Australia

• Anticipation of an extensive stimulus package at China’s Third Plenum, aimed at revitalizing the decelerating economy, is driving a rebound in iron ore prices.
• China’s iron ore imports have increased by 7% year-over-year despite a 3% decline in steel output, leading to a buildup in inventories on-shore. 
• The convergence of technical signals and seasonal trends in the SGX TSI Iron Ore Index suggests a bullish market stance, highlighting potential profit opportunities.

• Iron ore has remained rangebound between 95 and 130 USD/ton for three years, with cost-curve support kicking in on the higher end of the cost curve at around 100 USD/ton. 
• Coking coal prices are expected to bounce due to the Anglo incident, and we believe the 65-62 spread will benefit, moving out of its mid-teens band. 
• We like iron condors (set up details in the insight) and high-grade ore producers Rio Tinto Ltd (RIO AU), Vale (VALE US).

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.

• Nickel Industries
• Samvardhana Motherson International Ltd

• Mineral Resources is a founder-led diversified infrastructure and mining business that has seen significant growth since its IPO.
• The business is divided into two segments, with the infrastructure business, “Infraco,” playing a crucial role in the company’s success.
• The company’s CEO believes they are just getting started and can grow to many multiples of their current size.

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

• RaaS Reseach Group has published an update report on IP services group QANTM Intellectual Property (ASX:QIP) following the release of the Scheme of Arrangement documentation with Adamantem Capital on 25 June.The documentation includes the Independent Expert’s report from Grant Thornton Corporate Finance which concludes that the Scheme is “fair and reasonable” and in the “best interests of QANTM shareholders in the absence of a superior alternative proposal emerging”.
• The independent expert concludes that the fair market value range for QANTM shares on a control basis is from $1.736/share to $2.098/share, suggesting a respective premium of 4.7% and discount of 13.4% to the cash offer of $1.817/share.
• Our existing DCF-based valuation has remained unchanged at $1.79/share.

• RaaS Research Group has published an update on cloud-based digital twin solution provider Pointerra (ASX:3DP) following the announcement it has been awarded a US$1.63m contract for a US Department of Energy programme to model a range of electric grid resilience investment scenarios by electric utilities.
• We see the contract as validation of Pointerra’s digital twin solution for managing large-scale physical inventory with the potential to provide the company with invaluable exposure to new and existing US clients in the US electric utility sector.
• We have not made any changes to our forecasts as a result of this announcement, although note that we have already factored in substantial revenue growth in FY25f.

• Discounts to NAV of covered holdcos didn’t follow a clear trend during June. Discounts to NAV: C.F.Alba, 44.5% (vs. 46.8%); GBL, 43.6% (vs. 42.9%); Heineken Holding, 18.4% (vs. 18.3%); 
• Industrivärden C, 2.4% (vs. 2.5%); Investor B, 9.9% (vs. 12%); Porsche Automobile Holding, 35.8% (vs. 35.3%). Rio DLC spread tightened to 20.7% (vs. 23%).
• What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

• RaaS Research Group conducted a webinar with Pureprofile’s Managing Director Martin Filz and CFO/COO Melinda Sheppard on 28 June following the $1.25m acquisition of i-Link Research Solutions.
• This is a transcript of the webinar.

• RaaS Research Group has published an update report on data analytics company Pureprofile (ASX:PPL) following the $1.25m acquisition of i-Link Research Solutions, on an estimated FY24 revenue multiple of 0.46x.
• Pureprofile notes that i-Link generated revenue of ~$2.7m in FY24, that it was cash-flow positive, and that there would be cost synergies from the i-Link principals not continuing with the business and existing staff moving to Pureprofile’s offices.
• We have incorporated the acquisition in our forecasts, resulting in a 5% upgrade to our FY25f revenue and underlying EBITDA forecast and a 6% increase to our FY25f underlying EPS estimate.

• In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the September 2024 index rebal event.
• In July 2024, a couple of important Australian M&A deals could close and one of them could trigger intra-review additions for ASX 100 and ASX 200.
• Separately, we see one ASX 100 change and one ASX 200 change during the September 2024 rebalance. For ASX 300, there could be 13 ADDs and 6 DELs.

Actinogen Medical announced that the prespecified biomarker subset analyses on stored plasma samples (n=72) from its previous Phase IIa XanADu study (n=185) in patients with mild Alzheimer’s disease (AD) has been published in the peer-reviewed Journal of Alzheimer’s Disease (JAD). As reported in Q422, patients with elevated baseline phosphorylated Tau-181 (pTau-181) protein (at least 6.74pg/mL), representing 34 patients (16 on Xanamem 10mg daily, 18 on placebo), showed a 0.6 mean difference (effect size) on the CDR-SB scale at 12 weeks between the placebo and treatment arms, representing a 60% relative reduction in progression. This suggests that Xanamem’s potential cognitive or disease-slowing effects may be sensitively detected by the CDR-SB endpoint, which is one of the critical endpoints in the ongoing XanaMIA Phase IIb trial (planned n=220) enrolling participants with cognitive impairment (CI) in mild to moderate AD as confirmed through elevated baseline p-Tau181. Actinogen’s next milestone will be results, expected in early Q3 CY24, from its Phase IIa XanaCIDD study of Xanamem in patients with CI and major depressive disorder.

• ASX is seeing the number of listed companies in decline, although there are some positives with average daily turnover and secondary listings.
• Higher costs are keeping positives from reaching the bottom line fully, with costs to revenue are now 40% in 1H24 where this was 29% in recent interim periods.
• Capex plans for ASX and sticky inflationary figures on staff costs, the current year and following year net profit can see reasonable pressure.

• The original trade was discussed at end-April in Tax-Loss Selling in Australia 2024 – Historical Analysis and A Trade Basket then updated here and here. 
• That has done OK. The LIQUID basket has delta neutral performance of +8.4% over 2mos; LIQUID+LESSLIQUID +7.2%; If one did a mixed basket (3x L+LL + 1x Illiquids) it’s +8.6%.
• Now it is time to reverse the trade, buying the basket you were short, and running it against index for the next 6-8 weeks.

• Redox (RDX AU), a chemical and ingredients distributor, raised US$270m in its IPO in Jun 2023. Some of its founding family shareholders will be released from their IPO lockup soon.
• Redox primarily serves the ANZ market, and it has a presence in Malaysia and the US. It is one of the largest chemicals and ingredients distributors in Australia.
• In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.

• RaaS Research Group has published a report on Ballymore Resources ahead of the company presenting at the Sydney Mining Club on July 4.
• BMR is an exploration company with a portfolio of projects across northern Queensland which range from early-stage target generation and discovery through to resource delineation.
• BMR’s most advanced asset is the Dittmer project located ~20km west of Proserpine in which the company has identified probable extensions to the previously mined orebody at depth and down plunge.

• RaaS Research Group has published a report on Santana Minerals (ASX:SMI) ahead of the company presenting at the Sydney Mining Club on July 4.
• SMI is developing the Bendigo-Ophir gold project in the Otago region of New Zealand.
• The project has a combined mineral resource estimate of 37Mt at 2.1gpt for 2.5Moz of gold using a cut-off grade of 0.5gpt.

• The MMG (1208 HK) rights, designed to raise US$1.15bn to pay off loans to the parent for the purchase of a large copper asset, start trading 24 June 2024. 
• There is some risk up for grabs, and it is likely to trade according to standard Hong Kong Rights Trading Dynamics. Shorts are down somewhat, but covering should be expected. 
• There is path-dependency to the Rights Trading, and while they trade for 7 trading days through Tuesday next, one should expect the volume to trade this week.