Energy & Materials Sector

• US crude oil inventories buildup outpaces gasoline and distillate withdrawal for the week ending on 23/Feb.
• Refinery utilisation rates rose by 0.9 percentage points on a weekly basis to 81.5%, for the first time in 2024.
• Disparity between crude oil and refined petroleum inventories to remain in the near term as refinery utilisation rates are yet to recover completely after the maintenance season.

• Cheniere Energy, Inc.
• has reported substantial operational and financial attainments for Q4 and the entire year of 2023.
• The company produced a record 637 LNG cargoes, with a total production amounting to 45 million tons, in line with their forecast.

Nickel Industries Limited has released sound FY 2023 numbers, driven by a series of capital-raising initiatives that have strengthened the company’s balance sheet. The operating results were satisfactory, with capacity growth and competitive first-quartile cash costs more than offsetting lower nickel prices (down c. 50% in the past year). NIC is also making good progress in the transition away from nickel pig iron (NPI) production to Class 1 nickel production.

Group EBITDA increased 19% y-o-y to USD 403 mn, due to robust production volume growth. Net debt fell to USD 66 mn from USD 415 mn, thanks to material cash proceeds from the capital-raising initiatives. Gross Debt/EBITDA and Net Debt/EBITDA were 2.2x and 0.2x, respectively, at FYE 2023. EBITDA/Interest stood at 5.7x. Liquidity is adequate, with USD 779 mn cash and c. USD 200 mn available credit lines (vs. USD 845 mn total debt).

We continue to expect robust double-digit EBITDA growth of c. 20% in FY 2024 and c. 2x Gross Debt/EBITDA. This will likely be supported by capacity expansion.

• EOG Resources had an impressive financial performance in Q4 and 2023, primarily characterized by strong volume growth, the delivery of their production milestone, and the generation of significant free cash flow.
• EOG achieved their production milestone, producing more than 1 million barrels of oil equivalent per day, beating their volume targets.
• Their adjusted net income was $6.8 billion, a return on capital employed of 31%.

• Cheniere Energy, Inc.
• has reported substantial operational and financial attainments for Q4 and the entire year of 2023.
• The company produced a record 637 LNG cargoes, with a total production amounting to 45 million tons, in line with their forecast.

• Pioneer Natural Resources attained strong results in its second quarter with oil production near the top end of its guidance range thanks to improved well performance and efficient operations.
• The increased production and concurrent lowering of full year 2023 capital guidance suggests an enduring strength in Pioneer’s capital efficiency.
• In addition, the company also successfully returned 75% of its free cash flow to shareholders through dividends and opportunistic share repurchases, signaling strong financial management and a focus on shareholder value.

• The Jetstream #1 appraisal well at the Topaz helium project in Minnesota encountered helium shows while drilling, with helium concentration of up to 12.4% according to the on-site spectrometer.
• The helium shows were encountered at depths of 1,750 – 2,200 feet (TD: 2,200 feet).
• The helium mudlog gas composition increased from 3.7% to 5.1% over the period.

• 4Q23 disappoints but headwinds subsiding. RYAM reported 4Q23, which included solid revenue of $422 million, ahead of our estimate of $373 million.
• However, adjusted EBITDA of $37 million fell well short of Street expectations and our $48 million forecast on weaker-than-expected paperboard demand and lower-than-anticipated pulp prices.
• Right-sized inventory suggests modest growth. With customer channel destocking largely completed in 4Q23, RYAM’s businesses should see a more stable demand environment throughout 2024 and, combined with modest share-driven volume growth and lower input costs, improved gross and EBITDA margins.

• SDRL ended 2023 with in line results as the Company readies for a year filled with maintenance. The commentary surrounding market conditions has not changed greatly since third quarter results.
• There is still a lack of new supply but being able to match available supply to operators’ demand calendar has become challenging
• SDRL reported fourth quarter 2023 revenue of $408 million and operating income of $52 million, which were both in line with our estimate.

