Daily Brief Energy/Materials: Kumho Petro Chemical, Azure Minerals, Silver, Daiichi Kigenso Kagaku Kogyo, CNX Resources and more

• Kumho Petro Chemical (011780 KS) intends to retire 50% of its common shares, totaling 2,624,417 shares, starting from the 2024 fiscal year until the 2026 fiscal year.
• With the annual general meeting nearing, NPS hasn’t revealed its support, causing unease for Park Chan-gu. Considering NPS’s obligation to the Value-Up policy, cancellation seems inevitable for Park Chan-gu.
• Whether the battle persists hinges on NPS’s stance. If NPS backs Park Chan-gu, their stake surpassing 25% could deter the opposition’s financial strength. Conversely, NPS’s neutrality could escalate the battle.

• After the market close on 6 May, Kumho Petrochem announced a significant shares cancellation program which is likely to have a positive impact on its share price. 
• The company announced that it will cancel 430 billion won worth of its common shares in the next three years, representing nearly 10.5% of its market cap.
• Park Chul Wan, nephew of Kumho Petrochem Chairman Park Chan Koo, has been very vocal about the need for Kumho Petrochem to improve its corporate governance in past several years.

• The Azure Minerals (AZS AU) IE considers Sociedad Quimica y Minera de Chile (SQM US)/Hancock’s scheme and takeover offer fair and reasonable as it is above its A$2.03-2.93 valuation range. 
• The scheme is conditional on FIRB approval, which should be forthcoming as Azure’s key asset (Andover) will be majority-owned by Australian entities.
• The scheme vote will get up due to irrevocables and retail support. At the last close and for the 18 April payment, the gross/annualised spread was 3.1%/29.2%.

• Gold and Silver have remained unresponsive to lower rates, escalating geopolitical risks and higher China and India seasonal demand.
• Notably, early February saw the emergence of two contrarian signals that merited closer attention.
• While these signals are not foolproof market timing tools, they warrant attention when they align with technical support levels within an established consolidation pattern.

• Q1-3 FY3/24 results were in line with company guidance, reflecting the strategic importance for DKK to scale its new growth initiatives.
• Ongoing positive developments related to semiconductor, secondary battery, and biomaterial applications were offset by weakness in electronics and the mature profile of the core automotive catalyst business.
• Operating a business model that is externally driven (such as FX movements and raw materials market pricing), the company has disclosed ROIC targets that coincide with its current 10-year plan for FY3/32. 

• CNX is an ENP exploration and production business focusing on natural gas with a long history in the energy sector
• CNX evolved from a coal company to a natural gas producer under new management led by CEO Nick
• The current business model focuses on monetizing assets, separating coal business, and leveraging the productive Marcellus shale for low-cost advantage.

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