In today’s briefing:
- Whitehaven Coal: Production Guide Down, Solid Support From Buybacks, 80% Annualized OCF Yield in Q3!
- Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023
- PetroChina Co Ltd (857 HK) – 5.28 Target Achieved (+13%) In 8 Trading Days
- Rio Tinto: Expansion Plans
- Vale SA.: Cost Reduction
Whitehaven Coal: Production Guide Down, Solid Support From Buybacks, 80% Annualized OCF Yield in Q3!
- Whitehaven Coal (WHC AU) guided down production in an update released yesterday by 5-10% from a range of 19-20 mnt to 18-19 mnt for FY23.
- Net cash increased 300 mn AUD QoQ from 2.5 bn to 2.7 bn AUD representing 44% of market capitalization with 1.2 bn AUD of operating cash flow alone in Q3!
- We agree an OCF yield of 80% (1.2 bn*4 qtrs on a six bn mkt cap) is unsustainable; the capital allocation possible on this name is mind-boggling.
Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023
- In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023.
- Of the 38 pair trades, 21 of them involved holdcos outperforming opcos YTD and 17 of them involved opcos outperforming holdcos in the same period.
- We highlight 38 pair trades that involve Korean holdcos and opcos.
PetroChina Co Ltd (857 HK) – 5.28 Target Achieved (+13%) In 8 Trading Days
- At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
- On 31 March 2023 we published a bullish recommendation in PetroChina Co Ltd (857 HK), targeting an initial 13% upswing from 4.68 to 5.28. Longer term scope identified to 6.50/6.80.
- Initial target at 5.28 (+13%) was achieved on 17 April 2023 (8 trading days). We continue to highlight strong evidence of LT bullish trend change targeting 6.50/6.80 (+40%) multi-quarter.
Rio Tinto: Expansion Plans
- Rio Tinto’s business remained resilient in the last quarter and the company successfully entered the year with quite a good operational momentum, particularly in Pilbara iron ore.
- However, accelerating cost inflation and lower prices throughout the year led to margin compression.
- At Simandou, Rio Tinto incorporated the infrastructure joint venture with its various partners and the government of Guinea.
Vale SA.: Cost Reduction
- Vale SA delivered an all-around beat in its last results with a strong performance in iron ore solutions and a strong price realization.
- Also, in Vale’s energy transition material business, the nickel production was steady, with production and sales up, driven by the excellent performance of its Sudbury mines which successfully delivered very high production rates.
- Vale is developing a first-of-its-kind plant in North America and Canada to produce nickel sulphate from low-carbon nickel from Canadian refineries.
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