Daily Brief Energy/Materials: PT Trimegah Bangun Persada Tbk (Harita Nickel), Essential Metals, ABM Investama, APERAM SA, Vulcan Materials Co, Meta Materials and more

• PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ), an Indonesian nickel play, has launched an IDX IPO to raise US$1 billion. Book building ends on 24 March.
• In Harita Nickel IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The key elements of the bear case rest on weakening market sentiment, high single customer dependence, gross margin pressure, high cash burn, rising cash collection cycle and deteriorating cash conversion.

• The IE considers Tianqi Lithium (9696 HK)/IGO Ltd (IGO AU) JV’s A$0.50 offer for Essential Metals (ESS AU) to be fair and reasonable as it is higher than its A$0.283-0.468 valuation. 
• Odey, the recent substantial shareholder, hoped for a competing proposal which has not materialised. On 10 March, Odey sold down 21% of its holding at A$0.48 per share.
• Barring an unlikely competing proposal, this is done. At the last close price and for the 5 May payment, the gross and annualised spread is 3.1% and 28.4%, respectively.

• Back on the 9th Jan, small lithium player Essential Metals (ESS AU) entered into a Scheme with Tianqi Lithium JV, comprising Tianqi (9696 HK) (51%) and IGO (IGO AU) (49%). 
• The Scheme Booklet is now out, with a Scheme Meeting tabled for the 20 April. The Independent Expert reckons the Scheme Consideration is fair. FIRB is no longer required. 
• This is done and has traded tight from the onset.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess ABM Investama’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• This is our first report on Vulcan Materials Company, a renowned producer, distributor, and seller of construction materials.
• Vulcan’s last quarter was a major disappointment as it failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
• We initiate coverage on the stock of Vulcan Materials Company with a ‘Hold’ rating.

• META announced a Joint Development Agreement (JDA) with a confidential global battery OEM for its NPORE® battery separator materials. 
• The company is partnering with a top 10 battery OEM to jointly develop and adapt NPORE as a battery separator solution.
• Details were limited given the confidential nature of the JDA, but we will look for updates on the upcoming 4Q earnings call.

• PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) is looking to raise about US$650m in its Indonesian IPO.
• PT Trimegah Bangun Persada Tbk (Harita Nickel, HN) is a vertically integrated pure-play nickel company operating on Obi Island, Indonesia.
• In this note, we will look at our earnings assumptions, and share our thoughts on valuation.