• The Mosaic Company’s fourth quarter and full year 2023 earnings highlighted robust phosphate markets and an expected recovery of demand for potash.
• Mosaic’s CEO, Bruce Bodine, spoke positively about their financial performance in 2023, with reported revenue of $13.7 billion and adjusted EBITDA of $2.8 billion, along with investing $1.4 billion in the business and returning $1.1 billion to shareholders through share repurchases.
• One positive takeaway from the call was the strong phosphate market conditions, resulting from tight supply due to China’s fertilizer export restrictions and limited capacity additions in the short term.

• Western Midstream Partners (WES) reported its fourth-quarter and full-year 2023 earnings with a mixed financial result.
• Nevertheless, the company retains a degree of optimism, particularly when considering certain initiatives and expected future outcomes.
• In 2023, Western Midstream Partners successfully divested its remaining interest in several non core, non-operated assets worth $790 million.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Medco Energi’s ESG as “Adequate”, in line with its scores for the Environmental, Social and Governance pillars. Controversies are “Immaterial” and Disclosure is “Adequate”.

• Godolphin Resources Limited (ASX:GRL) is an ASX-listed green metals and critical minerals explorer with a focus on central west New South Wales.
• The company’s projects include the Narraburra rare earths element (REE) project, the Goodrich copper prospect, the Yeoval copper-gold-molybdenum project and the Gundagai gold project.
• The projects are predominantly located on the Lachlan Fold Belt, a highly prospective province for the discovery of rare earth elements, copper, gold and base metal deposits. 

• Godolphin Resources Limited (ASX:GRL) is an ASX-listed green metals and critical minerals explorer with a focus on central west New South Wales.
• The company’s projects include the Narraburra rare earths element (REE) project, the Goodrich copper prospect, the Yeoval copper-gold-molybdenum project and the Gundagai gold project.
• The projects are predominantly located on the Lachlan Fold Belt, a highly prospective province for the discovery of rare earth elements, copper, gold and base metal deposits.

• International Flavors and Fragrances Inc.
• (IFF) reported its fourth quarter and full year 2023 earnings, where it was highlighted that comparable currency-neutral sales increased by 1%, and comparable currency-neutral EBITDA grew by 17% for the fourth quarter.
• This comes amid a reported sales decline underscoring resilience within the company’s operational framework.

• Marathon Oil’s Q4 and full year 2023 results and full year 2024 outlook have highlighted some of the successes and challenges faced by the company.
• The company’s Chairman, President, and CEO, Lee Tillman, emphasized on the company’s commitment to safety, environmental responsibility, and ongoing work to achieve zero routine flaring.
• The company has continued to prioritize providing safe working conditions and has achieved a record safety year in 2023.

• Alkane Resources Limited (ASX:ALK) is an ASX-listed gold producer and explorer with a focus on central west New South Wales.
• The Perth-headquartered company owns and operates the Tomingley gold mine and processing facilities, south-west of Dubbo and the Northern Molong porphyry project in central west NSW which includes the highly prospective Boda and Kaiser deposits.
• ALK recently announced high-grade results from the Kaiser resource upgrade drilling programme and upgraded the Boda resource to 6.6mn ounces of gold equivalent (AuEq), with 4.4Moz AuEq inferred. 

• ECVT continues to encounter macro headwinds in its business after seeing softness in certain end markets in the middle of 2023. 
• We believe the trough in the business is underscoring the attractive nature of ECVT’s operations. The Company continues to generate free cash flow
• Looking ahead, the free cash flow generation in 2024 provides greater balance sheet flexibility in reducing leverage and/or buying back more stock

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

• There are five changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that will be implemented at the close on 27 March. Changes are on expected lines.
• Estimated one-way turnover for the NSE Nifty Next 50 Index (NIFTYJR INDEX) is 10.1% resulting in a one-way trade of INR 22.2bn (US$268m).
• Apart from the impact on the adds and deletes, there will be a big impact on some of the non-F&O stocks due to capping and funding flows.

