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02 Mar 21

WHI Morning Comment: AFC Energy (AFC) - AFC Energy's Final Results

AFC Energy's Final Results for the year ended 31 October 2020 indicate the company is in a position of strength and at inflection point of sales growth. Results were better than we had forecast with a reported loss of £4.2M (WHIe £4.5M) and cash flow from operations of £4.3M (WHIe £4.2M). Most importantly, the company ended the period with a stronger cash balance than we had expected of £31.6M (WHIe £29.9M) reflecting the capital light strategy the company is applying. The year-end confirmed order book of £1.1M indicates that AFC Energy, after decades of investment, is past the inflection point that is translating its globally unique technology into a highly-compelling, long-term commercial growth opportunity.

Companies: AFC Energy plc

24 Feb 21

BOTB - Conclusion of Strategic Options Review & profit upgrade

The group has announced the Board’s decision to terminate the Strategic Options Review announced in June 2020 and to continue to focus on its existing online strategy, which continues to generate exceptional growth and strong cash flow. The statement also provides a trading update that confirms continuing strong trading through Q3. Our current year forecast PBT is upgraded by 79% from £7.8m to £14.0m.

Companies: Best of the Best plc

23 Feb 21

Arcontech - Solid H1 results with +5% revenue growth

Arcontech has reported a solid set of H1 21 results that provide a strong foundation for future growth. H1 revenue has increased +5% to £1.54m as 90% of Arcontech’s revenue is from recurring licence fees, and the October 2020 new tier one client win and tier one client contract upgrade provide £100k of additional annual recurring revenue, which offsets an existing client developing certain functionality in-house. The strength and flexibility of Arcontech’s solutions have enabled it to achieve these client wins despite a challenging H2 20 and H1 21 environment, where it has been difficult to finalise new sales due to limited customer contact and decisions being delayed due to remote working. In this environment, the two new additions to Arcontech’s salesforce since January 2020 have had a limited impacted on revenue, and the YoY opex impact leads to H1 adjusted EBIT declining 7% to £0.52m. However, Arcontech’s strengthened salesforce has been diligently establishing relationships with new potential customers, and as conditions return towards normal, we expect Arcontech will deliver new client wins that will benefit revised forecasts with a high incremental margin. Arcontech’s strong net cash of £5.0m continues to provide it with the flexibility to invest in accelerating its future growth through product development and sales, and we continue to expect it will grow its dividend by 10% at FY21 results. Although we reduce our forecasts to reflect the challenging sales environment, we look forward to Arcontech announcing new contract wins as it builds upon its strong foundations. On 23x 12m forward P/E with +5% NTM EPS growth and an EFCF yield of 4%, Arcontech trades at a discount to peers in financial information and the finnCap Next 50 on P/Es of 27-47x with NTM EPS growth of +6-15%, and EFCF yields of 2-4%.

Companies: Arcontech Group PLC

01 Mar 21

Digital momentum building

Reach’s prelims were ahead of N1S estimates for H2 sales and EBITDA (1% and 3% resp.) and showed excellent progress with both the customer value strategy (‘CVS’) and business transformation agenda. Whilst FY’20 Group sales were 15% y/y lower as CV19 impacted Print, Digital revenue grew +11% y/y to £118m (H2: +20% to £70m), supported by a strong uptick in user engagement with content (page views/user: +39% y/y) and further progress in signing up new registered users (Feb’21: 5.8m; Dec’20: 5.0m; Dec’19: 0.7m). Meanwhile quick action to mitigate CV19 impact on Print volumes and execution on the business transformation plan saw AOP margins increase 50bps y/y, with Group H2 AOP down just 4% y/y (FY’20: -13%). Looking ahead, there were highly encouraging results from initial campaigns on the Group’s ReachID platform (+10%-40% uplift in click-through rates on early campaigns), whilst further cost savings of £11m are announced through rationalisation of the Group’s Print sites. Strong cash performance was reflected in £42m of cash inflow (post pension and historic legal and contractual payments), which gives management confidence to declare a final cash dividend of 4.26p/share. The path to sustainable top-line and FCF growth remain very much open, with FY’21E adj FCF of £120m generating an 11% yield at current valuation.

Companies: Reach plc

24 Feb 21

Faster cost of risk normalisation

The lockdowns continued to weigh on the top-line performance, but the state’s supporting measures have proven so successful that the quarter enjoyed provision recoveries and the cost of risk is expected to almost fully normalise as soon as this year. However, 2021 will remain a transitory year as the top-line is expected to recover only progressively.

Companies: Lloyds Banking Group plc

01 Mar 21

AFC Energy (AFC LN) - Final results

Final results from AFC are very close to our projections, with net cash slightly ahead of our expectations. There is no new news in this announcement, and we marginally edge up the losses in 2021E and 2022E due to increased activity levels as the Group looks to capitalise on the vast opportunities available. We remain excited about the long-term investment thesis we set out recently and maintain our target valuation of 191.5p per share. As we have previously highlighted, our valuation excludes what we consider to be significant growth opportunities highlighted in the note.

