Category

Australia

Oct 14
0

Daily Brief Australia: Canacol Energy, Ansell Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Auctus on Friday – 13/10/2023
  • Ansell Ltd (ANN AU): Worst Not Over Yet; Unfavorable Macro Backdrop Persists; Bleak FY24 Guidance

Auctus on Friday – 13/10/2023

By Auctus Advisors

  • Pulsar Helium (PLSR CN)C; target price of C$0.90 per share: Additional acreage should increase the size of the prize – Pulsar has signed a lease with a private mineral rights holder to expand the area of the company’s Topaz helium project.
  • The additional mineral rights are within a 6.2 mile radius of the Topaz discovery and cover a total of 2,840 gross acres (1,049 net acres).
  • OMV (OMV AG): 3Q23 update – 3Q23 production was 364 mboe/d.

Ansell Ltd (ANN AU): Worst Not Over Yet; Unfavorable Macro Backdrop Persists; Bleak FY24 Guidance

By Tina Banerjee

  • Ansell Ltd (ANN AU) reported 11% YoY decline in revenue to $1,655M in FY23. Healthcare business experienced significant customer destocking through FY23, leading to 21% YoY decline in segment revenue.
  • Ansell has outlined an investment program to improve productivity and accelerate digitalization for total cost of $70–85 million. The program calls for production as well as job cut.
  • Strong headwinds in the glove sector are expected to continue as the global oversupply situation persists. Ansell expects FY24 adjusted EPS to be $0.92–1.12 (down 3–20% YoY).

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Oct 13
0

Daily Brief Australia: Estia Health, Ingenia Communities and more

By | Australia, Daily Briefs

In today’s briefing:

  • Estia & Bain: 15th Nov Shareholder Vote
  • Ingenia Communities Placement – Largest Shareholder Selling Isn’t Particularly Well Flagged

Estia & Bain: 15th Nov Shareholder Vote

By David Blennerhassett

  • On the 7 August, aged care provider Estia Health (EHE AU) and Bain Capital entered into a Scheme Implementation Agreement at A$3.20/share (less any dividends), a 50% premium to undisturbed
  • The Scheme Booklet is now out. A shareholder meeting will be held on the 15th of November with implementation expected on the 30th of November. 
  • Estia paid a fully franked dividend of A$0.12/share on the 15th of September. Currently trading  tight to the adjusted terms of A$3.08/share. This still needs FIRB approval.

Ingenia Communities Placement – Largest Shareholder Selling Isn’t Particularly Well Flagged

By Clarence Chu

  • Sun Communities (SUI US) is looking to raise A$165m (US$106m) via selling its entire stake in Ingenia Communities (INA AU).
  • With the investor selling down its entire stake, the deal will be a large one for the firm to digest, with shares representing 32.9 days of three month ADV.
  • While short covering could potentially provide some support for share price post-deal, the selldown here doesn’t seem particularly well flagged.

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Oct 12
0

Daily Brief Australia: Estia Health, Bank Of Queensland and more

By | Australia, Daily Briefs

In today’s briefing:

  • Estia Health (EHE AU): Scheme Meeting on 15 November
  • BOQ – Illustrative of Australia Bank Risks Even for Nearly Pure Mortgage Lender and Mkt Expectations

Estia Health (EHE AU): Scheme Meeting on 15 November

By Arun George

  • The Estia Health (EHE AU) IE considers Bain’s A$3.20 (A$3.08 excluding paid dividends) offer fair and reasonable as it is above its valuation range of $2.83 to A$3.21 per share. 
  • The offer is subject to FIRB and possibly aged care industry approvals. The MAC clause risk, particularly around material regulatory events, is diminishing.
  • This is a done deal. At the last close price and for the 30 November payment, the gross and annualised spread is 1.3% and 9.7%, respectively.

