Daily Brief Energy/Materials: EcoPro Materials, Indo Tambangraya Megah, Occidental Petroleum, Wheaton Precious Metals Corp and more

• Ecopro Materials, an affiliate of Ecopro, is getting ready to complete its IPO in 2H 2023. Ecopro Co has a 52.8% stake in Ecopro Materials. 
• Ecopro Materials’ core products are lithium cell core materials called precursors, which are used as part of the rechargeable batteries. 
• The expected market value of Ecopro Materials is about 3 trillion won to 4 trillion won (US$2.3 billion to US$3.0 billion).

• Indo Tambangraya Megah (ITMG IJ) dividend yield at an assumed 150 USD/ton price in FY23e ( FY22 px: 192 USD/ton) is over 20% (FY22 yield 25-28%).  
• Investors staying over FY22/FY23e will get 45-48% of the share price returned in dividends assuming a 70% payout ratio, and the company’s cash pile will be >1.5 bn USD.
• Coal prices have been softer recently, but the recent mining incident threatens a slower rebound in coal production from China. The company looks cheap at 3-3.5x PE FY23e.

• Occidental Petroleum had a weak financial performance in the last quarter and failed to meet Wall Street expectations with respect to revenues as well as earnings.
• Storm effects in the Permian and Rockies were largely countered by superior performance in the Gulf of Mexico and the Al Hosn.
• While Midstream and marketing earnings were within projections, OxyChem’s performance exceeded expectations due to stronger-than-anticipated market dynamics.

On 21 February 2023, Wheaton Precious Metals (WPM) announced that it had produced and sold 286,985oz and 293,234oz gold, respectively, and 23,979koz and 21,570koz silver, respectively in FY22. Subject to any historical restatements in its FY22 financial results next week (possible but unlikely and very unlikely to be material), this implies that it produced and sold 66,025oz and 68,996oz gold and 5,353koz and 4,935koz silver, respectively, in Q4. In the case of gold, in particular, this was below our prior forecast (see Exhibit 1), but is consistent with the 14.7% quarter-on-quarter decline in copper production at Salobo announced by Vale on 31 January on account of ‘major maintenance’. This note updates our forecasts for Q422 and FY22 in the light of WPM’s actual production and sales numbers and for FY23 in the light of maiden, detailed guidance.