Companies: AFC Energy plc

24 Feb 21

SP Angel Healthcare Conditions

Novacyt S.A. (NCYT.L*): R&D Update | N4 Pharma (N4P.L): Full year results

Companies: Novacyt SAS (ALNOV:PAR)N4 Pharma Plc (N4P:LON)

25 Feb 21

dotDigital - Strong interims give room for investment

In a repeat of the pattern of 1H20, dotdigital’s strong 1H21 to December substantially derisks the achievement of unchanged FY profit expectations, and allows room for increased investment after we tickle FY21 revenue forecasts up 2%. As we noted in our “Treble 20” note at the time of the January trading update, all key revenue stats grew by at least 20% compared with the pre-COVID 1H to December 2019, suggesting very strong momentum in each of the pillars of growth (territory, product and partners) – the aim to generate more revenue, from more customers using more communication channels, in more territories, and through more partners. 22% organic group revenue growth derived from average revenue per customer growth of 20%; additional functionality revenue growth of 20%; international revenue growth of 27%, and allows additional investment in growth in 2H21 and beyond. EMEA (incl. UK), generated significant growth of 21% (1H20: 11%) from increased SMS messaging as a further channel, reducing group gross margin to a still strong 82% (1H20: 94%). EBITDA of £10.5m from revenue of £28.2m led to free cash generation of £3.2m (1H21: £3.1m), with DOTD cashflow seasonally stronger in 2H. The net cash balance of £27.6m (FY21E: £30.3m) leaves all strategic opportunities open to the group. Target 200p (185p).

Companies: dotDigital Group plc

25 Feb 21

CMD shows continued positive progress

Yesterday’s CMD from RBGP saw presentations from the Group CEO and each of the three division heads, outlining the Group’s strategy and updating on progress. Since our investment revisit note (here), which laid out what we expected for FY21E, we have upgraded forecasts for both FY21E and FY22E (here), and have seen continued progress against the investment case. We summarise the key points for each division below. RBGP’s shares are up c.55% YTD to 91p; a 12.1x FY21E PER (11.2x EV/EBITDA) with a 4.8% FY21E dividend yield. Putting the shares on a rating in line with the peer group would suggest an intrinsic value of 120p.

Companies: RBG Holdings Plc

02 Mar 21

Emphatic validation on Oxgene sale, plus upgrades

Mercia has validated the model emphatically with the sale of Oxgene, the second-largest portfolio investment, for £30.7m. This is nearly double the carrying value and a £14.6m realised gain, equating to a 5x return/51% IRR. 3rd party funds also benefited. This underscores embedded value, prudent carrying values and the “Complete Connected Capital” model. An accompanying update points to strong underlying performance which drives a 56% FY21e adj. EBITDA upgrade and +13-15% in outer years. The shares trade at an unwarranted ~30% discount to our revised NAV (+12%) and a ~40% discount to our SOTP intrinsic value.

Companies: Mercia Asset Management PLC

24 Feb 21

Decisive actions to transform the company

Aviva continues to execute rapidly its strategy, leaving France and Turkey. In the last few months, the insurer has realised six transactions. The cash will be used to improve business in the targeted markets (the UK, Ireland, Canada), reduce debt (£1.5bn in 2022) and to distribute a dividend to shareholders (14p per share to be proposed at the upcoming General Meeting).

Companies: Aviva plc

23 Feb 21

WHI Morning Comment: i3 Energy (I3E) - Operational Update

i3 Energy has provided an interim update the highlights of which are: • Production is exceeding expectations with lower declines than modelled resulting in stable production from November 2020 to January 2021 averaging 9,150 boe/d (41% liquids) – about 1,000 boe/d greater than expected by the forecasts of the company's competent persons' reports at the time of its relisting. • Based on the futures curves for oil & gas, the company anticipates net operating income for 2021 (revenue minus royalties, operating costs, transportation and processing) of approximately CAD $35m (US $27.6m). • Maintenance capital expenditure guidance in conjunction with the net operating income amounts to CAD$3m. • i3 Energy completed an 80 hour flow-test on a horizontal Falher well located on its Noel acreage in Northeast British Columbia. The flow test ran for a sustained period at 4,200 mcf/d (700 boe/d) on a 1/4” choke. The well is expected to be brought on production at approximately 500 boepd during the second quarter of 2021, following tie-in. This well was not included in the company's 2P reserve estimates. The result represents a materially value enhancing development. Both the net income guidance and maintenance capital guidance excludes the potential contribution of the Noel acreage. • The Company continues to progress the legal process to allow it to declare a dividend in Q1 2021. As previously disclosed, the Company aims to distribute up to 30% of free cash flow as a dividend to shareholders. • The company indicated that discussions continue with a potential farm-in partner for the Serenity discovery and terms are being negotiated. The recent strengthening in commodity prices has reinvigorated activity within i3's virtual data room, and additional parties previously contacted during early 2020 have now re-engaged with the company. The company indicated that the market will be updated if and when an agreement is reached. (see Table 1 for asset scale/value estimates in relation to the company's North Sea assets).

Companies: i3 Energy Plc

25 Feb 21

WHI First Light: AFC Energy (AFC) - Launch of Anion Exchange Membrane Fuel Cell Test Facility

AFC Energy has this morning announced (RNS Reach) that it has launched its Anion Exchange Membrane (“AEM”) Fuel Cell test facility at the Company's Surrey headquarters. This facility will test and optimise AFC Energy's high energy-density fuel cell technology, HydroX-Cell(S)™, that is currently in development. The design of the new dedicated AEM fuel cell facility was completed in the second half of 2020 with full fit out now complete in advance of full operation.

Companies: AFC Energy plc

01 Mar 21

Resilient results, strong outlook

Results were well trailed in January’s trading update. In the event, adjusted PBT emerged marginally ahead of FY2020, despite material impacts from Covid-19 and a depressed oil price. Although biomass incinerators were closed for much of the second quarter, the Group grew sales from residues from Energy from Waste (‘EfW’) by 15% and signed a further 6 new contracts, maintaining its high win rate. The outlook for EfW remains very strong with c.40 plants in planning or construction that provides the opportunity for Augean to double its current EfW revenues and profits of c.£20m and c.£14m over the longer term. Group operating margins are forecast to reach 25% and cash generation is strong, supporting a 3.5% yield on a resumed forecast dividend. EV/EBITDA multiples for FY2021E, FY2022E and FY2023E are 6.2x, 5.3x and 4.3x, which are well below established industrial sector metrics.

