Daily Brief Australia: Rio Tinto Ltd, Iron Ore, Gajah Tunggal, Pointerra Ltd and more

• Just shy of three years ago, BHP (BHP AU) announced the unification of its dual-headed corporate structure to make BHP “simpler and more agile”.
• Collapsing DLCs/share-classes was all the rage back then. The prior year, Unilever (UNA NA) collapsed its DLC; and Royal Dutch Shell  unified its A and B lines in 2021. 
• Rio (RIO AU/LN) is one of only a handful of remaining DLCs. Renewed investor calls to unwind the DLC and the recent UK’s listing regime reform necessitate a rethink.

• Weakness Persists: Iron ore prices hovered at critical support level of $100/ton on consistent ample supply & weak demand driven by China’s slowing manufacturing sector.
• Options Market Shift: Despite overall bearish sentiment, the options market showed increased call activity, particularly for front-month expiries, indicating potential short-term bullish speculation.
• Production & Supply Outlook: Major producers like Vale & Rio Tinto are expected to increase iron ore output, contributing to a bearish outlook due to ample supply in global markets.

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.

• Gajah Tunggal
• Japfa Comfeed Indonesia
• Nickel Industries

• RaaS Research Group has published an update report on 3D spatial data solutions group Pointerra (ASX:3DP) after the release of the Q4 cash flow and activity statements which saw a 241% increase in Q4 cash receipts to $2.67m, the best result in five quarters.
• Cash receipts were the largest reported of any quarter in FY24 and the highest reported since Q3 FY23.
• Cash burn for the quarter was contained to $0.18m, the best result in five quarters, with administration and other costs essentially flat year-on-year and employee costs declining 7% for the period.