Good Evening,

Welcome to the ASX News Daily Recap. Lost track of what happened on the market today? Don’t stress. We’re here to catch you up.

Here’s a sample of what you may have missed:

1. 🪨 Fortescue’s Surprise Departure

2. ✈️ Travel Stocks Continue Resurgence

3. 🏢 Evergrande Sinks On Market Return

4. 🏠 U.S. Homes for 1% Downpayment?

5. 🌔 From Bollywood to Moonwalk

The Recap

Fortescue Loses Another CEO

As Travel Stocks Bounce

The ASX200 started the week positively, finishing 44.6 points higher, with 10 of the 11 sectors in the green. A better-than-expected July Retail figure drove the Discretionary sector 1.36% higher. Healthcare also rose by 1.45%, with CSL (+1.72%), Cochlear (+0.52%) and Sonic Healthcare (+1.04%) all trading higher on the day.

Fortescue Metals was the largest company to report today, falling by 5% after a surprising CEO change, with incumbent Fiona Hicks suddenly resigning. More on that later.

Travel and Leisure stocks look to be bouncing back, with HelloWorld and EVT Ltd rising today. The pandemic impacts on travel companies are now well and truly in the rearview mirror as travellers hit the road again. This followed QANTAS's record earnings report on Friday.

Overseas, China lowered the levy on stock trades from 0.1% to 0.05% to “invigorate capital markets and boost investor confidence”. It seemed to work, at least for today anyway, as the CSI300 index rose as high as 5.5% in early trade today before closing 1.2% higher.

ASX200 Stock Snapshot

Wall Street

The Jackson Hole speech delivered a whole lot of nothing, with the Fed Powell and ECB Lagarde indicating a “higher for longer rate” approach to continue taming inflation at the Jackson Hole Symposium.

Nothing that markets already knew.

“We are attentive to signs that the economy may not be cooling as expected,” Powell said. “We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

Both the S&P500(+0.67%) and NASDAQ(+0.94%) finished higher as markets seemed to ignore warnings that rates may not have reached their peak.

Economic News

It’s a busy week for economic data in the U.S., with Q2 GDP Data, Employment Figures, and July CPI some of the critical data points to drop this week.

• Australian retail sales rose 0.5% in July, beating forecasts of a 0.3% gain after a higher-than-expected fall in June. Department store sales saw the largest rise (3.6%), followed by clothing, footwear and personal accessory retailing (2.0%).

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Quick Singles

🪃 Local News

• Maggie Beer sales fell 1.4% to $88.7 million due to decreased consumer spending. However, the company reported a positive NPAT of $462,000, compared to a loss of $12.3 million in FY22.

• InvoCare shares finished 0.6% higher as the company reported a 2% revenue rise to $289.2 million, as mortality rates stabilised. The company expects the acquisition from P.E. firm TPG to be completed in the final qtr. of this year.

• Shares of lithium miner Sayona Mining plummeted 27% following the sudden resignation of CEO Brett Lynch.

• NextDC recorded Revenue of $362.4m, which was above the company’s guidance and 25% higher than last year. The full-year net loss was $25.6 million as energy costs rose by 270% during the year.

• Link Admin. reported a bottom-line loss of $418 million for FY23 due to heavy writedowns connected with the exit from its United Kingdom operations. Revenue rose 4.5% to $1.2 billion due to higher Retirement & Superannuation Solutions member numbers.

• Imdex reported a 22% drop in NPAT to $35 million, attributed to the acquisition and integration costs of mining tech company Devico. However, they achieved revenue of $411.4 million, up by 20%.

🌏 Around The Globe

• China's most-indebted developer, Evergrande Group, saw an 81% slump in trading after a 17-month halt, driving them to ‘penny stock’ status. Their market value plummeted to HK$4.6 billion ($586 million) from a peak of over $50 billion in 2017 due to more losses.

• Sandwich chain Subway has been sold to private equity firm Roark Capital in an undisclosed deal estimated to be $9.6 billion. Subway had been privately owned for over five decades.

