ASX:C79
Chrysos Corporation Ltd
Investment Summary
The fund managers believe that Chrysos Corporation (C79) possesses a significant competitive advantage through its PhotonAssay technology, enabling precise analyses crucial for resource companies. However, they note a decline in share price and operational challenges, particularly due to reduced deployment targets for PhotonAssay machines, which were cut from 18 to 9 units in FY24. This has led to analyst downgrades and a less optimistic FY25 outlook compared to market expectations, although the managers consider this guidance conservative. They pointed out that despite these setbacks, the increase in revenue per unit suggests enduring value. Recent customer acquisitions are seen as positive validation for the technology, reinforcing a long-term investment thesis. Ultimately, while some managers have exited holdings at a loss, others maintain their positions, optimistic about Chrysos achieving future profitability.
Commentary From The Managers
Endeavor Asset Management
31 Dec 2024
$4.94
- Endeavor Asset Management initiated an investment in Chrysos Corporation over 12 months ago.
- The investment was based on the strong competitive advantage of PhotonAssay technology, enabling efficient analysis of gold elements.
- At the time of investment, the gold price was around US$2,000 per ounce.
- In the first half of 2024, the gold price rose to over US$2,300 per ounce.
- Endeavor anticipated an increase in orders for PhotonAssay units due to the rising gold price.
- However, the pace of new unit sales did not meet expectations.
- Consequently, Endeavor Asset Management made the decision to exit the stock, incurring a loss.
Endeavor Asset Management
31 July 2024
$5.06
- Chrysos Corporation (C79) provided guidance for FY25 that was significantly below market expectations.
- The lower FY25 revenue guidance suggests fewer PhotoAssay units deployed than previously anticipated, triggering analyst downgrades.
- Endeavor Asset Management acknowledges disappointment with the outlook, yet believes the guidance may be conservative.
- There exists a reasonable chance for the company to surpass the given guidance.
- The signing of two new customers after the quarter-end indicates positive validation for Chrysos' technology.
- Endeavor Asset Management continues to hold Chrysos Corporation.
Endeavor Asset Management
30 Apr 2024
$5.67
- Chrysos Corporation (C79) has experienced a significant share price decline of 17.3% following a disappointing March quarter update.
- The deployment target for PhotonAssay machines has been reduced from 18 units in FY24 to 9 units.
- A positive aspect of the update is the increase in MMAP per average unit to $1.7m from $1.5m in the December quarter.
- Endeavor Asset Management believes the long-term investment thesis remains intact.
- There is an expectation that the business will return to a sustainable level of unit deployment.
- Endeavor Asset Management anticipates that Chrysos will diversify its customer base to reduce the frequency and severity of deployment issues.
- An overall market valuation recovery is projected as a result of improving deployment consistency.
Endeavor Asset Management
31 Jan 2024
$6.72
- Chrysos Corporation Ltd (C79) experienced a decline following its quarterly report for December.
- The flagship product, PhotonAssay, offers enhanced analysis for resource companies.
- Quarterly activities report indicated a 13% QoQ revenue growth.
- Concerns arose over delays in mobilising units to new sites, particularly in Africa.
- Despite challenges, C79 has reaffirmed guidance for FY24.
- Current revenue tracking is at the lower end of $48-$58 million range.
- C79's PhotonAssay provides a competitive advantage in the industry.
- Recent contracts, including one with Barrick Gold, suggest potential for further revenue growth.
- Consensus estimates are for Chrysos to achieve its maiden net profit in FY25e.
- Forecast average revenue growth of 54% per annum over the next five years.
- During the month, Endeavor Asset Management took profits around ~$7.60/share, about 15% above cost price.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.