RBC Capital Markets has just started covering Chrysos Corporation Ltd (ASX: C79), and its analysts believe the innovative gold assay technology company is undervalued.

The broker has issued a new research note on Chrysos, with a bullish share price target, which I’ll get to shortly.

First, let’s look into what they’re saying about the company.  

Innovative assay technology

Chrysos has developed a technique to analyse mining samples, which RBC says is displacing existing “centuries old” techniques because it is faster and cleaner, with similar pricing.

The company also has an innovative business model, leasing its machines to customers, which provides a recurring revenue stream.

RBC estimates that Chrysos has to date only penetrated about 10% of its total addressable market in the gold sector, providing it with a substantial growth pathway.

The broker said in its report:

Chrysos’s PhotonAssay technology is a demonstrably superior alternative to the centuries-old fire assay method that is non discretionary for every gold miner globally. The growth runway is long and visible, underpinned by an expanding contracted pipeline across 23 countries and endorsements from the world’s largest miners including Barrick, Newmont, and Gold Fields. The majority of the machines are with independent labs, including several of the world’s largest (ALS, Bureau Veritas, Intertek, MSALABS and SGS), with an increasing number deployed on-site at major mines.

Chrysos, RBC said, was charging its customers a minimum monthly amount, with volume-linked upside.

Each machine costs about $4m to produce and install, and generates about $2 million in annual revenue per year.

RBC said they estimated that over a 20 year life, each unit would produce $40 million in revenue.

The broker added that the company did not have any credible competition.

There are no known competing or copycat technologies in the market today. The most credible long-term threats would likely originate from large instrument manufacturers, Chinese state-linked science/industrial companies, or the incumbent lab giants themselves. That said, we believe Chrysos’s pace of deployment and deepening customer entrenchment make that window harder to exploit with each passing year. Other factors working in Chrysos’ favour are: actively defended patent portfolio; highly specialised components; four major global lab companies are already aligned with Chrysos; and development of next gen units and solution analysis extensions continue to widen the technology gap.

RBC said the company was fast-growing and highly-profitable, but free cash flow would remain negative for the next five years due to capital expenditure for new units.

Shares looking cheap

RBC has a price target of $9.25 on the company, which is 36% higher than the current level of $6.80.

Chrysos is valued at $776.3 million.

The post This ASX gold technology company could rise by more than a third, RBC Capital Markets says appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Chrysos. The Motley Fool Australia has positions in and has recommended Chrysos. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Australian house prices have much further to fall, AMP Chief Economist Shane Oliver argues, as a “perfect storm” of interest rate rises, tax hikes for investors and poor confidence hit the market.

House price falls just getting started

In a recently released report, Dr Oliver said that Cotality figures show national home prices fell 1.1% in September, bringing falls to date to slightly more than 5%.

But he warned much worse was to come.

Dr Oliver said:

Further falls are likely as home prices are being hit by a perfect storm of rate hikes, tax hikes on investors, poor confidence and poor affordability depressing demand with a high risk of distressed sales flowing from higher mortgage rates and unemployment. We now expect national average property prices to have a top to bottom fall in prices of 10-15%, of which they have done 5.2% so far. Sydney, Brisbane and Adelaide are likely to see the deepest falls, whereas Melbourne is likely to have a shallower decline.

Dr Oliver predicted the market would bottom out around the June quarter next year, before a modest recovery in 2027-28 as the Reserve Bank of Australia (RBA) moved to start cutting official interest rates.

He added that units and lower end property would likely not drop as steeply given they didn’t appreciate as much, and because they benefit from the expanded first home buyers 5% low deposit scheme.

Dr Oliver said the negative factors affecting the market were currently outweighing the upward pressure from a shortage of housing.

He added:

Were it not for three key supports the property market would be a lot weaker. These are: the accumulated housing shortfall of an estimated 200,000 to 300,000 dwellings; vendors not being in a rush to sell just yet aided by still low unemployment; and the expanded first home buyer 5% deposit scheme which is helping to support lower priced entry level houses and units. However, despite these supports, the Australian housing market is still likely to weaken significantly further as higher mortgage rates, the removal of most property tax concessions, record poor affordability and poor confidence continue to impact at a time of a rising risk of distressed selling.

Rate rises likely off the cards

Dr Oliver said he believed the RBA would not raise interest rates again, but, “we don’t see it cutting rates until the second half next year”.

He added that given there is still uncertainty about the full impact of the property tax changes on demand, “the risk remains on the downside”.

The post How much further will house prices fall, according to AMP’s chief economist? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

September was a disappointing month for the S&P/ASX 200 Index (ASX: XJO), which fell almost 3.2% to end at 8,789.3 points.

The good news is that not all ASX 200 shares fell with the market. In fact, some were able to defy the weakness and charge higher.

Here’s why these were the best-performing shares on the ASX 200 in September:

Codan Ltd (ASX: CDA)

The Codan share price was a very strong performer and recorded a gain of 40%. The catalyst for this was the release of a trading update late in the month from the technology products company.

Codan revealed that group net profit after tax for the first half of FY 2027 is expected to be at least $160 million. This will be more than double the $71.2 million it recorded in the prior corresponding period.

This has been driven by robust demand for metal detectors and exceptionally strong demand for its communications products. 

Speaking about its full-year outlook, the company said:

While current indications are that the elevated sales order momentum in the Communications segment may continue into H2 FY27, order visibility in conflict regions is low and it is too early to determine whether the elevated demand and margin experienced in H1 FY27 will continue in H2 FY27. Balancing these factors, Codan is currently targeting full-year FY27 revenue growth for the Communications segment to be in the range of 30% to 40% compared to full-year FY26. 

Ingenia Communities Group (ASX: INA)

The Ingenia share price wasn’t far behind with a gain of 32% in September.

Investors were buying the communities developer’s shares after it received a series of takeover offers. While two of the proposals were rejected, the ASX 200 share is still considering an improved offer received late in the month from Warburg Pincus.

Its third offer was $5.25 cash per share, up from its previous offers of $4.75 per share and $5.05 per share, respectively. In response to the offer, Ingenia stated: 

The Ingenia Board is assessing the Further Revised Indicative Proposal with the assistance of its financial and legal advisers and will update securityholders in due course.

Megaport Ltd (ASX: MP1)

The Megaport share price was on form and raced 25% higher over the month.

Last month, Megaport upgraded its FY 2027 guidance after winning almost $1 billion of AI contracts. 

Megaport’s CEO, Michael Reid, commented:

Since April, we’ve announced approximately A$2.3 billion in total strategic contract value…Together with our existing business, these contracts support approximately A$1.1 billion in Group ARR once deployed. Earlier deployments, new contracts, and Network growth underpin our upgraded FY27 revenue and EBITDA margin guidance. Customers have committed approximately A$323 million in prepayments on today’s contracts, supporting the infrastructure investment behind future growth.

Reliance Worldwide Corporation Ltd (ASX: RWC)

The Reliance Worldwide share price outperformed with a 13% gain in September.

Investors were buying the plumbing parts company’s shares after it accepted a $4.1 billion takeover offer from Brookfield. It advised:

It is proposed that Brookfield will acquire all of the ordinary shares in RWC for cash consideration of US$3.38 for each RWC share. The Cash Consideration, which is now denominated in US dollars, implies a value of A$4.75 per share.

The post Which were the best-performing ASX 200 shares in September? appeared first on The Motley Fool Australia.

More reading

• How much further will house prices fall, according to AMP’s chief economist?
• Codan vs Xero: Which ASX tech stock is the better buy in October?
• How high does Macquarie think Megaport shares will go?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.