Companies: Augean PLC

02 Mar 21

Strong FY20 Results

Shanta Gold (AIM: SHG), the East Africa-focused gold producer has, this morning, released its full year results for 2020. The company previously announced production and operational figures for 2020 alongside group-wide reserves and resources update. As such the figures reported today are in line with our forecasts down to EBITDA level, but generally better than expected elsewhere– see Fig 1. Overall it has clearly been a strong year financially with revenue, EBITDA and EPS up by 31%, 34% and 270% respectively from the previous year. The company has also kept to its promise of a maiden dividend with 0.10p per share payable in April as part of a semi-annual programme.

Companies: Shanta Gold Limited

02 Mar 21

Mercia Asset Management - The UK’s top regional investor

The £30.7m cash exit from Oxgene underlines management’s success in building a sustainably profitable specialist asset manager, delivering high levels of contracted revenue and providing a filtered pipeline of opportunities for Mercia’s direct investment portfolio. Based on progress to date, we believe Mercia will achieve its three-year strategic plan ahead of time (grow operating profitability, expand assets under management (AUM) to £1bn and ‘evergreen’ the balance sheet by end FY22). By the end of H121, AUM had risen to £872m (15% from FY22 target), with fee-earning funds under management (FUM) of £722m. Despite progress, Mercia’s shares continue to trade at a material 21% discount to net assets (0.79x) or a 30–35% discount when we include the third-party funds business (worth 4.9p at 3% of FUM). This is a substantial discount to its peers.

Companies: Mercia Asset Management PLC

02 Mar 21

Q4: exports & trading mitigate the environment

The utilisation rate remains high despite the depressed environment. Helpe has managed to mitigate part of the low demand in its domestic market by blending its jet fuel into the middle distillate pool, increasing its exports and using its storage capacity for trading purposes. The company stays ready for a pick-up in margins after the vaccine roll-out in Greece and Mediterranean region.

Companies: HELLENIC PETROLEUM (ELPE:)Hellenic Petroleum SA (ELPE:ATH)

02 Mar 21

PMAC Trust - Provides Exposure to a Diversified Portfolio of Loans to Commercial Borrowers

IIR Fund Ratings - More Information can be accessed from www.independentresearch.com.au PMAC Trust (“the Trust”) was established as an unregistered managed investment scheme in December 2015. The Trust is issued issued by Primary Securities Ltd, who acts as Independent Trustee and managed by Private Mortgages Australia Pty Ltd (“PMA’” or “the Manager”). The Trust provides exposure to a diversified portfolio of loans to commercial borrowers, which are used either for property development or business related purposes. Irrespective of the use of borrowed funds, all loans are secured by either registered first mortgages (R1M) or, less frequently, registered second mortgages (R2M) over the borrower’s property as opposed to being secured by cashflows and/or the assets of a particular business. As such, the risk of an impairment on loan principal and across the portfolio as a whole is broadly a function of property market price risk and loan-to-value ratios (LVRs). In this respect, the Manager has a strong historic track-record, having recorded a loss on principal equal to 0.1% of the total loan book at the time over its five year track-record. The Trust has a target allocation of 70% R1M; 25% R2M; and a 5% cash allocation. As a 30 September 2020, The portfolio consisted of a $13.1m loan book consisting of 26 outstanding loans with an average size of $0.41m, a weighted average LVR of 65.4%, and a portfolio split of 72% registered first mortgages (R1M), 13% registered second mortgages (R2M) and 15% in cash. The weighted average loan maturity is a short 8.2 months. The Trust aims to pay distributions on a quarterly basis. There is no explicit target return, but implicitly it is circa at the 9% p.a. level. Since its inception in 2015, the Trust has delivered a 11.54% annualised return to 30 September 2020, net of all fees. INVESTOR SUITABILITY IIR has for some time now viewed Australian private debt as offering one of the most attractive risk-adjusted returns profiles. It is also one of the few asset classes where the skillset of the manager can actually demonstrate the managers capacity to ‘preserve investor capital’. The Trust is an attractive income play and also a thematic play on the continuing evolution of the Australian non-ADI lending market. Non-ADI (private debt) lenders continue to take an increasing share of the overall market due to the unwillingness / inabilities of banks to extend certain loans in the wake of tighter macro-prudential and Covid-19 related workload pressures. The situation, tied with the Manager’s ability to execute loans in a rapid and borrower customised manner presents an opportunity for the Manager to earn and pass on excess returns to investors. From a risk spectrum, we view the investment strategy as being at the low, low-moderate end of the spectrum based on adequate portfolio diversification, the Manager’s prudent and thorough loan and risk management processes, and the nature of the collateral tied with prudent LVRs (even more so given the short duration of the loans). While private debt as an asset class can have liquidity constraints, the short duration loan profile tied with loan repayment date diversification across the loan book supports the quarterly liquidity profile of the Trust. In a world of historically low term deposit rates and ongoing dividend deterioration risk, we continue to view private debt, and including the Trust, as a very attractive alternative for income seeking investors. IIR has also written extensively about Covid-19 and private debt and see it more an opportunity than a risk for select investment managers. RECOMMENDATION IIR ascribes a “RECOMMENDED” rating to the PMAC Trust. The Trust is based on a simple and straightforward investment strategy and objective. And by ‘simple’ we do not mean that in a derogatory way. In contrast, simplicity when has strategy has delivered on or exceed performance objectives can be a solid positive. And the strategy has delivered. The Trust is managed by an experienced team and a manager with an established history in the property sector. The Manager has delivered on its performance objective on its existing loan book, which augurs well for future investors given IIR’s conviction in team and process. Our major criticism of the Trust is the very high level of fees. IIR recognises lower FUM managers warrant higher fees from a viability perspective, and commend the Manager for recently implementing a FUM threshold MER reduction plan.

