Daily Brief Energy/Materials: Nippon Paint Holdings, Copper, Wheaton Precious Metals Corp and more

• This is the First of a series of reports on Nippon Paint Holdings (4612 JP) and in this insight, we deep dive into the company’s Japanese business.
• The automotive coating biz in Japan is heavily reliant on the domestic automotive market while decorative paints is facing challenges due to slowdown in population in the country.
• The outlook for Japan biz remains stagnant with growth rates slowing down and margins on a downward trend.

• Welcome to the final series of our “Business Cycle Week”, where we cover how a possible rebound in manufacturing might affect asset markets, and if markets are already starting to position for it.
• Commodities is the only asset class we need to tick off, and what a way to end the business cycle week with the most cyclical asset of them all, looking to benefit the most from a rebound in manufacturing.
• Commodities have had a rough 2022 (and start of 2023) as USD strength and a lack of Chinese demand have held commodities prices down, despite the scarcity that characterizes the market currently.

Ahead of Wheaton Precious Metals’ (WPM’s) Q223 results, scheduled for 10 August, we have honed our forecasts to reflect, principally (1) Newmont’s suspension of mining at Penasquito since 8 June, (2) updated metals prices, (3) estimated production from Salobo in the light of Vale’s Q223 production and sales report (released on 18 July) and (4) the closure of the Minto mine on 13 May. As a result, we have reduced our Q223 basic EPS forecast by 5 US cents per share to 28 cents per share and our FY23 adjusted basic EPS by 8 cents per share (or 6.1%) to 124 cents per share.