• Upon evaluation of LyondellBasell’s Q4 and full-year 2023 results, a finely balanced investment thesis can be derived, considering the company’s strategic initiatives, performance, and the broader economic environment.
• LyondellBasell safely navigated a challenging year, as illustrated in its outcome of earning $8.65 per share and a robust EBITDA of $5.2 billion.
• The company’s cash generation was commendable, marked at $4.9 billion from operations, validating its efficient cash conversion ratio of 98%.

• VAALCO is in discussions with Svenska Petroleum Exploration regarding a possible corporate transaction to acquire Svenska, whose primary asset is a 27.39% interest in Block CI-40, offshore Cote d’Ivoire.
• Current working interest production is approximately 4,500 boe/d net to Svenska.
• In 2022, Svenska generated after tax cashflow (before changes in working capital) of ~US$115 mm.

• Sky Metals Limited (ASX:SKY) is an ASX-listed base metals explorer focused on a portfolio of assets in New South Wales with the most advanced being the Tallebung tin project in central NSW. The company recently made material progress on the expansion of the mineral resource estimate (MRE) at Tallebung which positions it to be scoped for a bulk-mining operation.
• SKY says it is now planning a further drilling programme on a defined exploration target of approximately 23Mt-32Mt at a grade of between 0.14%-0.17% tin to build out the indicated resource for the mine scoping studies.
• The cash balance of $1.12m at the end of December 2023 suggests to us that the company may need to raise capital to complete its programme.

• TM announced its operational highlights for Q3 ending Dec 31st.
• The Company reported its first operational profit, albeit small, setting itself up for a big year in 2024 as the underground comes online.
• TM announced plans to spin-out its Moroccan assets, namely the Silver Hill and Addana projects.

• Alkane Resources Limited (ASX:ALK) is an ASX-listed gold producer and explorer with a focus on central west New South Wales.
• The Perth-headquartered company owns and operates the Tomingley gold mine and processing facilities, south-west of Dubbo and the Northern Molong porphyry project in central west NSW which includes the highly prospective Boda and Kaiser deposits.
• ALK recently announced high-grade results from the Kaiser resource upgrade drilling programme and upgraded the Boda resource to 6.6mn ounces of gold equivalent (AuEq), with 4.4Moz AuEq inferred.

• Vulcan Materials is America’s largest producer of construction aggregates, providing the foundation for buildings, roads, and infrastructure.
• The company owns over 400 quarries located within 60% of the US population, producing aggregates used in asphalt and concrete.
• The industry structure involves owning quarries and crushing rocks down to create materials used in various construction projects, with a market size of around $35 billion.

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

Edison Investment Research is terminating coverage on Egdon Resources (EDR). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

Pan American Silver (PAAS) has released its FY23 financial results, which are in line with our estimates at the EBITDA level, an encouraging outcome given the operationally challenging year. While the bottom line was once again affected by non-cash one-offs, cash flow generation was robust, with FY23 operating cash flow of US$450m. We have slightly adjusted our FY24 estimates and rolled the model forward, resulting in a marginally updated valuation of US$22.2/share. The company’s decision to launch a buyback should partly compensate for the weak share price performance, which we believe does not reflect supportive gold market fundamentals and what is likely to be a year of more consistent operating performance.

• Samsung Active Management launched the first Corporate Value Up ETF called KoAct Dividend Growth Active ETF on 27 February. It also revealed some of the major constituents of this ETF.
• Samsung Active Management revealed the top 20 constituents of this ETF, which comprised 73.2% of the total ETF AUM.
• In the coming weeks, there will be many other Corporate Value Up related ETFs that will be created that are similar to Samsung’s KoAct Dividend Growth ETF. 