02 Mar 21

iPartners Investment Fund

Funds Rating by IIR - full report is also available on www.independentresearch.com.au OVERVIEW The iPartners Investment Fund (“the Fund”) was established as a wholesale unit trust on 6 March 2020. The Fund is managed by iPartners Funds Management Pty Ltd (“iPartners’” or “the Manager”). The Fund provides exposure to a diversified portfolio of private credit, asset backed debt, property debt and private credit funds. All loans are secured against a portfolio of loans, receivables or cashflows. The target portfolio allocation is Private credit: 0-40%; Asset backed debt (ABS): 0-40%; Property: 0-40%. As a 30 November 2020, the portfolio split 44% in property, 40% ABS, 11% private credit and 5% in cash. The average loan maturity is a relatively short 12-24 months. The Fund aims to pay distributions on a quarterly basis. The Fund is designed to produce an annual yield of around 8% to 10% (net of fees and costs) measured over the investment horizon with a low degree of volatility. While the track record is limited to data, the Fund has delivered a 10.07% annualised return since its inception, net of all fees. INVESTOR SUITABILITY IIR has for some time now viewed Australian private debt as offering one of the most attractive risk-adjusted returns profiles. It is also one of the few asset classes where the skillset of the manager can actually demonstrate the ability to ‘preserve investor capital’. The Fund is one of the more attractive propositions this analyst has seen in the asset class. In essence, we believe it is very well positioned to capitalise on the private debt premia, which compromises three components: 1) an illiquidity premium; 2) a complexity premium; and, 3) and a supply / demand premium. A premium is not earned until a loan is repaid - i.e., risk mananagement to mitigate defaults and loss-given-defaults (LGDs) is critical. It is here where we believes the Manager excels in the smaller end of the private debt market it plays in. In short, on a pound-for-pound basis, we believe the Fund delivers a compelling risk-adjusted returns value proposition. More broadly, the iPartners platform provides investors single loan opportunities as well (many of which are folded into the Fund), providing investors the opportunity to dial up / down overall risk / return in relation to a larger portfolio investment. At the lower end of the 8-10% target, the 8% level is there to factor in any cash dilution risk. This potential issue is well-managed. In short, we would expect the Fund to continue to deliver in the circa 10% net return range. RECOMMENDATION IIR ascribes a “RECOMMENDED PLUS” rating to the Fund. The basis for the rating is partly described above. The Manager’s ability to extract the premia is based on 1) its expertise in structured finance ABS, with various structural protections in place to mitigate risk in addition to careful borrower selction and, 2) careful co-investor best-of-breed selection for its CRE and business private debt strategies. We talk about an illiquidity premium in private debt. While IIR believes this tends to be overstated, it certainly does exist (the leveraged loans market vs private broadly syndication loan (BSL) / club syndication private deals quantifies the premium). What is attractive in the Fund is that while this is earned, investors have monthly liquidity. The right private debt strategy with the right manager is a ‘no brainer’ in IIR’s view. We do not believe the fundamental of this market in Australia will deteriorate over the foreseeable future. In contrast, investors are well aware of near zero returns on TDs and the impact on equities dividends over 2020 (noting the outlook has improved markedly more recently). Finally, returns to investors are always net of fees to state the obvious. At an all-in 60bps, the Fund is very sharply priced. While exogenous to this review and Fund, we would ultimately encourage iPartners to launch a structured finance ABS specific strategy some

02 Mar 21

Bacanora Lithium: Financing Update

Bacanora Lithium (BNC LN) has fulfilled its funding requirements for the Sonora project in Mexico and is on its way to being a major lithium producer. With equity raises totalling US$96m in the form of a placing after which BCN’s strategic partner opted to exercise its pre-emptive rights and then increase its stake to 28.8%. The support from investors and Ganfeng Lithium, one of the world’s top lithium producers, is a major validation of the project and confirms our long-held view that Sonora would be built.

