Australia

• RaaS has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the company’s recent announcements that it has ordered its third EIGA and that it has secured Aerospace Quality Management System AS9100D accreditation for the Tennessee facility for the manufacturing and testing of metal powder and PM-HIP production, both important milestones on the path to commercialisation.
• We have already incorporated the company’s capex guidance in our forecasts so do not anticipate any change to our estimates from these announcements.
• Our base-case DCF valuation is $1.16/share, fully diluted, which represents potential capital upside of 346%.

• RaaS has published an update on vertically-integrated aviation designer and manufacturer Structural Monitoring Systems (ASX:SMN) following the company’s update on its guidance which suggests that 80% or $24m of the $30m low-end FY25 revenue guidance is now contracted.
• SMN has provided an update to FY25 guidance announced on November 1, where revenue was guided to $30m-$34m, +14% at the midpoint on FY24, and for EBITDA of between $7.6m and $9.1m, +300% at the midpoint on FY24.
• The update suggests 80% or $24m of the $30m low-end revenue guidance is now contracted following a successful year-end sales campaign for the new Forest Radio product.

• After Tanarra Capital categorically refuted an Australian article alleging Tanarra was supportive of Bain’s Offer, Insignia Financial (IFL AU)‘s board’s response was all-but rubber stamped. 
• Insignia reckons Bain’s Offer does not represent fair value, and in the “context of a change of control transaction“. 
• What now – does Bain bump? Tough call in a space where one, possible two deals, may lapse in short succession. 

• The S&P/ASX 200 (AS51 INDEX) has declined two weeks in a row. Quantitative analysis suggests that a trend reversal could occur soon.
• This Insight provides an option strategy based on the resistance and support levels identified in the quantitative Insight EQD | ASX 200 Presents a High-Probability Buy-The-Dip Opportunity 
• Option liquidity and volatility analysis, including skew, term structure and put/call ratios are provided and used in strategy design.

• Rio doubles down on lithium investment in Rincon, with a US $2.5 billion expansion plan
• BHP and Rio have historically had differing views on commodities, with examples in Potash, aluminium, and mineral sands
• Rincon project aims to expand production to 60,000 tonnes per annum, with heavy reliance on DLE technology for extraction and processing

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Recce received approval from the Indonesian Drug and Food Regulatory Authority, Badan POM (BPOM), to start its registrational Phase III study in Indonesia of RECCE® 327 topical gel (R327G) in diabetic foot infections (DFIs). This was the final hurdle that needed to be overcome before study enrolment can proceed, which is expected to start before the end of 2024. Top-line data from the 300-patient double-blinded Phase III study (with 200 patients in the R327 arm and 100 on placebo) are anticipated in late 2025. If positive, we expect Recce would be able to launch R327G in South-East Asia in H2 CY26, potentially marking the company’s transition to a commercial stage.

• The S&P/ASX 200 INDEX it’s currently trending up quite well, since October 2023. The current rally picked up some steam from July 2024 and is quite steady. 
• The index started to pull back 2 weeks ago and has closed 2 consecutive weeks down and this week started with a Monday down Close.
• Our models show a clear opportunity to buy this dip and ride the index uptrend back to >3% profit target, roughly a 3-weeks movement according to our forecast.

Canyon Resources, an ASX-listed exploration and development company, is advancing the high-grade, large-scale Minim Martap bauxite project in Cameroon. Minim Martap, a feasibility-stage project, is set to become an important independent source of low-cost bauxite for the fast-growing seaborne market. While we are planning to initiate full coverage of Canyon Resources soon, in this note we focus on the key elements of the company’s investment case – attractive project economics, favourable bauxite market fundamentals and supportive cornerstone shareholder.

• Price Movements: SGX Iron Ore Futures rose $1.95/ton last week, peaking at $107.30/ton but faced increased resistance and waning momentum in the later part of the week. 
• Economic Influence: Expanded Chinese stimulus initially boosted prices, but weak CPI and loan data revealed sustained economic headwinds, dampening a lasting rally.
• Technical Indicators: A flat-top pattern, narrowing MACD, and declining RSI point to bearish potential.

• De Grey Mining (DEG AU), Perseus Mining (PRU AU) and Sandfire Resources Limited (SFR AU) will be added to the Vaneck Vectors Australian Resources ETF (MVR AU) in December.
• Constituent changes, float changes and capping changes result in an estimated one-way turnover of 7.4% and in a round-trip trade of A$63m.
• De Grey Mining will be acquired by Northern Star Resources in the first half of 2025. The passive buying could push De Grey Mining higher in the short-term.

• Telix Pharmaceuticals (TLX AU) is the sole (and somewhat surprising) inclusion for the VanEck Vectors Australian Equal Weight ETF (MVW AU) in December.
• The one inclusion, float changes and capping changes result in a one-way turnover of 5.5% leading to a round-trip trade of A$290m.
• Shorts have increased in Telix Pharmaceuticals (TLX AU) this year but there has been some covering in the stock recently.

• No constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in December. But there are a lot of float and capping changes.
• Estimated one-way turnover is 2.6% resulting in a round-trip trade of US$269m. There are 8 stocks with over 1x ADV to trade from passive trackers.
• Stocks with the largest flows are Evolution Mining, Pan American Silver, Westgold Resources, B2Gold, Alamos Gold, Harmony Gold Mining, Eldorado Gold, K92 Mining, IAMGOLD, Endeavour Silver and Emerald Resources.