• Adbri (ABC AU) has entered a scheme implementation deed with CRH (CRH US) and Barro at A$3.20 per share, a 41.0% premium to the undisturbed price of A$2.27 (13 December).
• The offer requires shareholder and FIRB approval. FIRB approval for the bidder, CRH, should be forthcoming as it is a Fortune 500 company with HQ in Ireland. 
• The offer is attractive vs. peer multiples and historical ranges. At the last close and for a mid-June payment, the gross/annualised spread is 1.9%/6.6%.

• We are revisiting the assumptions in our model for ADF following strong industry data and positive conversations with management. 
• We are increasing our revenue and profitability estimates from Q4 onward to reflect the more bullish outlook.
• We have increased our target multiple to 6.5x FY25 EBITDA (previously 6.0x), leading to a new $13.00/share target price (previously $10.00/share).

• Ecolab Inc., during their latest earnings, highlighted strong growth in their fourth quarter performance for 2023, solidifying a favorable year for the company.
• Despite unstable macroeconomic conditions, the team drove value-based pricing while consistently maintaining strong business momentum.
• Their success arose from creating value for customers by enhancing operational performance, as well as reducing water and energy consumption.

• Phillips 66 delivered a strong performance in the fourth quarter and for the full year 2023.
• It reported a total shareholder return of 33% in 2023 and also increased its quarterly dividend by 8%.
• The company highlighted its diversified and integrated portfolio as a key aspect of its business strategy, claiming that it delivered strong returns on capital employed and a high payout ratio backed by dividend growth.

• Alcoa (AA US) has made a non-binding, indicative and conditional proposal to acquire all shares in Alumina (AWC AU). Shareholders will receive 0.02854 shares of Alcoa for each Alumina share. 
• Alcoa (AA US) has entered into an agreement with Allan Gray Australia that gives them the right to acquire 19.9% of Alumina Ltd (AWC AU) at the same swap ratio.
• Alumina Ltd (AWC AU) is a potential delete from the ASX100 Index at the March rebalance and that could provide an entry into the stock.

• CSR Ltd (CSR AU) has entered a scheme implementation deed with Cie De Saint-Gobain (SGO FP) at A$9.00 per share, a 32.9% premium to the undisturbed price (20 February).
• The offer has a ticking fee of A$0.02 per month (accrued daily) if the scheme’s effective date is delayed beyond 26 June. The offer requires FIRB approval. 
• The offer is attractive and represents a 15-year high. At the last close and for a mid-June payment, the gross/annualised spread is 7.4%/28.8%.

• Alumina Ltd (AWC AU)‘s non-binding proposal from Alcoa (AA US) is 0.02854 Alcoa shares per Alumina share, implying a value of A$1.15, a 13.1% premium to the undisturbed price.
• Alcoa has been granted a 20-business day exclusivity period. The Board intends to recommend a binding proposal. Allan Gray, the largest shareholder, is supportive. 
• While strategically sensible, the offer is not a knockout bid. The headcount test is a risk as retail forums suggest a majority view forming against the offer. 

• On the 21st Feb, Saint-Gobain (SGO FP) made an indicative Offer to CSR Ltd (CSR AU) shareholders of A$9/share by way of a Scheme, a 34% premium to last close. 
• Saint-Gobain and CSR have now entered into a definitive agreement, also at $9/share. The business combination has been unanimously approved by the boards of both companies. 
• Conditions include CSR’s shareholder approval and FIRB signing off. No specific mention of ACCC. The transaction is expected to close in the second half of this year.

• Back on the 18 December 2023, construction play Adbri (ABC AU) entered into a process and exclusivity deed with CRH (CRH US) and 42.7%-shareholder Raymond Barro (Chairman).
• Adbri has now entered into a Scheme Implementation Deed with CRH under which CRH will acquire all of the shares in Adbri that the Barro Group does not currently own.
• Conditions include Adbri’s shareholder approval and FIRB signing off. The transaction is expected to close in June of this year.