Companies: Bacanora Lithium Plc

02 Mar 21

IIR Pharma & Biotech Index

SECTOR OVERVIEW Welcome to the first edition of the Pharma & Biotech Newsletter for 2021. To begin with let’s take a look at how the IIR Pharma & Biotech Index has begun the new year. The sector started the year fairly muted with the Index up just 0.5% in January. This was in line with the broader market, with the ASX All Ordinaries Accumulation Index up 0.3%. The top 10 constituents were a drag on the index, falling 2.1% in January. Imugene Limited (ASX: IMU) fell out of the top 10, with Starpharma Holdings Limited (ASX: SPL) re-joining the top 10. PME, the largest company in the index, was clearly the best performer in the top 10 in January, with the share price increasing 25.4%. The share price was buoyed by the announcement of a $40 million, 7-year contract with Intermountain Healthcare for Visage to replace legacy PACS and their speciality systems across Intermountain Healthcare’s 24 hospitals and 200+ clinics THE BEST PERFORMERS OF 2020 We thought we’d kick off the year by taking a look at the top performing companies in the index for 2020. The top 10 performers are tabled below. There were some impressive returns for some of the companies in the index with 29 companies share prices rising by 100% or more. Race Oncology Ltd was the best performer for the year with the share price increasing 821.1%. 4DX was one of the best performers after only listing in August 2020. We note, the performance of 4DX is based on the IPO offer Race Oncology Ltd (ASX: RAC) RAC was the best performing stock in the IIR Pharma & Biotech Index in 2020, with the stock price increasing 821.1% from $0.19 on 1 January 2020 to $1.75 at 31 December 2020. The positive momentum has continued into 2021, with the share price hitting new highs in early February. The share price increase was driven by a number of positive results received for the company’s lead drug candidate, Bisantrene. In June 2020, the company announced the Phase II clinical trials results from the use of Bisantrene in relapsed or refractory Acute Myeloid Leukaemia (R/R AML), a disease with no clearly established standard of care. Bisantrene was found to be well tolerated and after only a single course of treatment had an overall clinical response rate of 40%. Of the 10 patients treated, one patient achieved a complete remission and three patients achieved partial remission. The number of patients treated was small, however, the study treated patients with R/R AML who on average had failed three prior lines of treatment. This makes the findings significant. During the second half of the year, the company expanded its strategic direction after a scientific publication showed Bisantrene to be a potent inhibitor of Fat Mass and Obesity-associated (FTO) protein. Research has shown the FTO protein plays a central role in the proliferation of a wide range of cancers. This new data has transformed the potential use of Bisantrene from a chemotherapeutic to a targeted therapeutic agent with broad application across oncology. The company unveiled its Three Pillar strategy in November 2020 to unlock the potential opportunity of the use of Bisantrene as a precision oncology target as well continuing to pursue the opportunities of the use of Bisantrene as chemotherapeutic agent in AML and Breast Cancer. The company is progressing with a number of clinical trials across all three areas of opportunity. This is definitely a company to keep an eye on in 2021 Rhythm Biosciences Limited (ASX: RHY) The share price of RHY performed strongly over 2020, with the large portion of the increase taking place in the second half of the year. RHY is a predictive cancer diagnostics technology company, the lead product of which is “ColoSAT”, an early detection test for colorectal cancer. ColoSTAT seeks to more accurately detect colorectal cancer via a simple, accurate, low-cost blood test and is aimed at global mass-market screening. Development of ColoSTAT is progressing with preliminary results from the prototype test-kit demonstrating superior performance to both the market standard faecal immunochemical test and commercially sourced biomarker test kits based on testing undertaken by the CSRIO. In addition to completing the prototype test-kit, the company completed a number of milestones during 2020, including: technically validating the key lead and four adjuvant biomarkers, appointment of additional clinical trial sites, ISO13485 Quality Management System certification maintained, completed reagent development program, appointment of global manufacturer and bolstering the IP for ColoSTAT. In January another milestone was reached, with the completion of the initial manufacturing of ColoSTAT test-kits, with performance and verification testing being completed. RHY’s share price has continued its positive momentum in 2021. We anticipate further progression of the development of ColoSTAT will be a catalyst for the share price. Cryosite Limited (ASX: CTE) CTE finished the year trading at $0.395 per share, up from $0.053 per share at the beginning of 2020. CTE provides supply chain logistics, management of pharmaceutical products in clinical trials and management of biological materials and long-term storage of cord blood and tissue samples. During 1H’CY20, the company focused on positioning the company for long-term growth, spending $1 million on infrastructure and operating improvements. This has positioned CTE to take on far larger markets by expanding services into adjoining markets and customers. The company operates predominantly in the clinical trial logistics market. This is subject to stringent international standards and Australian government mandated compliance and licencing requirements, creating high barriers to entry. These same standards apply to products listed on the Register of Therapeutic Goods, which represent a much larger market than clinical trial logistics. The company will be seeking to expand into this market with a focus on attracting low volume, high value, temperature controlled, highly regulated drugs, which is CTE’s speciality. CTE reported FY20 revenue of $8.9 million, up 12.7% on the pcp, and NPAT of $1.5 million, a turn around from the $0.6 million loss in FY19. The company has started off FY21 on a positive note, with 1Q’FY21 sales revenue increasing 22% and positive operating cashflow of $248,000. At 30 September 2020, CTE had cash of $4.1 million. The company has experienced significant challenges over the last few years with the share price falling from a high of $0.60 per share in October 2013 to a low of $0.03 in 2019. Given the challenges experienced, the company is progressing with cautious optimism with respect to generating a return on capital. Imagion Biosystems Limited (ASX: IBX) IBX is developing a new non-radioactive and safe diagnostic imaging technology. Using its MagSense technology, the company is focused on the detection of cancer and other diseases earlier and with higher specificity than is currently possible. The MagSense System and Test for staging HER2 breast cancer received a Breakthrough Device designation from the FDA in July 2019. During 2020, the company took significant steps towards the development of its early detection technology culminating with the company gaining approval from the Human Research Ethics Committee (HREC) for the MagSense Phase I clinical study for metastatic breast cancer with enrolments for the study