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In today’s briefing:
- Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares
- Kumho Petrochemical – A Significant Shares Cancellation Announcement
- Azure Minerals (AZS AU): Scheme Vote on 8 April
- Silver: Is a Breakout Imminent?
- Daiichi Kigenso Kagaku-Kogyo (4082) – Awaiting Solid Execution
- CNX Resources: Hit the Gas – [Business Breakdowns, EP.152]
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Interpreting Kumho Petro Chemical’s Unexpected Move to Cancel Treasury Shares
- Kumho Petro Chemical (011780 KS) intends to retire 50% of its common shares, totaling 2,624,417 shares, starting from the 2024 fiscal year until the 2026 fiscal year.
- With the annual general meeting nearing, NPS hasn’t revealed its support, causing unease for Park Chan-gu. Considering NPS’s obligation to the Value-Up policy, cancellation seems inevitable for Park Chan-gu.
- Whether the battle persists hinges on NPS’s stance. If NPS backs Park Chan-gu, their stake surpassing 25% could deter the opposition’s financial strength. Conversely, NPS’s neutrality could escalate the battle.
Kumho Petrochemical – A Significant Shares Cancellation Announcement
- After the market close on 6 May, Kumho Petrochem announced a significant shares cancellation program which is likely to have a positive impact on its share price.
- The company announced that it will cancel 430 billion won worth of its common shares in the next three years, representing nearly 10.5% of its market cap.
- Park Chul Wan, nephew of Kumho Petrochem Chairman Park Chan Koo, has been very vocal about the need for Kumho Petrochem to improve its corporate governance in past several years.
Azure Minerals (AZS AU): Scheme Vote on 8 April
- The Azure Minerals (AZS AU) IE considers Sociedad Quimica y Minera de Chile (SQM US)/Hancock’s scheme and takeover offer fair and reasonable as it is above its A$2.03-2.93 valuation range.
- The scheme is conditional on FIRB approval, which should be forthcoming as Azure’s key asset (Andover) will be majority-owned by Australian entities.
- The scheme vote will get up due to irrevocables and retail support. At the last close and for the 18 April payment, the gross/annualised spread was 3.1%/29.2%.
Silver: Is a Breakout Imminent?
- Gold and Silver have remained unresponsive to lower rates, escalating geopolitical risks and higher China and India seasonal demand.
- Notably, early February saw the emergence of two contrarian signals that merited closer attention.
- While these signals are not foolproof market timing tools, they warrant attention when they align with technical support levels within an established consolidation pattern.
Daiichi Kigenso Kagaku-Kogyo (4082) – Awaiting Solid Execution
- Q1-3 FY3/24 results were in line with company guidance, reflecting the strategic importance for DKK to scale its new growth initiatives.
- Ongoing positive developments related to semiconductor, secondary battery, and biomaterial applications were offset by weakness in electronics and the mature profile of the core automotive catalyst business.
- Operating a business model that is externally driven (such as FX movements and raw materials market pricing), the company has disclosed ROIC targets that coincide with its current 10-year plan for FY3/32.
CNX Resources: Hit the Gas – [Business Breakdowns, EP.152]
- CNX is an ENP exploration and production business focusing on natural gas with a long history in the energy sector
- CNX evolved from a coal company to a natural gas producer under new management led by CEO Nick
- The current business model focuses on monetizing assets, separating coal business, and leveraging the productive Marcellus shale for low-cost advantage.
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