In today’s briefing:
- IDX30/LQ45/IDX80 Index Rebalance: BIG Flows for Some Stocks
- OceanaGold Philippines IPO – Updated Thoughts on Valuation – Too Expensive Even at This Price
- Morning Views Asia: China Hongqiao
- Indika Energy – Event Flash – Launches Tender Offer And 5NC2 Notes Offering – Lucror Analytics
- Southwestern Energy Company: These Are The 4 Pivotal Factors Influencing Its Growth!
- Weatherford International plc: Initiation Of Coverage – Does It Have A Sustainable Economic Moat? – Major Drivers
- International Paper/DS Smith: Spread
- NOV Inc: How Are They Adapting Their Business Strategy To Cater To The Increasing Demand?
- Panoro Energy ASA (OSE: PEN): Drilling to restart in EG in June. 70% 2P reserve replacement ratio in 2023
- The Chemours Company: Initiation Of Coverage – A Deep Dive Analysis Of Its Seemingly Robust Financial Situation – Major Drivers
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IDX30/LQ45/IDX80 Index Rebalance: BIG Flows for Some Stocks
- There are 2 constituent changes for the LQ45 Index and 6 constituent changes for the IDX80 Index at the rebalance to be implemented at the close on 30 April.
- The largest passive inflows are expected in Amman Mineral Internasional (AMMN IJ), Indosat Tbk PT (ISAT IJ), Bank Rakyat Indonesia (BBRI IJ) and Merdeka Copper Gold Tbk PT (MDKA IJ).
- With only 4 days to implementation, there could be relatively big moves on stocks that have large flow/impact from passive fund trading.
OceanaGold Philippines IPO – Updated Thoughts on Valuation – Too Expensive Even at This Price
- OceanaGold Philippines (OGP PM) is looking to raise up to US$106m in its Philippines IPO.
- OceanaGold Philippines (OGPI) is a producer of gold and copper in the Philippines, and a subsidiary of OceanaGold Corporation, a Toronto Stock Exchange (TSX) listed gold mining and exploration company.
- In our previous note, we talked about the company’s historical performance and shared our quick thoughts on valuation. In this note, we share our updated thoughts on valuation.
Morning Views Asia: China Hongqiao
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.
Indika Energy – Event Flash – Launches Tender Offer And 5NC2 Notes Offering – Lucror Analytics
Indika Energy has launched a tender offer for its USD 8.25% 2025 notes, with USD 534 mn outstanding. For each USD 1,000 in principal, the tender consideration is USD 962.5 and early tender consideration is USD 50, leading to a total consideration of USD 1,012.5. Indika is concurrently launching a USD 144A/RegS offering. Holders of the 8.25% ’25s may request to receive priority allocation on the new notes.
We view initial price talk of 8.875% as attractive, given the company’s robust credit profile and improving debt maturity profile.
Southwestern Energy Company: These Are The 4 Pivotal Factors Influencing Its Growth!
- Southwestern Energy’s third quarter 2023 earnings reflected a mixed but overall optimistic outlook for the company’s financial and operational performance.
- On the positive side, the company has demonstrated consistent progress in optimizing free cash flow generation and capital investment, a trend that the company expects to maintain.
- An improving macro environment, driven primarily by growing liquefied natural gas (LNG) demand, further enhances this outlook.
Weatherford International plc: Initiation Of Coverage – Does It Have A Sustainable Economic Moat? – Major Drivers
- Weatherford International reported an exceptional year in 2023 with a revenue growth of 19%, adjusted EBITDA margins expanding 423 basis points to 23.1% and adjusted free cash flow of $651 million.
- The growth was noted across all segments, particularly with DRE and WCC seeing high teens growth due to increased drilling and completions activity.
- The company has achieved significant growth in international markets and even managed to grow margins in North America despite a decline in revenue, indicating an effective change in the operating culture.
International Paper/DS Smith: Spread
- Following the withdrawal of Mondi PLC (MNDI LN) from the contest to acquire DS Smith PLC (SMDS LN), the gross spread to the deal turned negative (from >10%).
- At the median 7.07x EV/Fwd NTM EBITDA (within the range of former transactions), the implied equity value of DS Smith would be 388.4p. (vs. an IBES consensus TP of 395p).
- IP is giving away most of the synergies. Spread is 1.91%/2.86% (gross, annualized assuming settlement by Y/E). I would wait for the spread to widen, before setting it up.
NOV Inc: How Are They Adapting Their Business Strategy To Cater To The Increasing Demand?
- National Oilwell Varco (NOV) reported a solid fourth quarter of 2023, with revenues up 7% sequentially to $2.3 billion.
- This growth was driven by strong offshore and international demands and a continued improvement in the supply chain.
- However, the company identified several challenges in its performance, including a 5% sequential decline in North American land revenues and an unexpected $20 million impact on EBITDA due to the devaluation of the Argentine peso.
Panoro Energy ASA (OSE: PEN): Drilling to restart in EG in June. 70% 2P reserve replacement ratio in 2023
- A drilling contract has been awarded for the Noble Venturer drill ship to recommence infill drilling at the Ceiba Field and Okume Complex in June.
- Owing to limitations arising from the shallower water depth at one of the planned infill well locations, the drilling campaign will now comprise of two infill wells.
- The third infill well will be deferred as part of a potential future drilling campaign.
The Chemours Company: Initiation Of Coverage – A Deep Dive Analysis Of Its Seemingly Robust Financial Situation – Major Drivers
- The Chemours Company’s fourth quarter and year-end 2023 earnings revealed a mixed bag of results, reflecting both the challenges and potential for the company.
- On one side, the company faced various hurdles including softness in economically sensitive end markets, higher input costs, and extended outage at one of the manufacturing sites.
- Despite these headwinds, Chemours still demonstrated strong areas of growth and several promising developments, emphasizing the resilience and potential the company has.