Daily Brief Energy/Materials: Gold, Xinjiang Tianshan Cement A, Alumina Ltd, Kumiai Chemical Industry Co, Wheaton Precious Metals, Sinanen Holdings, Chariot Limited and more

• Gold price has rallied to new highs, but market cap of US’s biggest gold ETF has shrunk
• Push higher driven by quick money inflows, fundamental/ETF inflows, safe haven bid, technical drivers, FOMO
• Physical demand from central banks and Chinese retail buyers has been strong, but recent rally seems driven by financial quick money inflows

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• CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
• In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.
• There are some changes to the list of expected ADDs/DELs since I published my last insight on this roughly a month ago.

• On the 26 February, via an NBIO, Alcoa (AA US) offered 0.02854 of its own shares for each Alumina Ltd (AWC AU) share, a 13% premium to last close.
• Alcoa/Alumina control 60%/40% of the AWAC JV, an owner and operator of global bauxite mines and alumina refineries. Both companies have now entered into a Scheme on the same terms. 
• Alcoa holds 19.9% in AWC after reaching an agreement with Allan Gray Australia. The key risks to the deal are FIRB approval and how CITIC, holding 18.9%, will respond.

• China set a growth target of “around 5%” for 2024, according to the “Government Work Report” released Tuesday as part of the opening of the National People’s Congress annual meeting.

• Last year China’s economy grew by 5.2%, matching the official target of around 5%.

• China set a deficit-to-GDP ratio of 3% for the year, down from a rare upward revision to 3.8% late last year from the original 3%.

• Kumiai Chemical Industry Co (4996 JP) is an R&D-focused agrochemical manufacturing and marketing company with herbicides occupying a large portion of sales.
• Overall sales decreased as sales in the mainstay Agricultural Chemicals and Agriculture-Related Businesses fell YoY. Overseas sales accounted for 61.4％ of total sales.
• Operating profit decreased 49.3% YoY. Recurring profit fell 11.6% YoY, due mainly to a drop in earnings of affiliates under non-operating income, despite narrower foreign exchange losses.

On 20 February, Wheaton Precious Metals (WPM) announced that it had produced 14,615oz (15.2%) and sold 18,618oz (19.3%) more gold than our prior expectations for Q423, and produced 326koz (7.8%) and sold 530koz (20.0%) more silver. As a result, ahead of Q423/FY23 results scheduled for 14 March, we have increased our EPS forecast for Q423 by 25.3%, to close to the top of the range of market expectations for both the quarter and the full year.

• Sinanen Holdings (8132 JP) is one of Japan’s major fuel trading houses, ranking sixth by sales among the listed fuel trading companies as of FY03/23.
• In FY03/23, the company recorded sales of JPY342.3bn, operating profit of JPY895mn, recurring profit of JPY1.3bn, and net income attributable to owners of the parent of JPY478mn.
• Sinanen Holdings Co., Ltd. announced changes in its representative directors and a change of president.

• The feasibility study for the green hydrogen “Project Nour” has now been presented to the government of Mauritania.
• Chariot holds a 50% interest in the project and TotalEnergies is a partner.
• Mauritania benefits from an ideal geography for wind and solar energy.