Harmony Gold Mining Company Ltd.

Harmony Gold Mining Company Limited (NYSE: HMY) engages in gold mining and associated operations, such as exploration, extraction, and processing, through its subsidiaries. South Africa Underground, Surface and International are the company's segments.

Key Highlights

• Net debt has decreased significantly over the last nine months, falling by R350 million (USD24 million) to R603 million (USD41 million) at the end of March 2022, compared to R953 million (USD65 million) at the end of March 2021.
• Adjusted EBITDA fell 19% to R7,613 million (USD521 million) at the end of March 2022, compared to R9,439 million (USD639 million) at the end of March 2021.
• An interim dividend of 40 SA cents (USD 0.027) per share was declared on February 25, 2022, and paid on April 18, 2022, in accordance with the company's strategy of distributing 20% of net free cash generated to shareholders.
• The South African operations increased output by 2% to 32 051kg (1,030,459oz) for the nine months ended March 31, 2022, compared to 31 470kg (1,011,778oz) for the nine months ended March 31, 2021. The extra three months of output from Mponeng and allied assets in this nine-month period, compared to only six months in a similar era, accounted for a large portion of the rise.
• Because of Hidden Valley, group cash operating unit cost climbed by 14 percent quarter-on-quarter to R767,292/kg from R672,745/kg (an increase of 16 percent to USD1,569/oz from USD1,356/oz).
• With one-quarter of production remaining in FY22, the company is optimistic that it will meet its previously revised annual guidance of 1,480,000 to 1,560,000oz in total production, overall AISC guidance of R805,000/kg to R835,000/kg, and underground grade guidance of 5.40 to 5.57g/t (announced in February 2022).

Stock recommendation

HMY's stock price has corrected by 30.78% in the past three months and is currently in the lower of its 52-week range of USD 3.00 to USD 5.50.  As can be seen in the chart below, the price is currently below the short-term (50-day) SMA and long-term (200-day) SMA, with RSI at 47.94.

Given the stock's considerable correction in the past three months, financial results, and technical analysis, we propose a "Watch" rating on the stock at its closing price of USD 3.44 as of June 21, 2022.

One Year Technical Chart, as of June 21, 2022. Data Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary

* Closing price as of June 21, 2022.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.