In today’s briefing:
- S&P/ASX Index Rebalance (June 2024): Changes, Flows, Impact, Shorts & Positioning
- Guzman Y Gomez IPO – Peer Comp and Thoughts on Valuations
- Champion Iron (CIA AU): Q4 Results Update and Future Outlook
S&P/ASX Index Rebalance (June 2024): Changes, Flows, Impact, Shorts & Positioning
- There is 1 change for the S&P/ASX20 Index, 1 change for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index, and no regular changes for the S&P/ASX200 INDEX in June.
- The surprise inclusion of Wisetech Global (WTC AU) means that positioning is likely to be lower than the passive buying and there could be a move higher in the stock.
- There will be one adhoc inclusion to the S&P/ASX 200 (AS51 INDEX) at the close on 19 June following Cie De Saint-Gobain (SGO FP)’s acquisition of CSR Ltd (CSR AU).
Guzman Y Gomez IPO – Peer Comp and Thoughts on Valuations
- Guzman Y Gomez (GYG) now plans to raise US$221m, an increase from its earlier target of US$160m, in its Australian IPO.
- GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
- We have looked at the company’s performance in our past notes. In this note, we talk about valuations.
Champion Iron (CIA AU): Q4 Results Update and Future Outlook
- Champion Iron (CIA AU) reported an inline result for FY24, with revenue/profits up 9%/16% YoY. Q4 revenue/profits were -28%YoY/-73%YoY due to lower pricing on 60% of volumes in transit.
- The company-guided production volumes have reached the annualized 15 mnt mark, but logistics continued to be challenging in Q1. Easing is expected in August, and base case a 1.5-year destock.
- The name carries some risks trading at 7x PE FY25 (March end), but it could be one to watch in case the 65-62 spread widens.
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