If my understanding of Euroz is correct they deal in securities and have clients. I assume the reason they initiate coverage for a specific company is to inform their clients that they believe there is an opportunity for financial growth with that company. The idea is that their clients, on the advice of the company and the analyst will buy into the company in anticipation of the gains. The return to the company and the analyst would normally be in the form of commission for share orders placed along with goodwill of clients who make money. I believe thay can also be paid directly to make the report, but they would need to genuinely support the report as they are effectively advising their clients to buy.
I believe the process is that the analyst meets with the company and the directors, probably on their request, and they discuss all aspects of the business. It is then up to the analyst to investigate the staff and the company to see if he believes what they are telling him. If all is good and they believe the story and there are gains to be made in the analyst's view then he will recommend to his clients a speculative buy.
I think the take away is that the analyst will not just say it is a speculative buy because he has been paid off, as he would then be doing his clients a major disservice. He may be paid to visit the company and discuss the questions but ultimately he is providing a report to his clients. If he agrees to let PYC share the report to general public then that may be another cause for payment I guess.
The material contained in this communication (and all attachments) is prepared
for the exclusive use of clients of Euroz Securities Ltd (ACN 089 314 983)
(“Euroz”) only. Euroz is the holder of an Australian Financial Services Licence
(AFSL 243302) issued by the Australian Securities and Investments Commission
(“ASIC”) and is a participant of the Australian Securities Exchange Group
(“ASX Group”).
Disclosure from the report-
Euroz and its associates declare that they deal in securities as part of their
securities business and consequently may have a relevant interest in the
securities recommended herein (if any). This may include providing equity
capital market services to their issuing company, hold a position in the securities,
acting as principal or agent, or make a market therein and as such may effect
transactions not consistent with the recommendation (if any) in this report.
Euroz declares that it may have acted as an underwriter, arranger, co-arranger or
advisor in equity capital raisings, and will have received a fee for its services, for
any company mentioned within this report during the last 12 months.
(20min delay)