commencing in December. The study will be conducted in Australia with Monash Health being the first clinical site for the study. The company raised $11 million (before costs) in the 1H’FY21 to progress development of the MagSense technology. Funds will enable the company to accelerate development plans in parallel with the Phase I study, including scaling up manufacturing, product development for additional indicators, and a larger pivotal study in the US. Anteotech Ltd (ASX: ADO) ADO had a breakout year in 2020 with the share price up 387.4% and the positive momentum has continued into 2021 with the share price hitting new 52 week highs. In July 2020, the company announced the development of a high sensitivity rapid antigen test for COVID-19 using the company’s activated Europium particle technology. The company promptly completed Proof of Concept and Design Verification phases of development with high sensitivity achieved in the internal Design Verification stage, the results of which were verified by an independent study. The company has progressed to clinical trials which will be followed by commercialisation if the trials are successful. The company is expecting to have the product ready for launch to the market in 3-5 months. The company is also seeking to combine the test to detect COVID-19 and Flu A/B from a single test. Further progress towards commercialisation of the COVID-19 rapid antigen test is expected to act as a further catalyst for the share price. COMPANY NEWS Below we look at stocks in the IIR Pharma & Biotech Index that made notable announcements during the month that were received well by the market. These include: Prescient Therapeutics Limited (ASX: PTX), Nyrada Inc (ASX: NYR); Noxopharm Limited (ASX: NOX); Antisense Therapeutics Limited (ASX: ANP); and Rhythm Biosciences Limited (ASX: RHY). Prescient Therapeutics Limited (ASX: PTX) PTX performed strongly in January with the share price up 64.2%. During the month, the company announced the internal development program for the OmniCAR platform. The development program will focus on cancer targets for three indications where first generation CAR-T therapies have faced challenges and where the OmniCAR platform may improve treatment. The program will include: � OmniCAR CD33 and CLL-1 for Acute Myeloid Leukaemia (AML); � OmniCAR HER2 for HER2+ solid tumours including breast, ovarian and gastric cancers; and � OmniCAR HER2 and EGFRviii for glioblastoma multiforme (GBM). The OmniCAR technology is expected to provide benefits over current generation CAR-T therapies including: titration for improved safety; the ability to switch antigen targeting; co-arming CAR-T against multiple antigens simultaneously; persistent dosing; and tumour microenvironment enhancements to improve efficacy. The development program will move the platform towards clinical programs in addition to demonstrating the features of the technology to unlock future value. Nyrada Inc. (ASX: NYR) NYR is a drug discovery and development company specialising in novel small molecule drugs to treat cardiovascular and neurological diseases. The company has two main programs: (1) cholesterollowering drug; and (2) a drug to treat brain injury, specifically traumatic brain injury and stroke. During the month, the company announced further results from the NYX-PCSK9i In Vivo study. The study is seeking to evaluate the effectiveness of the company’s PCSK9 inhibitor to lower LDLcholesterol, a leading cause of cardiovascular disease. The results built on the previously announced 57% reduction in total cholesterol, showing that LDL cholesterol levels were lowered in a dose-dependent manner. The data supports the continued development of the drug candidate towards in-human clinical trials. It also confirms the use of NYX-PCSK9i as a potential oral treatment that can be combined with a statin to assist those patients that can’t reach their targeted LDL cholesterol levels by taking a statin alone. The next step for the company in addition to further safety testing is to determine the level of enhancement that can be achieved by combining NYX-PCSK9i with statin, the most commonly prescribed drug to lower cholesterol. NYR plans to develop an oral medication for patients with high cholesterol giving them a more convenient option than the current treatment, which involves regular injections. NYR’s share price was up 62.5% in January to close the month trading at $0.39. This is a 95% increase on the IPO offer price of $0.20 in January 2020. Noxopharm Limited (ASX: NOX) NOX’s share price continued its positive momentum in January, with the share price up 41.8% for the month. The market responded positively to the Shareholder Update provided by the company. The company is progressing the development of its lead drug candidate, Veyonda. Veyonda seeks to be used as an adjuvant to existing cancer treatments to reduce resistance to these treatments and allow them to be more effective in targeting cancerous cells. The company is currently progressing three studies with Veyonda: � IONIC study - a Phase I/II study testing the ability of Veyonda to boost the response to Bristol Myers Squibb’s immuno-oncology drug, Opdivo. � LuPIN study - a Phase II study to test the ability of Veyonda to boost the response to Novartis’s radiopharmaceutical, LuPSMA-617. � DARRT-2 study - a Phase II study testing the ability of Veyonda to achieve high rates of abscopal effect in patients with prostate, breast or lung cancers. An abscopal response occurs when the treatment of a targeted tumour with radiotherapy results in the concurrent shrinkage of non-targeted tumours. If Veyonda is proven effective, we expect this to be a highly valuable drug and we expect positive results from the studies to continue to be catalysts for the share price. Antisense Therapeutics Limited (ASX: ANP) ANP’s share price increased 38.5% with the share price boosted by the initiation of broker coverage. ANP is developing ATL1102, an antisense inhibitor of the CD49d receptor for Duchenne Muscular Dystrophy (DMD) patients. ATL1102 has completed a Phase II efficacy and safety trial, significantly reducing the number of brain lesions for patients with relapsing-remitting multiple sclerosis. In 4Q’CY2020, ATL1102 received Orphan Drug Designation for DMD in both Europe and the US. Orphan status provides development and marketing incentives, such as reduced fees, scientific advice and market exclusivity for a period of time upon regulatory approval. In November 2020, the company dual listed on the Frankfurt Stock Exchange in an effort to broaden the international investor base in line with the planned clinical development of ATL1102. Rhythm Biosciences Limited (ASX: RHY) RHY continued its positive momentum with the share price up a further 34.3% in January. As discussed above, RHY was one of the best performers in the Pharma & Biotech Index in 2020. RHY is a predictive cancer diagnostics technology company, the lead product of which is “ColoSAT”, an early detection test for colorectal cancer. ColoSTAT seeks to more accurately detect colorectal cancer via a simple, accurate, low-cost blood test and is aimed at global mass-market screening. During the month, RHY announced that the initial manufacturing of the ColoSTAT test-kits had been completed and that the clinical trial had been expanded to a 10th site. We anticipate the continued progression of the development of ColoSTAT will be a further catalyst for the share price.

