Daily Brief Energy/Materials: Sumitomo Chemical, EcoPro Materials, Shin Etsu Chemical, GCC SAB de CV, West China Cement, Panoro Energy ASA, OCI NV, Orezone Gold , Cleveland-Cliffs Inc , Rent.com.au Ltd and more

• Sumitomo issued new guidance for the year to 3/25 that was 40% higher than consensus estimates, but the stock cratered almost 5%.
• We were able to think of at least 6 explanations for this odd reaction – all of them irrational.  
• A reasonable person listening to the call should have been pleased by almost all that was new information. 

• We discuss the end of the mandatory lock-up periods for 54 stocks in Korea in May 2024, among which 4 are in KOSPI and 50 are in KOSDAQ.
• These 54 stocks on average could be subject to further selling pressures in May and could underperform relative to the market.
• The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in May include EcoPro Materials, Enchem, and Gaonchips. 

• On April 24, Shin-Etsu (4063) posted its fifth consecutive OP decline and guided for a sixth, but the stock has outperformed Topix by 22% in the past 12 months. 
• OP for the year ended March 2024 was JPY141.5bn, vs. consensus estimates of JPY168.9bn. This was the fifth consecutive miss, and the fourth of more than 10%. 
• The Chinese economy is killing the company’s core core Polyvinyl Chloride Resins business and seemingly interminable inventory issues are holding back a recovery in the semiconductor materials business. 

• GCC (Outperform): posted positive results, which are above our estimates.
• Higher prices in cement and ready-mix supported solid results.
• Consolidated EBITDA increased +32% YoY, while the EBITDA margin reached 30.4% (+4.6 pp. YoY).

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Nickel Industries
• West China Cement

• Positive update in Gabon. 1Q24 gross production was 24,840 boe/d increasing to 29,800 boe/d to date in 2Q24 (Panoro WI: 17.5%).
• The increasing production reflects the first Hibiscus South well coming on stream in March and encouraging production performance from two wells on ESP at Hibiscus.
• A third Hibiscus well continues to produce on natural flow at high rate.

• OCI N.V. is selling off assets to focus on a more streamlined operation and benefit from energy transition trends
• The sale of OCI’s stake in Fertiglobe to ADNOC for $3.62 billion was a result of pressure from Inclusive Capital, led by Jeffrey Uben
• The company will have a strong net cash position and is positioned to capitalize on future opportunities at a low multiple of normalized EBITDA

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Orezone owns a 90% stake in the Bomboré Gold Mine in Burkina Faso which is already in production and generating cash
• The mine faced challenges in 2023 but saw improvements in ore processing and gold production in Q4
• Completion of the Bomboré powerline project has reduced costs, presenting an attractive opportunity for investors in the growing gold sector in West Africa

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Cleveland-Cliffs Inc in their Q1 2024 Earnings has placed particular emphasize on their tactic of share buybacks as an essential capital allocation method.
• During this time period, the firm was able to procure over 30 million of its own shares, utilizing approximately $608 million from a previous $1 billion share buyback program announced in 2022.
• Over the past few years, the company’s diluted share count has been lowered by over 100 million shares, reflecting a significant 17% reduction and pointing to an average purchase price of $18.79 per share, a price point considerably lower than the current trading price.

• Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
• The company has reported its best ever quarterly revenue result with total revenue increasing 41% on the previous corresponding period (pcp) to $0.89m.
• The result was driven by a 25% year-on-year improvement in search portal revenue and a 144% increase in RentPay revenue.