• Valero Energy Corporation recorded strong financial results for the fourth quarter of 2023 and the highest fourth quarter and full-year adjusted earnings in the company’s history, excluding the results of 2022.
• The refining system achieved a mechanical availability of 97.4%, the highest to date, highlighting the benefits from Valero’s commitment to safe, reliable, and environmentally responsible operations.
• Valero also set a record for sales volume in 2023, capturing around 1 million barrels per day, exemplifying the strength of its branded and wholesale marketing network.

• Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
• The company has reported an 11% increase in H1 FY24 revenue to $1.6m with its transactional platform, RentPay delivering a 137% increase in revenue to $0.22m, driven by a 122% increase in customers and ARPU growth of 18%.
• The search portal reported a positive EBITDA of $0.092m for the half, its best result in two years and up 42% on the previous corresponding period (pcp), while RentPay posted a loss of $1.029m, flat on the pcp, and a 26% improvement on H2 FY23.

• Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
• The company has reported an 11% increase in H1 FY24 revenue to $1.6m with its transactional platform, RentPay delivering a 137% increase in revenue to $0.22m, driven by a 122% increase in customers and ARPU growth of 18%.
• The search portal reported a positive EBITDA of $0.092m for the half, its best result in two years and up 42% on the previous corresponding period (pcp), while RentPay posted a loss of $1.029m, flat on the pcp, and a 26% improvement on H2 FY23. 

• TPL benefited from an increase in production rates in the Permian Basin to report better than expected fourth quarter results
• Production has been volatile in recent quarters depending on multiple factors. The steady state of oil above $70 a barrel and improved supply chains has resulted in production rising. 
• The boost in earnings has led to TPL building a cash cushion of $725.2 million and creating anxiety for many investors as to what TPL’s management would do next

• Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
• The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
• The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.

• Pittsburgh-Based Alcoa (AA US) is offering 0.02854 of its own shares for each Alumina Ltd (AWC AU) share, a 13% premium to last close. Alumina recommends the Offer to shareholders.
• Alumina owns a 40% stake in Alcoa World Alumina & Chemicals, a JV with Alcoa that operates bauxite mining, alumina refining, and aluminium smelting operations. Alcoa owns the remaining 60%.
• Separately, Alcoa announced it has entered into an agreement with Allan Gray Australia that gives it the right to acquire up to 19.9% of Alumina. CITIC also holds 18.9%.

• TGS is seizing an opportunity by acquiring a competitor at a low valuation, in an all-share deal 0.06829 TGS NO x 1 PGS NO, departing from its traditional asset-light approach.
• The Merger is subject to ongoing review by UK and Norwegian competition authorities. I believe the deal will be cleared, but might be delayed until Q4.
• The dividend-adjusted gross spread is 6.7%. Regulatory approval concerns seem overblown. I would set up the spread.

• Hyosung Corp’s split diverges from usual Korean market splits. No tender offer is expected post-new holding company formation, reducing value accretion opportunities.
• Sibling separation in Hyosung Corp’s split mandates shares cross-transfers. Hence, block deals among siblings are plausible.
• This scenario resembles the case in December 2021 when LX Koo Bon-joon disposed of LG Corp shares through a block deal instead of a swap, causing an 8% drop.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Toei Animation (4816 JP)‘s US$550 Million secondary offering and Trial Holdings (5882 JP) IPO.
• Event-Driven developments: Azure Minerals (AZS AU), Boral Ltd (BLD AU), CSR Ltd (CSR AU),  China Traditional Chinese Medicine (570 HK), Outsourcing Inc (2427 JP), Snow Peak Inc (7816 JP). 

• CF Industries Holdings Inc., a global leader in nitrogen-based fertilizers, reported a strong performance for the full year and fourth quarter of 2023.
• The company posted an adjusted EBITDA and net cash from operations of approximately $2.8 billion each, and a free cash flow of $1.8 billion.
• This robust outcome was attributed to a balanced nitrogen supply-demand situation and energy spreads favoring the company’s low-cost production in North America..