BOQ – Illustrative of Australia Bank Risks Even for Nearly Pure Mortgage Lender and Mkt Expectations

By Daniel Tabbush

  • The results for Bank Of Queensland (BOQ AU) are illustrative of risks for the mainstream banks in Australia and market expectations
  • Even with almost all residential mortgage loans, BOQ’s credit costs rose from AUD13m to AUD71m YoY and Pillar 3 data shows mortgage NPLs up nearly 10% in past 2 months
  • Net interest income only +6% YoY and -8% HoH, with operating costs +8% YoY and fee income down, there is nothing core holding the P&L together

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Oct 11
0

Daily Brief Australia: Origin Energy and more

By | Australia, Daily Briefs

In today’s briefing:

  • Origin/Brookfield: ACCC Rubber Stamped. Now Shareholders Will Have Their Say
  • Origin Energy (ORG AU): ACCC Approves, Shareholders Justifiably Want a Bump

Origin/Brookfield: ACCC Rubber Stamped. Now Shareholders Will Have Their Say

By David Blennerhassett

  • Brookfield Asset Management/MidOcean Energy’s tilt for Origin Energy (ORG AU), faced two major hurdles. 
  • The first was ACCC approval. Not just over competition issues, but also the perceived/apparent public benefit from Brookfield’s future commitment to renewable generation. ACCC has now cleared the transaction. 
  • The second is currying favour with shareholders, several of whom, including AustralianSuper (13.68% stake), reckon the Offer is substantially below long-term value. This needs a bump.

Origin Energy (ORG AU): ACCC Approves, Shareholders Justifiably Want a Bump

By Arun George

  • The ACCC has approved Brookfield/EIG’s proposed acquisition of Origin Energy (ORG AU). The Brookfield/EIG offer is A$5.78 and US$2.19 per share, worth A$8.83 at the last close. 
  • The bidders now face the challenge of convincing shareholders to accept the offer and avoid incurring ticking fees. The scheme booklet will be despatched in the coming weeks.
  • Several shareholders have justifiably argued that the offer is light. Our SoTP valuation is A$9.46 per share, 7.1% above the implied offer price of A$8.83.

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Oct 10
0

Daily Brief Australia: South32 Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Have South32 Shares Bottomed Out?

Have South32 Shares Bottomed Out?

By Pranay Yadav

  • South32 is an Australian metal and mining firm spun off from BHP in 2015. Unlike mining majors, South32 holds smaller but concentrated assets.
  • Aluminium operations is the firm’s primary revenue source followed by coking coal operations. Coking coal contributes to 32% of the underlying EBITDA.
  • With its share price having got battered, South32 stock is compellingly priced relative to MVR ETF paving way for a compelling long-short trade.

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Oct 09
0

Daily Brief Australia: Liontown Resources and more

By | Australia, Daily Briefs

In today’s briefing:

  • Liontown Resources (LTR AU): Passive Selling on Lower Float

Liontown Resources (LTR AU): Passive Selling on Lower Float

By Brian Freitas

  • Liontown Resources (LTR AU) is trading near A$3/share, the level of Albemarle Corp (ALB US)‘s revised offer and where Hancock Prospecting has been buying recently. 
  • With Hancock Prospecting accumulating a stake of nearly 17% over the last month, there will be a float reduction for Liontown Resources (LTR AU) in the next few months.
  • Short interest has been increasing and the passive selling could provide an exit for the shorts. But Hancock Prospecting could also use the opportunity to buy more Liontown Resources stock.

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Oct 08
0

Daily Brief Australia: South32 Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Reshaping South32’s Low-Carbon Footprint

Reshaping South32’s Low-Carbon Footprint

By David Blennerhassett

  • Since being spun out from BHP in 2015, South32 Ltd (S32 AU) has doggedly addressed its vast asset portfolio. 
  • This strategy has not been without issue, such as the US$1.3bn writedown in Hermosa base metals project (zinc, lead) earlier this year due to inflationary pressure from inputs (steel, cement).
  • Not unlike other major miners, commodities tethered to the energy transition form a key cornerstone of South32’s forward objective, potentially leading to coal asset divestment and further copper (lithium?) acquisitions. 

