In today’s briefing:
- Yankuang Energy – Tear Sheet – Lucror Analytics
- Wheaton Precious Metals – Peerless
- 10 in 10 with RH Petrogas – Embarking on transformation through oil and gas
- Exxon Mobil Corporation: The Denbury Acquisition & Other Major Drivers
- The Williams Companies Inc.: Does It Have A Sustainable Competitive Advantage? – Key Drivers
- TotalEnergies SE: Acquisition of Total Eren & Other Developments
- Ionic Rare Earths Ltd (IXR) Core Investment Case UPDATE 15082023
- Pan American Silver – Refining estimates post Q2 results
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Yankuang Energy – Tear Sheet – Lucror Analytics
We view Yankuang as “Low Risk” on the LARA scale. This reflects: [1] the company’s huge scale (producing over 100 mn tons a year) and status as the second-largest producer in the Chinese coal sector; and [2] that it is majority owned by, and has strategic importance to, the Shandong government. These translate to strong access to onshore capital. Our assessment also takes into account Yankuang’s: [1] earnings being dependent on coal price fluctuations; [2] improving financial profile; [3] exposure to adverse movements of the USD against the CNY; and [4] track record of operation.
Our fundamental Credit Bias on Yankuang is “Positive”, due to: [1] the company’s enhanced SOE status following the completion of the Yanzhou Coal/Shandong Energy merger; and [2] supportive coal prices.
Controversies are “Immaterial”, but the ESG Impact on Credit is “Moderately Negative”. The coal mining industry in China is exposed to regulatory and geopolitical risks, such as forced closures of inefficient mines. The industry also faces extreme scrutiny from environmental agencies, given its negative impact on the environment.
Wheaton Precious Metals – Peerless
Wheaton’s Q223 results exceeded our expectations. Production of gold equivalent ounces (GEOs) was 4.6% higher than our prior forecasts, while sales of GEOs were 6.9% higher, driving a positive variance in revenue of 6.6%, or US$16.4m. This was partially offset by costs but nevertheless resulted in a US$7.8m (or 5.4%) positive variance in earnings from operations that, to all intents and purposes, dropped through to the bottom line.
10 in 10 with RH Petrogas – Embarking on transformation through oil and gas
Exxon Mobil Corporation: The Denbury Acquisition & Other Major Drivers
- Exxon Mobil delivered a mixed result in the recent quarter, with revenues above market expectations but failed to surpass the analyst consensus regarding earnings.
- The company reported nearly $8 billion in earnings, twice the amount earned in the same quarter three years ago under comparable industry conditions.
- Exxon Mobil also achieved significant production rates in the Permian and Guyana regions, demonstrating progress in meeting global energy needs while reducing emissions.
The Williams Companies Inc.: Does It Have A Sustainable Competitive Advantage? – Key Drivers
- The Williams Companies delivered mixed results for the previous quarter, with revenues below the analyst consensus.
- Starting with adjusted, the company experienced another solid quarterly growth, which aligns with a 5-year CAGR of 8.6% for the same metric.
- The company’s adjusted EPS for the second quarter also increased, continuing the long history of robust EPS growth, with year-to-date EPS currently up by 23%.
TotalEnergies SE: Acquisition of Total Eren & Other Developments
- TotalEnergies’ results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
- The company produced a healthy cash flow during the second quarter.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Ionic Rare Earths Ltd (IXR) Core Investment Case UPDATE 15082023
- Ionic Tech begins REO recycled magnet production at Belfast facility;
- IXR’s flagshipMakuutu Rare Earths project is significant given its ionic adsorption clayhostedgeology
- In Sep22 IXR received a £1.72m grant from the UK government todevelop its demonstration magnet recycling plant in Belfast, UK.
Pan American Silver – Refining estimates post Q2 results
Pan American Silver (PAAS) reported its first quarterly results that include the assets acquired as part of the Yamana transaction, with Q2 revenues and adjusted EBITDA of US$640m and US$218m, an improved margin of 34%. Despite somewhat weaker than expected numbers, PAAS maintained its operational and cost guidance for FY23, which points to a visible improvement in performance in H2. Escobal continues to advance through the ILO 169 consultation process, with completion of Phase 2 expected by the authorities in October. We have updated our financial estimates and revised our valuation, which now stands at US$22.2 per share.