In today’s briefing:
- AAG Energy (2686 HK): Curiouser and Curiouser
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Identifying Potential Changes
- Dow Inc.: What Is Its Biggest Competitive Advantage? – Key Drivers
- Earthstone Energy, INC. – Gaining Permian Efficiency
- While Commodities sold off – we made profits // Some relief on the sugar front
- Kinder Morgan Inc.: Boosting Natural Gas Volumes & Leveraging International Travel to Increase Its Jet Fuel Prices – Key Drivers
AAG Energy (2686 HK): Curiouser and Curiouser
- AAG Energy Holdings (2686 HK) is one of those periodic (and rare) takeover situations that will likely be remembered for what went wrong rather than what went right.
- A low-balled Offer (proxy advisors agree); perfunctory IFA analysis; a large, and silent, shareholder; and the postponement of the Scheme vote due to voting instructions not being “duly processed”.
- A new Court Meeting has been confirmed for the 2 June. And now we have some odd CCASS movements which raise further questions.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Identifying Potential Changes
- The review period for the June rebalance ends on 31 May. Announcement of the changes will be made on 9 June with implementation at the close on 16 June.
- There could be 4 or 5 A-share additions due to their inclusion in Northbound Stock Connect. That in turn expands the universe and could result in up to 3 deletions.
- If all changes go through as expected, estimated one-way turnover at the rebalance will be 15.1% resulting in a one-way trade of US$99m.
Dow Inc.: What Is Its Biggest Competitive Advantage? – Key Drivers
- Dow had a challenging quarter given the ongoing market dynamics.
- The year’s first quarter is expected to align with the fourth-quarter performance, with discrete headwinds of $75 million.
- We give Dow Inc. a ‘Hold’ rating with a revised target price.
Earthstone Energy, INC. – Gaining Permian Efficiency
- Earthstone generated $272 million of adjusted EBITDA in 1Q23 on average production of 104.4 MBOE/d.
- Production was slightly below the 104.8 MBOE/d produced in 4Q22 and 194% higher than 1Q22.
- 1Q22 adjusted EBITDA was $123 million. Y/Y gains in both production and adjusted EBITDA demonstrate the impact of three major Permian Basin asset acquisitions that closed in 2022.
While Commodities sold off – we made profits // Some relief on the sugar front
- The wobbly first four months of the year are over, and it has become easier to detect clear trends in the market.
- As you can see, our YTD performance has clearly picked up, and we’re confident that we’ll continue to clearly outperform the CRB Commodity Index.
- Consultancy Datagro announced on Thursday that Brazil’s center-south region is anticipated to have a sugar output of 38.3 million tonnes in the current season, which began in April.
Kinder Morgan Inc.: Boosting Natural Gas Volumes & Leveraging International Travel to Increase Its Jet Fuel Prices – Key Drivers
- Kinder Morgan had a mixed quarter with below-par revenues but it managed an earnings beat.
- As compared to the first quarter of 2022, natural gas gathering volumes increased by 18%, with Haynesville volumes increasing by 42% and Eagle Ford volumes rising by 21%, respectively.
- For the quarter compared to the first quarter of 2022, volumes of refined products in Kinder Morgan’s product pipeline segment were unchanged.
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