• Maui County is suing Hawaiian Electric for causing deadly wildfires due to negligence in maintaining the power grid during high winds and dry conditions.

• Walmart has partnered with Wing drone delivery service to expand their delivery services to 60,000 more homes in Dallas.

• Zillow Group is offering mortgages with just a 1% down payment to attract house hunters - What could go wrong?

  

  Gif by DailySignal on Giphy

₿ Crypto Corner

• Bitstamp will end its crypto staking services in the U.S. amid an SEC crackdown on staking.

• Mastercard and Binance will end their four crypto card programs in Argentina, Brazil, Colombia and Bahrain.

Movers and Shakers

✅ Biggest Gainers

Helloworld (HLO) shares bounced 6.0%, with the company reporting a strong FY23 result underpinned by returning traveller demand, removal of border restrictions and increasing supply capacity.

Helloworld reported an NPAT from continuing operations of $19.2 million, a significant improvement from the $28.8 million loss last year. Total Transaction Value more than doubled to $2.57 billion (see below) as international borders reopened in FY23. The company expects to see a continued rise in booking volumes as Asia fully reopens.

Revenue and other income increased to $165.9 million, up from $69.3 million in FY22, an increase of 139.5%.

Before today’s announcement, shares in HLO were up over 56% in the last 12 months.

EVT Ltd (EVT) posted full-year earnings, which were received positively by the marker as the entertainment and leisure company reported record results for its Hotels and Thredbo business.

NPAT surged by a whopping 99.8%, at $106.5 million, backed by a 25.4% increase in its normalised Revenue, reaching $1.2 billion. EVT attributed the record result from Thredobo to its new business model, focussing on better capacity utilisation and delivering a premium experience. Revenue from this segment increased by 65.3%, and EBITDA rose by 144.1% compared to the previous year.

The company’s Entertainment division also showed promising signs of recovery, with a 21.4% increase in underlying Revenue. Despite challenges like the Hollywood writers' and actors' strikes and unpredictable weather conditions affecting Thredbo's winter season, EVT remains optimistic about the future.

A fully franked final dividend of 20 cents per share was declared. EVT shares ended the day up 2.6% to $12.35.

🔻Biggest Fallers

Appen’s (APX) share price took another big hit today, falling by 32.1% to a 7-year low of $1.52 as the company warned it continues to face headwinds as customers evaluate their A.I. strategies.

The A.I. data company reported a Statutory Loss of $43.3 million for 1H23, which included $5 million in costs related to their reduction program and one-off expenses of $1.3 million associated with strategy refresh.

Group revenue of $138.9 million decreased 24.0%, primarily reflecting a lower contribution from Global Services, which Appen said was due to customers cutting costs and evaluating their A.I. strategies. Appen said it expects 2H FY23 revenue to be closer to 1H FY23 revenue with an annualised run-rate operating cost base lower than $113 million. Read more about Appen’s report here.

Brainchip’s (BRN) once-bubbly share price is losing its froth, shedding 10.7% to close at $0.29, well down from the dizzying heights of $2.09 in January 2022.

Brainchip, a commercial producer of neuromorphic artificial intelligence I.P., unveiled its half-year results for 2023, reporting a loss of $17.1 million. This was a significant increase from the previous year's loss of $8.3 million.

Revenue dropped to $115,606 from $4.8 million in 2022, which the company said was attributed to being in the early commercialisation phase, which brings revenue volatility. Brainchip stated that several clients had postponed their assessment of the company’s tech.

Expenses rose by 30% due to share-based non-cash remuneration and increased employee costs in R&D and sales & marketing. Cash on hand at the end of June 30 was $21.8 million.

Deep Dive

From Record Shipments to CEO Exits

Fortescue Metals Group reported its financial results today, revealing an underlying NPAT of US$5.5 billion for the fiscal year ending June 2023.

The big news, however, was the surprise department of Fiona Hick and the appointment of Dino Otranto as the new Chief Executive Officer.

Financial Summary

• Fortescue reported an Underlying NPAT of US$5.5 billion for FY23.

