuniko Limited engages in the exploration and development of mineral properties for electromobility in Scandinavia. The company explores for copper, nickel, and cobalt deposits. It holds interest in the Ertelien Nickel-Copper-Cobalt Project; Ringerike Battery Metals Project, Skuterud cobalt project; the Vågå, Undal- Nyberget, and Gullklumpan copper projects; and the Frase, Mia North, and Nemaska South lithium project. The company was formerly known as Koppar Resources Europe Pty Ltd. Kuniko Limited was incorporated in 2017 and is based in Perth, Australia.

Australia

Kuniko Limited

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 0ppts over six months and grown 6ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -1420.3% in the last 12 months, up from -2307.1% in FY22. 

Historically, KNI.AX has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -1501.8%, a growth from -2653.1% in FY22. 

Kuniko Limited reported a return on equity (RoE) of -24.5% in the last 12 months, up from -54.8% in FY22. 

Another important profitability metric, return on assets (RoA), amounted to -23.1% in the last 12 months, an increase from -50.7% in FY22. 

In the last 12 months, the return on capital employed (RoCE) grew to -24.3%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -3.9 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

KNI.AX has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, and inadequate interest coverage. We note resilient historical revenue growth, low margin volatility, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, KNI.AX is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, KNI.AX is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is overvalued relative to its peers. 

Kuniko Limited

A$ 0.14

1

Kuniko Limited

A$ 0.14

1

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 0.14

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