Companies: Noxopharm Ltd.

02 Mar 21

Strong finish to the year; new products hold the key for the future

Benefiting from robust growth in the Injectables and Generic segments and an acceleration in sales in Europe and ROW, Hikma reported better than expected results in H2 20. The recently-approved Vascepa’s generic is likely to be a key source of growth in the coming years. Moreover, the upcoming launch of Advair Diskus should bolster growth in the mid-term. Success in cracking one of the most difficult drugs, Advair Diskus, reiterates Hikma’s generic manufacturing prowess.

Companies: Hikma Pharmaceuticals Plc

02 Mar 21

A good liquidity endurance but lack of short-term catalysts

Accor’s FY20 results suffered from the global travel restrictions and fewer travellers, but were broadly consistent with the market’s expectations and the liquidity position remained solid as usual. However, we do not expect a much better FY21, especially the cheerless H1.

Companies: Accor (AC:EPA)Accor SA (AC:PAR)

02 Mar 21

Aspire Global - Investigating how to enhance growth

Aspire Global (AG) has announced a review of the role of the B2C segment (proprietary online gaming brands) in the group structure. The motivation for the review is to identify how best to accelerate the segment’s revenue growth profile, and thus the overall group profile. Potential outcomes include the sale of the segment or to merge it with another similar business, and management expects that the B2C brands would likely continue to be customers of its B2B segment. As well as providing profitable growth to AG since its IPO in FY17, strategically the segment has provided insight into wider product development in iGaming for the rest of the group. The B2C segment has provided CAGRs in revenue and EBITDA of c 13% and c 10% respectively since FY16, versus the group averages of 29% and 24%. CEO Tsachi Maimon discusses the review of the B2C segment in the following executive interview.

Companies: Aspire Global Plc (ASPIRE:STO)Aspire Global Plc (ASPIRE:OME)

02 Mar 21

Listed Managed Investments Monthly - February 2021 - Independent Investment Research LIC/LIT/ETF Research Scheme

Full Report can be accessed on www.independentresearch.com.au Evans & Partners LITs Cease Trading on the ASX During January, three of the Evans & Partners LITs ceased trading on the ASX after unitholders voted in favour of transitioning the fund from a LIT structure to an open-ended unit trust. The three LITs that ceased trading were the Evans & Partners Asia Fund (ASX: EAF), Evans & Partners Global Flagship Fund (ASX: EGF) and Evans & Partners Global Disruption Fund (ASX: EGD). The decision to delist the funds and transition to an openended trust was based on changes to the market conditions which the Investment Manager and Responsible Entity felt the listed trust structure was no longer the best structure for unitholders. The units had been trading at a discount to NAV leading into the decision. The open-ended trust structure will allow for unitholders to redeem units at the NAV (less a spread). The IIR ratings for the funds remain subject to a review of the new structure. Shareholders Taking Advantage of NAC Bonus Options In March 2020, NAC completed a 1-for-2 bonus option issue for shareholders. The issue was conducted to raise funds to grow the investment portfolio. The Manager believes the optimal portfolio size for NAC is $200-$300 million. 23.8 million options were issued under the offer. The options have an exercise price of $1.03 and can be exercised on or before 31 Match 2023. Shareholders have been taking the opportunity to convert some of their options and buy NAC shares at a discount to NTA with ~580,000 options exercised at the date of publish of this update. The company’s pre-tax NTA has been above the exercise price of $1.03 since June 2020 with the pre-tax NTA at 31 January 2021 of $1.23. BTI’s Discount at Narrowest in 4 Years At 31 January 2021, BTI was trading at a discount to pre-tax NTA of 8.6%. This is the first time the LIC has traded at a single digit discount since December 2016, based on month-end share prices. The market is starting to appreciate the value of the portfolio of underlying investments. Throughout 2020, the company traded at a discount to pre-tax NTA as high as 47% with the share price hitting a low of $0.49 in March 2020. BTI was trading at $1.28 per share at January-end 2021. WAX Trading at a Significant Premium WAX was trading at a premium to pre-tax NTA of 43.9% at 31 January 2021. Over the 12 months to January-end, the company has traded at an average premium to pre-tax NTA of 33.6%. The company’s ability to provide an increasing dividend stream to shareholders is proving very valuable to shareholders, particularly given the experiences in 2020 with some of the individual stocks that were relied upon for income by investors having to suspend or cut dividends. The Impact and Recovery from the COVID-19 Downturn The jury seems out whether COVID-19 in 2020 was a true Black Swan event. Nassim Nicholas Taleb, the originator of the term, says that for an event to be classified as a Black Swan “nothing in the past can convincingly point to its possibility”. Given mankind’s history of pandemics it has been argued that the COVID-19 pandemic probably wasn’t a totally unpredictable event. While perhaps semantics the COVID-19 crisis was largely unforseen and created a short sharp shock for the markets in 2020. To surmise, 2020 was a rollercoaster ride for global financial assets. During January and February the markets seemed to be powering ever higher, March however saw a swift decline as the markets reacted to the COVID-19 pandemic finally absorbing the full implications of the crisis and consequent shutdowns. After a short sharp sell-off in March, there was much speculation whether markets would see a V shaped recovery or was it to be an L or even W shaped pattern. Yet about ten weeks after the low was hit and despite the fact that COVID was still rampant, around 80% of the losses were recovered. We have now reached almost a year since the onset of the crisis and it has proved thus far to be a strong V shaped recovery. In the light of the markets again flirting with record highs, we look at how the LMIs (includes LICs and LITs) have coped with the crisis. The traditional tool for measuring risk has been the standard deviation of returns, however the measure that perhaps provides a better assessment of security and portfolio risk is drawdown. Drawdown measures the difference in value from the most recent peak to the most recent trough in the market measured as percentage. We have examined the LMI sector drawdowns for calendar year 2020 using the peak reported pre-tax NTA/NAV prior to the crisis (in January/February) and then the lowest reported pre-tax NTA/NAV after that (invariably March). The below graph, shows the average drawdown of the various LMI sectors based on reported pre-tax NTAs. The group averages show that the pure Equity exposed LMIs overall fared the worst. Unsurprisingly, LMIs primarily exposed to Fixed income had the lowest average drawdown while Australian Mid/Small Cap Equity orientated LMIs fared the worst. However, Fixed Income LMIs have recovered the slowest over the year while the Mid to Small Cap Equity LMIs have not only recovered but in many cases surpasses their pervious highs. Interestingly there seems to a regional bias with LMIs targeting the Emerging Market appearing to fare better on the drawdown measure than LMI targeting the traditional markets; but we note the small sample size (three Emerging Market LMIs) may play a factor.

