Smartkarma Daily Briefs

• There are 2 constituent changes for the LQ45 Index and 6 constituent changes for the IDX80 Index at the rebalance to be implemented at the close on 30 April.
• The largest passive inflows are expected in Amman Mineral Internasional (AMMN IJ), Indosat Tbk PT (ISAT IJ), Bank Rakyat Indonesia (BBRI IJ) and Merdeka Copper Gold Tbk PT (MDKA IJ). 
• With only 4 days to implementation, there could be relatively big moves on stocks that have large flow/impact from passive fund trading.

• OceanaGold Philippines (OGP PM) is looking to raise up to US$106m in its Philippines IPO.
• OceanaGold Philippines (OGPI) is a producer of gold and copper in the Philippines, and a subsidiary of OceanaGold Corporation, a Toronto Stock Exchange (TSX) listed gold mining and exploration company.
• In our previous note, we talked about the company’s historical performance and shared our quick thoughts on valuation. In this note, we share our updated thoughts on valuation.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Hongqiao

Indika Energy has launched a tender offer for its USD 8.25% 2025 notes, with USD 534 mn outstanding. For each USD 1,000 in principal, the tender consideration is USD 962.5 and early tender consideration is USD 50, leading to a total consideration of USD 1,012.5. Indika is concurrently launching a USD 144A/RegS offering. Holders of the 8.25% ’25s may request to receive priority allocation on the new notes.

We view initial price talk of 8.875% as attractive, given the company’s robust credit profile and improving debt maturity profile.

• Southwestern Energy’s third quarter 2023 earnings reflected a mixed but overall optimistic outlook for the company’s financial and operational performance.
• On the positive side, the company has demonstrated consistent progress in optimizing free cash flow generation and capital investment, a trend that the company expects to maintain.
• An improving macro environment, driven primarily by growing liquefied natural gas (LNG) demand, further enhances this outlook.

• Weatherford International reported an exceptional year in 2023 with a revenue growth of 19%, adjusted EBITDA margins expanding 423 basis points to 23.1% and adjusted free cash flow of $651 million.
• The growth was noted across all segments, particularly with DRE and WCC seeing high teens growth due to increased drilling and completions activity.
• The company has achieved significant growth in international markets and even managed to grow margins in North America despite a decline in revenue, indicating an effective change in the operating culture.

• Following the withdrawal of Mondi PLC (MNDI LN) from the contest to acquire DS Smith PLC (SMDS LN), the gross spread to the deal turned negative (from >10%).
• At the median 7.07x EV/Fwd NTM EBITDA (within the range of former transactions), the implied equity value of DS Smith would be 388.4p. (vs. an IBES consensus TP of 395p).
• IP is giving away most of the synergies. Spread is 1.91%/2.86% (gross, annualized assuming settlement by Y/E). I would wait for the spread to widen, before setting it up.

• National Oilwell Varco (NOV) reported a solid fourth quarter of 2023, with revenues up 7% sequentially to $2.3 billion.
• This growth was driven by strong offshore and international demands and a continued improvement in the supply chain.
• However, the company identified several challenges in its performance, including a 5% sequential decline in North American land revenues and an unexpected $20 million impact on EBITDA due to the devaluation of the Argentine peso.

• A drilling contract has been awarded for the Noble Venturer drill ship to recommence infill drilling at the Ceiba Field and Okume Complex in June.
• Owing to limitations arising from the shallower water depth at one of the planned infill well locations, the drilling campaign will now comprise of two infill wells.
• The third infill well will be deferred as part of a potential future drilling campaign.

• The Chemours Company’s fourth quarter and year-end 2023 earnings revealed a mixed bag of results, reflecting both the challenges and potential for the company.
• On one side, the company faced various hurdles including softness in economically sensitive end markets, higher input costs, and extended outage at one of the manufacturing sites.
• Despite these headwinds, Chemours still demonstrated strong areas of growth and several promising developments, emphasizing the resilience and potential the company has.