In today’s briefing:
- ASEAN EV Ecosystem Update: Initiatives to Build a Regional EV Ecosystem Continues
- Precious Perspectives Part 1: China’s Silver Scarcity Pushes Silver Higher
- Sidara/John Wood: 4th Proposal at 230p
- Brookside Energy (BRK) – Thursday, Mar 7, 2024
- Criterium Energy Ltd (TSX-V: CEQ): Re-iterating production guidance
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ASEAN EV Ecosystem Update: Initiatives to Build a Regional EV Ecosystem Continues
- Countries across the ASEAN region continue to invest on developing their respective EV markets with governments introducing new initiatives and offering further incentives.
- The price war among Chinese EV players has escalated in recent month, causing pressure on non-Chinese players. European and Japanese EV makers are increasingly looking at ASEAN for cost advantage.
- The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.
Precious Perspectives Part 1: China’s Silver Scarcity Pushes Silver Higher
- SHFE silver premium over COMEX silver has escalated to 7%, exacerbated by falling SHFE silver inventories, indicating a deepening shortage in China.
- Surging demand from China’s rapidly growing solar industry and renewable data centers is deepening the global silver deficit, now projected to continue at record levels for a fourth year.
- The strong bullish outlook for silver suggests that the bullishness in silver prices is likely to continue in the near-term.
Sidara/John Wood: 4th Proposal at 230p
- Sidara has submitted a fourth and final 230p/share cash proposal. Wood’s Board has changed tack and will grant due diligence. PUSU has been extended to 3 July.
- This proposal represents 39.4% premium, implied equity value of £1,591 million ($2,033 million) and implied EV of £2,983 million ($3,122 million), and (still good value) 6.4x EV/NTM Fwd EBITDA.
- The market is cautious (gross spread 12.5%). There’s potential for a “best & final” firm offer. However, if Sidara withdraws a significant sell-off in Wood’s shares is expected.
Brookside Energy (BRK) – Thursday, Mar 7, 2024
- Long Brookside Energy offers high-quality assets at a significant discount to its net present value and reserves value
- Investors are essentially getting 5,000 acres, 1,400 barrels of production, and 12 million barrels of reserves in the South SCOOP play in Oklahoma for a bargain
- Management is actively buying back shares to take advantage of the undervaluation, with plans for more buybacks in the future
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Criterium Energy Ltd (TSX-V: CEQ): Re-iterating production guidance
- 1Q24 production was 802 bbl/d with average realized price of US$82/bbl. This is in line with our expectations.
- Operating netbacks for the period stood at C$2.2 mm, also in line with our expectations
- Operating cashflow before changes in working capital was (C$0.37 mm).