• Despite record iron ore shipments of 192 million tonnes, the company's Revenue dipped by 3% to US$16.9 billion. Shipments landed at the top of the company’s guidance.

• Underlying (EBITDA) also saw a 6% decrease, finishing at US$10 billion.

• The company declared a fully franked Final Dividend of A$1 per share, taking the total dividends for FY23 to A$1.75 per share.

Fortescue provided an update on its new high-grade project, Iron Bridge, which began production in May 2023. Fortescue said it aligned operating costs with market conditions to keep C1 cost estimates at around US$45 per wet metric tonne. However, a pre-tax impairment charge of US$1 billion was recognised due to a review of asset carrying value. This was mainly due to the assembled plant, pipeline infrastructure, and costs related to the pilot and demonstration plants and capitalised interest. Higher interest rates caused an increase in discount rates, further affecting Iron Bridge's impact.

Management Shuffle

Onto the day's surprise, Fortescue Metals announced the departure of Fiona Hick, who had only been appointed as the leader of Fortescue’s iron ore division six months prior. Dino Otranto, previously the operations boss, has been promoted to Chief Executive Officer. Otranto, who joined Fortescue in 2021, brings over two decades of experience in the global energy and resources industry. Hick's exit marks the tenth senior executive departure from Fortescue in three years.

Outlook

Despite the management shake-up, Fortescue said it remains committed to its strategic objectives. It has made significant strides in decarbonisation, including deploying the first battery electric haul truck in the Pilbara.

The company has also realigned its operating segments to Fortescue Metals and Fortescue Energy, reflecting the distinct strategic objectives of each division. With a strong balance sheet and a focus on sustainable growth, Fortescue is poised to navigate the challenges and opportunities that lie ahead.

Fortescue shares ended the day down 5% to $19.87.

What The?

Moon's South Pole Gets a Visitor:
Cosmic Gold Rush Awaits?

India has etched its name in lunar history by becoming the first nation to touch down near the moon's south pole. The Chandrayaan-3 mission, which sounds like something straight out of a sci-fi novel, made its grand entrance on the moon's stage, marking India's stellar rise as a space powerhouse.

As folks back home were glued to their screens, the spacecraft descended, reminiscent of a dramatic movie climax. Prime Minister Narendra Modi, watching from South Africa, couldn't help but wave the Indian flag, echoing the sentiments of millions: "We can all aspire for the moon and beyond."

While the moon has seen visitors from the then-Soviet Union, the U.S., and China, none ventured as far south as India did. And though the lunar journey had its share of hiccups in the past, India's recent success is a testament to its resilience and ambition.

But why the South Pole? Well, it's not just about planting a flag. Scientists believe this region could be rich in critical minerals essential for various technologies back on Earth. These minerals, often rare on our planet, could potentially revolutionise the electronics and renewable energy industries. Think of it as a cosmic pit stop for rockets needing a quick refuel.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of August 22

1. Flight Centre (FLT) - 10.39%

2. Pilbara Resources (PLS) - 8.66%

3. JB Hi-Fi (JBH) - 8.53%

4. IDP Education (IEL) - 8.14%

5. Brainchip (BRN) - 7.82%

6. Syrah Resources (SYR) - 7.55%

7. Lake Resources (LKE) - 7.25%

8. Elders Limited (ELD) - 7.17%

9. Mesoblast (MSB) - 7.07%

10. 29Metals (29M) - 6.96%

📊Broker Ratings

What do the brokers have to say?

There were several companies with broker rating changes today; see the complete list here

💲Dividends

Companies trading ex-dividend today

1. Aurizon Holdings AZJ - $0.08

2. Australian United Investment Company AUI - $0.20

3. Challenger CGF - $0.12

4. Coronado Global Resources CRN - $0.005

5. Diversified United Investment DUI - $0.09

6. Domino's Pizza DMP - $0.426

7. Emerging Growth ECP - $0.029

8. Hansen Technologies HSN - $0.05

9. Pinnacle Investment Management Group PNI - $0.204

10. Santos STO - $0.136

11. Winton Land WTN - $0.02

📅 Economic Calendar

Data to keep an eye on this week

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.