GR Engineering Services Ltd (GNG) AI Stock Analysis

• Market Cap: AU$602.47M
• Dividend Yield: 5.48%
• Average Volume (3M): 182.71K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.76
• Revenue Growth: 25.12%
• EPS Growth: 31.13%
• Country: AU
• Employees: 415
• Sector: Industrials
• Sector Strength: 94
• Industry: Engineering & Construction
• EPS (TTM): 0.13
• Shares Outstanding: 167,353,470
• 10 Day Avg. Volume: 213,999
• 30 Day Avg. Volume: 182,710
• PEG Ratio: 0.71
• Price to Book (P/B): 7.92
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$3.50
• Price Target Upside: -4.11% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 84 Outperform
• Price Target: AU$4.00 ▲(9.59%Upside)

GR Engineering Services Ltd presents a compelling investment opportunity with strong financial performance and positive technical indicators. The primary strengths lie in its solid financial health and bullish technical momentum. The valuation is reasonable, supported by a high dividend yield, although investors should monitor revenue growth challenges.

GR Engineering Services Ltd Business Overview & Revenue Model

Company Description

GR Engineering Services Limited provides engineering, procurement, and construction services to the mining and mineral processing industries in Australia and internationally. The company operates through two segments, Mineral Processing, and Oil & Gas. It offers feasibility studies, such as scoping, pre-feasibility, and definitive level studies, as well as study work and services that include front end engineering design, operations and process optimization, due diligence reviews, asset management system development and monitoring, risk evaluation and hazard/operability studies, technology evaluation and trade-off studies, and refurbishment assessments. The company also provides design and construction of minerals processing facilities and related infrastructure for green fields or brownfield projects, including plant modifications, and upgrades, and expansions; plant evaluation and condition reports; plant operations, and maintenance support and optimization; and plant relocation, refurbishment, and recommissioning, as well as offers owners representatives and teams for project management and delivery. In addition, it provides project management services comprising project studies, engineering and procurement, construction and commissioning, asset management plans and system development, operations and technical support, and infrastructure development services. Further, the company offers engineering and process design consulting services; asset management services; and operations, maintenance, and advisory services to the oil and gas sector. GR Engineering Services Limited was founded in 1986 and is based in Ascot, Australia.

How the Company Makes Money

GR Engineering Services Ltd generates revenue through its engineering, procurement, and construction management (EPCM) contracts with clients primarily in the mining and mineral processing sectors. The company's revenue model is based on providing tailored engineering solutions and project management services that help clients improve their operational efficiencies and reduce costs. This includes executing feasibility studies, designing and constructing mineral processing facilities, and providing ongoing support and maintenance services. Key revenue streams include contract fees for project management and engineering services, as well as commissions from successfully completed projects. Additionally, strategic partnerships with technology providers and equipment manufacturers enhance the company's service offerings and contribute to its earnings by enabling GNG to deliver integrated solutions to its clients.

GR Engineering Services Ltd Financial Statement Overview

Summary

GR Engineering Services Ltd exhibits strong financial health with substantial profitability, evidenced by robust EBIT and EBITDA margins. The balance sheet is stable with low debt and a high return on equity, showcasing efficient capital management. Despite challenges in revenue growth, effective cash flow management supports overall financial strength.

Income Statement

The income statement reflects strong profitability with a notable gross profit margin of 54.8% and a net profit margin of 7.4% for the latest year. The company has experienced fluctuations in revenue, with a decline from 2022 to 2023 and a further decrease in 2024, indicating potential challenges in maintaining consistent growth. However, EBIT and EBITDA margins are robust at 11.8%, indicating efficient management of operating expenses.

Balance Sheet

The balance sheet is solid, with a low debt-to-equity ratio of 0.14, reflecting conservative financial leverage and low risk associated with debt. Return on equity stands at 47.0%, showcasing strong profitability relative to shareholder investments. Additionally, the company maintains an equity ratio of 29.3%, indicating a stable capital structure.

