Daily Brief Energy/Materials: EcoPro Materials, Pan American Silver, Westrock Co and more

• Ecopro Materials reduced the upper end of the IPO price range from 46,000 won to 44,000 won.
• The bankers reduced the IPO discount, EV/EBITDA valuation multiple, and outstanding shares. 
• We maintain our Bearish view of the Ecopro Materials IPO. Our base case valuation of 37,436 won per share is towards to lower end of the IPO price range. 

• EcoPro Materials (ECO123 KS) is a leading player in the electrode material industry. It is seeking to raise up to US$477 million in a KRX IPO.
• In EcoPro Materials IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on weakening sector market sentiment, margin pressure likely to persist, cash burn, elevated leverage and high related-party transactions.

Pan American Silver (PAAS) has announced that it will begin restarting operations at the La Colorada mine on 16 October. Operating activities at the project have temporarily been suspended since 5 October due to security concerns at the mine site following the concentrate robbery. The company does not expect any impact on the FY23 production and cost guidance from the suspension of production. We maintain our estimates and valuation.

• WestRock Company delivered a mixed result in the recent quarter, with revenues below market expectations but surpassing the analyst consensus regarding earnings.
• The company delivered outstanding results this quarter, surpassing expectations through effective execution, increased productivity, and managed input costs.
• Despite changing conditions in the global paper business, WestRock is leveraging its scale, diverse substrate portfolio, and strategic customer relationships.