Sarytogan Graphite Limited engages in the exploration of graphite properties. The company holds 100% interest in the Sarytogan Graphite Project comprising an exploration concession, which covers approximately 103.92 square kilometers located in the Karaganda region of Central Kazakhstan. Sarytogan Graphite Limited was incorporated in 2004 and is based in Subiaco, Australia.

Australia

Sarytogan Graphite 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. 

SGA.AX reported revenue of AUD 0mn in the last 12 months, down 0% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 0% from FY23 to AUD -0.04.

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 52ppts over six months and grown 22ppts slower 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 slightly negative.

Another important profitability metric, return on assets (RoA), amounted to 0.0% in the last 12 months, an increase from -13.1% in FY24. 

In the last 12 months, the return on capital employed (RoCE) grew to 0.0%, below the peers. 

Sarytogan Graphite Limited reported a return on equity (RoE) of 0.0% in the last 12 months, up from -13.2% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -3.4 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.

SGA.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 is unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 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 very high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, weak debt servicing capacity, inadequate interest coverage, and poor cash flow generation.

In highly turbulent market conditions, SGA.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, SGA.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. 

From both historical and forecast perspectives, the stock is considerably underpriced compared to similar stocks. 

Sarytogan Graphite Limited

A$ 0.04

3

Sarytogan Graphite Limited

A$ 0.04

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 0.04

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