Cash Flow

The cash flow statement indicates robust cash generation, with a free cash flow to net income ratio of 0.80 and an impressive operating cash flow to net income ratio of 0.96. Free cash flow has grown significantly year-over-year, demonstrating effective cash management. However, fluctuations in operating and investing cash flows suggest some variability in cash generation activities.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	424.06M	551.36M	651.67M	392.39M	222.40M
Gross Profit	232.54M	52.61M	65.77M	40.42M	13.62M
EBITDA	50.02M	46.20M	55.93M	34.09M	-11.02M
Net Income	31.18M	27.49M	34.72M	23.24M	-7.25M
Balance Sheet
Total Assets	226.75M	193.96M	235.44M	160.29M	98.92M
Cash, Cash Equivalents and Short-Term Investments	74.65M	86.02M	101.99M	68.97M	37.53M
Total Debt	9.15M	7.23M	4.26M	8.26M	7.46M
Total Liabilities	160.43M	134.23M	173.28M	108.65M	64.24M
Stockholders Equity	66.33M	59.73M	62.16M	51.64M	34.68M
Cash Flow
Free Cash Flow	24.97M	9.86M	65.81M	47.51M	10.21M
Operating Cash Flow	29.79M	13.27M	69.42M	49.19M	11.24M
Investing Cash Flow	-8.27M	4.25M	-3.99M	-1.47M	-333.23K
Financing Cash Flow	-33.51M	-32.94M	-33.13M	-16.35M	-4.95M

GR Engineering Services Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:GNG, the sentiment is Positive. The current price of 3.65 is above the 20-day moving average (MA) of 3.40, above the 50-day MA of 3.13, and above the 200-day MA of 2.67, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 70.66 is Negative, neither overbought nor oversold. The STOCH value of 76.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:GNG.

GR Engineering Services Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GNG	84 Outperform	AU$602.47M	15.48	58.99%	5.48%	25.12%	31.13%
Sector *	58 Neutral	HK$14.94B	4.62	-2.78%	5.07%	3.80%	-54.55%
LYOPF	―	$301.70M	9.30	36.14%	0.41%	―	―
4SO	―	€268.57M	15.20	15.15%	4.31%	―	―
CVL	81 Outperform	AU$569.55M	9.64	12.62%	5.82%	15.44%	-4.13%
DUR	74 Outperform	AU$382.37M	17.02	37.07%	2.81%	-1.02%	-7.39%
GNP	67 Neutral	AU$776.60M	32.07	19.31%	0.58%	35.02%	48.51%

GR Engineering Services Ltd Corporate Events

GR Engineering Services Launches Dividend Reinvestment Plan

GR Engineering Services Limited has announced the implementation of a Dividend Reinvestment Plan (DRP) for its shareholders, starting with the FY25 Final Dividend. This plan allows shareholders to reinvest their dividends into additional shares without incurring transaction costs, potentially enhancing shareholder value and engagement. The DRP is optional and available to shareholders in Australia and New Zealand, with GR Engineering encouraging eligible participants to make their election online.

GR Engineering Services Ltd Announces Cessation of Performance Rights

GR Engineering Services Ltd announced the cessation of 20,000 performance rights due to the lapse of conditional rights, as the conditions were not met or became incapable of being satisfied. This development may affect the company’s capital structure and could have implications for stakeholders, reflecting on the company’s performance metrics and future incentive plans.

AIC Mines Awards Contract for Eloise Plant Expansion

AIC Mines has awarded an engineering, procurement, and construction contract to GR Engineering Services for the expansion of the Eloise processing facility to a 1.1Mtpa throughput capacity at a fixed cost of $77.6 million. The expansion is designed to minimize disruption to current operations and is scheduled to begin construction in October 2025, with commissioning expected by December 2026. This expansion aligns with the ramp-up in production at the Jericho deposit and is forecasted to increase annual copper production to over 20,000tpa by FY28.

GR Engineering Secures $79 Million Contract for King of the Hills Upgrade

GR Engineering Services Limited has secured a $79 million contract variation for the Stage 2 Upgrade of the King of the Hills Operations in Western Australia, in partnership with Greenstone Resources, a subsidiary of Vault Minerals Limited. This upgrade will enhance the processing plant’s capacity to 7.5 million tonnes per annum, reflecting confidence in GR Engineering’s capabilities and reinforcing its position in the mining services industry.