• The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 20 December. There are no constituent changes, but there are float and capping changes.
• Estimated one-way turnover at the rebalance is 2.9% resulting in a one-way trade of A$17m. There is limited impact on the index constituents.
• The largest inflows are in Charter Hall, Gpt Group, Dexus Property and Region RE while the largest outflows will be from Goodman Group, Scentre Group and Vicinity Centres.

• The MV J-Gold Miners index represents the performance of small-cap and mid-cap gold and silver mining companies listed around the world.
• There will be no index changes for the December 2024 rebal event.
• We expect a one-way flow of US$168mm for December 2024, which translates to a turnover of 3.4%.

• The MV Australia Equal Weight Index represents the performance of large, liquid companies incorporated in Australia and listed on the ASX.
• Telix Pharmaceuticals (TLX AU) is an ADD for the December 2024 review, with no other changes to the index.
• We expect a one-way flow of $US90mm for December 2024, which translates to a turnover of 5.5%.

• Vulcan Energy Resources (VUL AU) will be added to the VanEck Rare Earth/Strategic Me (REMX US) while Tianqi Lithium (9696 HK) will be deleted from the index.
• Constituent changes, float changes and capping changes result in an estimated one-way turnover of 2.5% and in a round-trip trade of US$37m.
• The largest inflows will be in Vulcan Energy Resources (VUL AU), Lynas Corp Ltd (LYC AU), Ganfeng Lithium (1772 HK) and Tronox Holdings (TROX US). 

• Reportedly, Blackstone is running a ruler over Dexus Property (DXS AU), one of Australia’s leading fully integrated real estate groups. 
• The Australian article flips flops: “Blackstone is understood to have been back on the scene“; but “cooled on the opportunity for now“. 
• Almost exactly four year ago, Blackstone paid A$2.1bn for a 49% stake in the Dexus Australian Logistics Trust, a prime logistics portfolio managed and jointly owned by Dexus.

• IOOF Holdings (IFL AU) shares rose 11% in the final minutes of trade, fueled by media reports suggesting that Bain was in the advanced stages of making a buyout offer.
• The presence of several substantial shareholders necessitates an attractive takeover premium. Takeover interest is unsurprising as Insignia trades at a material discount to peers.
• We use several methods to triangulate the likely offer, which suggests a price range of A$3.44-5.50 per share, with an average of A$4.67, a 37.4% premium to the last close.

• IOOF Holdings (IFL AU) has received an indicative proposal from Bain Capital to acquire all of its shares at A$4/share in cash.
• The offer takes advantage of IOOF Holdings (IFL AU)‘s underperformance over the last couple of years and there could be competing offers from other investment managers. 
• Short interest in IOOF Holdings (IFL AU) is around 2% of shares out and 2.5% of float. There could be short covering in the next few days.

• Insignia Financial (IFL AU), a wealth manager and previously known as IOOF, has announced a A$4.00/share non-binding and indicative proposal from PE outfit Bain Capital.
• The Offer, should it proceed, will be by way of a Scheme.  Apart from IFL’s shareholder approval, a firm bid requires FIRB signing off. 
• IFL’s board is weighing up the Offer’s pros and cons. This probably requires a small bump.

• Each of NVX’s 3 operating units is expected to play an important role in its development & growth, as NVX leverages proprietary R&D & patented technology to develop critical materials for the battery sector.
• The Anode unit is moving towards commercial production at the Riverside facility.
• NVX’s goal as it advances its cathode unit – the cathode active material (CAM) market is expected to reach >$100B globally by 2030 – is to maximize sustainability & cost efficiency around its processes.

• DigiCo REIT (DIGICO AU) raised around US$1.3bn in its Australian IPO.
• DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.

• RaaS is initiating coverage of media group GTN (ASX:GTN) with a base peer EV/EBITDA-derived valuation of $0.81/share, representing potential capital upside of 40% from the current share price, although we suggest premiums of 10% and 20% to the peer average are justified based on GTN’s superior metrics.
• • GTN has seen improved adjusted EBITDA across FY23 (+13.5%) and FY24 (+15%) but the utilisation rate of advertising spots is still below pre-pandemic levels.
• We believe further improvements in utilisation together with some stock-specific cost reductions will drive EBITDA 31% higher in FY25, placing the group on very attractive multiples relative to peers.

• SGX IO Futures January 2025 contract fell $1.85/ton, closing at $102.55/ton on 6/Dec, with prices trading in a $3.45/ton range.
• Prices traded above the weekly pivot point of $103.20/ton until 6/Dec but failed to breach the R1 resistance at $106.05/ton, reflecting constrained upward momentum.
• Volume Put/Call ratio rose to 1.47; March 2025 expiry saw the highest put volume. Implied volatility increased modestly for December expiry but declined for January and February.

• The funding package between Iluka Resources and the government was finalized, leading to a 10% market decline
• Iluka Resources planned to build a Rare Earths refinery in Enneba with the assistance of a $1.05 billion non recourse loan from the Australian government
• Iluka also had plans to process their Wimmera deposit through the refinery, despite challenges with separation and impurities causing delays in development.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• We summarize the sensitivity of high-yield stocks Vale (VALE US) and Fortescue Metals (FMG AU) to the iron ore price. We try to answer what’s priced in at 100 USD/ton.
• We provide sensitivity tables for both stocks based on a range of 90-130 USD/ton. At 100 USD/ton, Vale (VALE US)/Fortescue Metals (FMG AU)  trade at 7.4/6.4% dividend yields.
• Bullish iron ore participants subscribing to the 130 USD/ton forecast can see yields of 16.3%/11.4%. This forecast will be achievable if the China stimulus provides the expected impetus.