• Martin Marietta, a provider of aggregates and heavy building materials, presented a decent financial performance for the full year and fourth quarter of 2023.
• Positive elements in the report include the company’s record financial performance, reaching a milestone of $2.1 billion in adjusted EBITDA. Additionally, the company noted that it had a successful, safe year without any major incidents.
• This was also underpinned by the strong performance of the company’s aggregates business which drove revenues up by over 10% to $4.3 billion.

• The Williams Companies has reported strong performance in the third quarter of 2023 with significant advances in operational execution, project completion, and positive expansion achievements.
• In an environment of low gas prices compared to the third quarter of 2022, the company saw an impressive uptick in several areas.
• The first half of Transco’s Regional Energy Access project, which will increase natural gas transportation from the northeast part of the Marcellus Shale to markets in Pennsylvania, New Jersey, and Maryland, has been completed, and the second half is slated for completion in the last quarter of 2024.

• Albemarle Corporation’s 2023 earnings reported net sales of $9.6 billion, a 31% rise compared to 2022 with volume growth contributing 21% to the increase.
• The energy storage sector delivered 35% volumetric growth.
• The corporation’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2023 were $2.8 billion or $3.4 billion, excluding a lower-cost charge recorded in Q4.

• Reliance, Inc.
• released its Fourth Quarter and Full Year 2023 financial results with officials highlighting the firm’s strong operational and financial performance for 2023 despite a challenging environment.
• The company’s President and CEO, Karla Lewis, notably acknowledged the company’s recent name change from its original name which had included the words ‘steel’ and ‘aluminum.’ Lewis noted that the name change reflected the evolution of the company beyond metal in the form of being a family of diversified businesses.

• US commercial crude inventory buildup slows down and comes below analyst estimates.
• US oil rig count is anticipated to remain flat in 2024 and crude production is expected to slightly pick up due to better productivity.
• Demand is expected to rise in the near term as US refineries may start increasing utilisation rates given forecasts of warmer weather.

Key points

• Oslo-listed company focused on residual value of a 7th generation UDW drillship acquired at low cost before offshore market downturn
• Market cap of USD 187 million with potential for dividends and special payouts
• Secured charter contract with Saipem, poised to generate significant revenue and deliver solid returns for investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Occidental Petroleum’s Q4 2023 has displayed a robust performance in recent quarters, achieving a strong free cash flow of $5.5 billion.
• Significantly, this has facilitated the company in paying dividends, repurchasing common shares, and investing back into the business.
• The primary driver of this achievement is accredited to technical expertise, leading-edge technologies, and innovation, showcasing the company’s operational strength.

• The drilling of the Jetstream #1 helium appraisal well at Topaz is taking longer than anticipated due to drilling fluid losses in a void section above the reservoir.
• This prevents fluid circulation and the recovery of drill cuttings to the surface.
• • The Company has made the decision to pivot from drilling with water, to drilling with air.

• Cie De Saint-Gobain (SGO FP) is offering CSR (CSR AU) shareholders A$9/share by way of a Scheme, a 34% premium to last close. That’s a knockout price.
• The Offer is indicative. Confirmatory due diligence is ongoing. CSR board has, not surprisingly “unanimously resolved to pursue the offer at an agreed price of A$9.00“. 
• A firm offer would be subject to FIRB and shareholder approval. Neither should pose an issue. Assuming a firm Offer is shortly forthcoming, this could be wrapped up late-July

Key points

• Energean has shown smart capital allocation and operational execution, particularly in the development of a large gas field with a 17-year production runway
• The company’s core asset in Israel generates gas at a low cost and has promising supply-demand dynamics in the region
• With a 10% dividend yield and potential for 15-20% returns in 2-3 years, Energean is being considered as a good long-term investment opportunity

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• 2P YE23 reserves were estimated at 115.1 mmboe.
• Excluding 14.6 mmboe at YE22 in Chile (being sold), this compares to 113.8 mmboe at YE22.
• During 2023, GeoPark has added ~14 mmboe of 2P reserves.