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Oct 05
0

Daily Brief Australia: Amaero International Ltd, Qantm Intellectual Property, State Gas Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Amaero International Ltd – Transformative Decision to Dedicate First Atomiser to C-103
  • QANTM Intellectual Property Ltd – FY23 Peer Metrics Underscore QIP’s Relative Value
  • State Gas – First Gas Milestone Is Around the Corner

Amaero International Ltd – Transformative Decision to Dedicate First Atomiser to C-103

By Research as a Service (RaaS)

  • Amaero International Ltd (ASX:3DA) is a global specialist in advanced materials manufacturing for the defence, aerospace, and other industrial sectors.
  • The company is developing a 1,000+-tonne a year critical metals alloy powder manufacturing facility in Tennessee, USA, and announced last week that its first EIGA gas atomiser would be dedicated to the refractory alloy powder, C103 (niobium 89%,-hafnium 10%,-titanium 1%), for hypersonic and space applications.
  • The decision to focus initially on C103 is in response to US industry demand for refractory alloy powders and driven by the talent and expertise that Amaero has brought together in its senior executive team. 

QANTM Intellectual Property Ltd – FY23 Peer Metrics Underscore QIP’s Relative Value

By Research as a Service (RaaS)

  • QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys, and Sortify.tm.
  • It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market with ~16.5% market share (FY23) in its key patents segment (67% of revenue) and a diversified mix of local and foreign clients (~45%/55% split; ~50% US$ revenue).
  • We have reviewed recent results from the listed Australian and UK companies that we consider to be peers and have found that QIP mostly outperformed the group in terms of EBITDA margin expansion in FY23.

State Gas – First Gas Milestone Is Around the Corner

By Research as a Service (RaaS)

  • State Gas Limited (ASX:GAS) is a junior energy producer and explorer with assets concentrated in the Bowen Basin, Queensland.
  • The company has released an update on the pre-construction phase of its proposed Rolleston West CNG Project in the Bowen Basin.
  • Significant progress has been made with regulatory approvals on environmental and cultural heritage now received for all construction and pipeline areas; and final site surveys completed. 

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Oct 03
0

Daily Brief Australia: Symbio Holdings, S&P/ASX 200 and more

By | Australia, Daily Briefs

In today’s briefing:

  • Symbio: Aussie Broadband Lobs Competing NBIO
  • EQD | S&P/ASX200 Index Stuck, But Could Bounce Soon

Symbio: Aussie Broadband Lobs Competing NBIO

By David Blennerhassett

  • On the 22 September, Symbio Holdings (SYM AU) received a best and final NBIO from Superloop Ltd (SLC AU) : A$1.425 cash and 2.14 Superloop shares for each Symbio share.
  • Those indicative terms backed out an implied price of A$2.85/share, or a 20% premium to undisturbed.  Now Aussie Broadband (ABB AU) has snuck in with a superior cash/scrip Offer.
  • The competing Offer’s implied consideration of A$3.151/share boasts a larger cash component vs. Superloop.  Symbio’s board is supportive if terms are firmed. Superloop’s Offer has now lapsed. 

EQD | S&P/ASX200 Index Stuck, But Could Bounce Soon

By Nico Rosti

  • The S&P/ASX 200 INDEX is trading below the Q3 WEEKLY support at 7072 (OVERSOLD). It closed down 2 weeks in a row (CC=-2) and this week is also down (CC=-3).
  • As previously discussed the index is stuck in a range since August 2021, but from a short-term tactical viewpoint it could bounce soon, still remaining in range.
  • Current support range is 7072-6900, there is a good chance to see a bounce from this area within 2 weeks.

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Oct 02
0

Daily Brief Australia: Rio Tinto Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Selected European HoldCos and DLC: September’23 Report

Selected European HoldCos and DLC: September’23 Report

By Jesus Rodriguez Aguilar

  • The discounts to NAV of covered holdcos have generally tightened during September. Discounts to NAV: C.F.Alba, 49.2% (vs. 46.6%); GBL, 35.3% (vs. 36.2%); Heineken Holding, 14.5% (vs. 17.9%); 
  • Industrivärden C, 7.4% (vs. 7.8%); Investor B, 15.4% (vs.  16.6%); Porsche Automobile Holding, 41.1% (vs. 41.5%). The spread of Rio DLC tightened to 15.8% (vs. 17.8%).
  • What seems interesting: holding trades, Investor B vs. listed assets, Porsche SE/vs. listed assets and the Rio DLC: long RIO LN/short RIO AU.

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