Daily Brief Energy/Materials: Ecopro Co Ltd, Newcrest Mining, PT Trimegah Bangun Persada Tbk (Harita Nickel), Solus Advanced Materials, Indo Tambangraya Megah, Anton Oilfield, Alkane Resources and more

• Ecopro (086520 KS) is up an eye-watering 590% in the past three months, primarily on Ecopro BM (247540 KS)‘s outperformance, together with sentiment towards soon-to-be-listed 52.8% held Ecopro Materials. 
• Preceding my comments on Ecopro are the weekly setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Under the revised proposal, Newmont (NEM US) has bumped the all-scrip terms for Newcrest Mining (NCM AU) to 0.400 Newmont shares – from 0.380 – for each Newcrest share held. 
• Including a permissible franked special dividend of up to US$1.10/share, the revised proposal represents an implied value of A$32.87/share. Newmont indicated the revised bid represents its best and final price.
• Newcrest has granted Newmont confirmatory due diligence to put forward a binding proposal.

• Newcrest Mining (NCM AU) disclosed a revised non-binding indicative privatisation proposal from Newmont Mining (NEM US) at 0.400 Newmont shares per Newcrest share + US$1.10 special dividend. 
• Since the 6 February announcement, the average implied value of the revised offer is A$29.14 per share, which is 11.6% higher than the average of the previous offer of A$26.12.
• The offer is attractive in terms of historical prices and VWAP ratios but carries the volatility risk around Newmont shares and FX rates. Expect a binding proposal. 

• PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) priced its IPO at IDR1,250 per share to raise gross proceeds of US$660 million. The shares will start trading tomorrow.
• We previously discussed the IPO in Harita Nickel IPO: The Bull Case, Harita Nickel IPO: The Bear Case and Harita Nickel IPO: Valuation Insights.  
• Peers have re-rated and the IPO price continues to imply a discount to the median peer CY2023 P/E multiple. Therefore, the IPO price remains attractive.

• PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) raised around US$660m in its Indonesian IPO.
• PT Trimegah Bangun Persada Tbk (Harita Nickel, HN) is a vertically integrated pure-play nickel company operating on Obi Island, Indonesia.
• In this note, we will talk about the trading dynamics and valuation.

• We believe the following three catalysts will likely drive share price of Solus Advanced Materials’ continued outperformance relative to the market this year. 
• They include the sale of Solus Biotech, improved control of its operating costs, and rapid increase in capacity for copper foil.
• The company has already secured strong order backlog from customers including LG Energy Solution, Tesla Motors, and SK On.

• ITMG went ex-dividend yesterday, paying out a whopping 16.8% (6416 Rph/share) final dividend in addition to the interim dividend of 10.8% (4128 Rph/share), bringing the FY22 yield to >27%.
• After payment of the 474 mn USD final dividend and 223 mn USD tax liability, we estimate the company will have >1.0 bn USD net cash (~33% mkt cap). 
• At current coal prices (NEX 190 USD/ton), the Indonesian coal producer trades on a 20% dividend yield for FY23 assuming a 65% dividend payout ratio (in line with historical payout).

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.

• Anton Oilfield
• Greentown China
• Sino-Ocean Service

Since our outlook note published on 7 July 2022, Alkane has made several important announcements. Firstly, it improved its FY23 production guidance to 62,000–70,000oz (a 17% increase) after impressive H123 production at Tomingley and now expects to reach the upper end of this range. This has resulted in our EPS forecast for FY23 increasing by 30.6% from A$0.0445/share to A$0.0582/share. This was followed by the approval of the Tomingley Gold Extension Project, permitting open-cut mining at the Roswell and San Antonio deposits (including underground mining at the former), extending the mine life at Tomingley to at least 2031. Additionally, Alkane announced an inferred mineral resource at Kaiser of 4.7Moz AuE (0.48Mt Cu, 2.05Moz Au). Finally, it reported Q323 gold production of 16,641oz, bringing the current year to date production figure to 54,431oz.