• The FY23 production of 8,471 bbl/d was in line with previous indications.
• YE23 cash, gross debt and cash advances had been previously reported.
• The FY24 production guidance is now 11-13 mbbl/d (11-14 mbbl/d previously) as Panoro has incorporated a pause in drilling offshore EG. The main factor driving the adjusted upper limit of guidance range is the timing to secure a new rig in EG and deferral of some associated production.

• The AFR reports that JPMorgan is selling 14.5% of Azure Minerals (AZS AU) shares at A$3.42. The primary seller is said to be Mineral Resources (MIN AU), seeking to exit.
• MinRes’ decision to sell out a discount rather than accept the scheme A$3.70 offer reflects the cost of securing a say on Andover and the opportunity cost of capital. 
• The transaction booklet will be despatched in early March. At the last close and for an early May scheme payment, the gross/annualised spread is 2.5%/13.4%. 

• JPMorgan is placing MinRes (MIN AU)‘s 14.5% stake in Azure Minerals (AZS AU) at A$3.42/share, a 5% discount to last close and a 7.6% discount to the A$3.70/share Scheme price. 
• It was reported last month that MinRes, who paid up to ~A$4.00/share for some of its stake, was looking to exit. But cash now vs. ~8% more in two months?
• Given the recent rout in lithium and nickel prices, one wonders if a MAC landmine lurks. Or, quite simply, MinRes just needs the cash. Expect Azure to fall tomorrow.

• On 21 February, NPS announced that it will select three domestic asset management companies to manage funds that will be allocated to the “corporate value up” program. 
• NPS plans to accept proposals from the local asset management and investment advisory companies from 21 to 29 February. NPS is likely to finalize the selected candidates sometime in March. 
• We provide a list of 34 companies where the NPS has at least 5% ownership stake, with PBR of 0.5x or less, and included in KOSPI 200.

• Cie De Saint-Gobain (SGO FP) has approached CSR Ltd (CSR AU) with a non-binding indicative offer to acquire all of CSR’s shares at A$9/share via a scheme of arrangement.
• At the last close of CSR (pre-trading halt) the gross spread to the offer price is 13.21%. That will close significantly once the stock resumes trading.
• Given the large premium to the last close, at a price higher than the highest high, and support from the CSR Board, the deal should go through.

• Mineral Resources (MIN AU) is looking to raise up to A$229m (US$150m) via a secondary block trade in Azure Minerals (AZS AU), which will be a clean-up. 
• The deal is a large one to digest, at approximately 51.6 days of three month ADV and 13.8% of current mcap. 
• In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

• In response to media speculation, Cie De Saint-Gobain (SGO FP) confirmed a non-binding proposal for CSR Ltd (CSR AU) at A$9.00, a 32.9% premium to the undisturbed price.
• Saint-Gobain is conducting confirmatory due diligence. CSR is at a trading halt concerning receiving a proposal regarding a potential material transaction involving CSR.
• Shareholders should be supportive as the offer represents a 15-year high. The timing of a binding agreement is the key risk.  

• EV supply chain is at a nascent stage in ASEAN and EV adoption in the region lags behind developed markets despite boasting a large population with a burgeoning middle class.
• However, Governments in the region continue to introduce new initiatives and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.
• The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

• Asahi Kagaku Kogyo’s Facility in Kunshan, China Asahi Kagaku Kogyo (TYO 7928) is a $12m market cap net-net industrial plastics manufacturer that over the last 10 years mostly operates around breakeven.
• The business itself isn’t interesting, but it’s a positive that they aren’t losing money.
• There also isn’t a single writeup on this company or any mentions of it on X/Twitter, so it’s definitely under the radar.