02 Mar 21

BNK Banking Corporation Limited (ASX: BBC) - Research Update

Research Update 2Q’FY21 TRADING UPDATE BNK Banking Corp (ASX: BBC) is a diversified financial services company with operations across banking and mortgage broker aggregation. BNK has been one of the fastest growing mortgage aggregators in Australia and combined with the banking segment offers a range of lending and deposit solutions across a large distribution network. KEY POINTS Aggregation Segment Continues to Drive Loan Book Growth: The Aggregation segment experienced strong settlement and loan book growth in the December quarter. Loan settlements were at the highest quarterly levels to date of $5.3 billion, seeing the loan book close above $50 billion. A key driver of loan growth in the Aggregation segment is the increased number of loan writers, which has grown at a faster rate than we forecast. At 31 December 2020, the Aggregation segment had a network of 1,910 loan writers. This represents growth of 9.8% in 1H’FY21. In addition to this, the average size of the settlement per broker has increased in 1H’FY21. The Company’s total loan book grew 5.2% over the December quarter to $52.6 billion. On the back of buoyant lending conditions, we are forecasting the total loan book to grow to $57.3 billion in FY21. Banking Segment Sees Strong Settlement Demand: The Banking segment recommenced on-balance sheet lending in the December quarter with strong settlements of $35.7 million. The loan book closed above $300 million at December-end, up 8.9% over the quarter and up 14.4% Year-on-Year (YoY). The bank is well positioned to continue to grow the loan book with solid growth in the deposit base and the Tier 2 subordinated note issue. Funding Mix Continues to Improve: The funding mix of deposits continued to improve in the December quarter with transaction accounts increasing 50.4% to $245.6 million. Transaction accounts now account for 65% of the deposit mix. Transaction accounts drove the growth in the deposit base with the bank having deposits of $391.3 million at Decemberend. This is an increase of 20.5% increase Quarter-on-Quarter (QoQ) and a 13.2% increase for the 1H’FY21. $8.75m Raised Through a Subordinated Note Issue: In February 2021,the company completed a Tier 2 subordinated note issue raising $8.75 million. The notes were issued to sophisticated and wholesale investors and have a maturity date 10 years from the settlement date with a call date 5 years from the settlement date. The notes will pay interest on a quarterly basis at a floating rate of 90 day BBSW + 5.40% p.a. At the current 90 day BBSW of 0.015%,the interest payment would equal 5.415% p.a. The capital raised from the subordinated notes puts the Company in a strong capital position from a regulatory perspective. Price Target: We have upgraded our price target from $1.12 to $1.19 per share. This represents a 63% premium to the share price of $0.73 at 22 February 2021. The upgrade is driven by two key factors: (1) Faster than expected growth in the Aggregation segment in 1H’FY21 has offset a reduction in forecast net interest income due to a reduction in forecast settlements in the Wholesale segment and declining interest rates; and (2) We have amended the price target calculation to be based on normalised earnings to better reflect the value of the continuing operations of the Company.

02 Mar 21

Solid 2020 figures, increased dividend

The net profit attributable to shareholders declined by 13% to CHF1,046m in 2020 compared to 2019 mainly impacted by two one-off effects which are unrelated to COVID-19 The DPS proposal rose from CHF20.00 to CHF21.00 for FY2020 All financial targets of “Swiss Life 2021” were confirmed despite the COVID-19 crisis

Companies: Swiss Life Holding AG

02 Mar 21

SP Angel Healthcare Conditions- 02-03-2021

IXICO plc (IXI.L): New contract

Companies: IXICO Plc

02 Mar 21

Aspire Global - executive interview

02 Mar 21

Keywords Studios - Looking like a winner as the dust settles

Buoyed by exceptional demand for games during lockdown and boosted by the start of the console transition, the global games industry showed year-on-year growth of 20% in FY20 (Newzoo). Benefiting from increased industry development spending and the growth in new releases, Keywords delivered underlying organic revenue growth of 12%, with FY20 revenues rising 14% y-o-y. Assuming no worsening impact from COVID-19, FY21 looks set to be a more settled year. With publishers launching increasing numbers of new titles to address a growing next-gen console base in FY21–23, demand for Keywords’ services should continue to build in the short to medium term. The outlook for Keywords appears positive and, with net cash of c €100m (plus €100m of undrawn facilities), Keywords remains well placed to participate in earnings-enhancing M&A.

Companies: Keywords Studios plc