Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

First Quantum Minerals / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/first-quantum-minerals-ltd" target="_blank" data-smartkarma-citation="entities:25362:1" rel="noopener">First Quantum Minerals (FM CN)</a> is a play on African mining assets for copper/zinc with an optionality of resumption of the Cobre Panama mine that could double the share price. </li>
<li>We should not assign a high probability to the asset's resumption and view it as a long-duration, very out-of-the-money call option.</li>
<li>The company trades at an EV-EBITDA of 9.8x, which is more expensive than some of its peers. However, Cobre Panama's optionality makes it attractive.</li>
</ul>



First Quantum Minerals (FM CN) is a play on African mining assets for copper/zinc with an optionality of resumption of the Cobre Panama mine that could double the share price. 
We should not assign a high probability to the asset's resumption and view it as a long-duration, very out-of-the-money call option.
The company trades at an EV-EBITDA of 9.8x, which is more expensive than some of its peers. However, Cobre Panama's optionality makes it attractive.


First Quantum Minerals (FM CN): Call Option on Cobre Panama?

<ul>
<li>In the countdown to the <a href="https://www.scmp.com/business/china-business/article/3289527/investors-search-fresh-china-stimulus-signs-ahead-xi-jinpings-economic-conference" target="_blank" rel="noopener">China Economic Work Conference (CEWC)</a>, which will be held on December 11th/12th, the copper market remains range-bound, expecting further clarity on the economic stimulus.</li>
<li>The market has looked through the PMI uptick due to the seasonal uplift and order inflows in anticipation of Trump tariffs, although equities seem a little more positive. </li>
<li>We prefer <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> in the copper space for its high ROIC and future growth. Check out our recent initiation, <a href="https://www.smartkarma.com/insights/lundin-mining-lun-cn-cheap-play-on-copper" target="_blank" data-smartkarma-citation="insights:168213" rel="noopener">Lundin Mining (LUN CN): Cheap Play on Copper.</a> </li>
</ul>


In the countdown to the China Economic Work Conference (CEWC), which will be held on December 11th/12th, the copper market remains range-bound, expecting further clarity on the economic stimulus.
The market has looked through the PMI uptick due to the seasonal uplift and order inflows in anticipation of Trump tariffs, although equities seem a little more positive. 
We prefer Southern Copper (SCCO US) in the copper space for its high ROIC and future growth. Check out our recent initiation, Lundin Mining (LUN CN): Cheap Play on Copper. 


Copper Tracker 9th Dec 2024: All Eyes On the China Economic Work Conference (CEWC)

<ul>
<li>As part of our series of initiations on copper stocks, <a href="https://www.smartkarma.com/entities/lundin-mining-corp-92352503-3781-4fcb-a4db-62e6f6343783" target="_blank" data-smartkarma-citation="entities:25356:1" rel="noopener">Lundin Mining (LUN CN)</a> is another play with a cheaper multiple than <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> but an inferior ROCE.</li>
<li>With its most recent acquisition of the Jose Maria copper project in a 50:50 JV with BHP, the mid-size copper-producing company is on its way to growth after 2027.</li>
<li>Trading at 17x FY25e and 5.0x EV-EBITDA, this is another company in our stable worth exploring. </li>
</ul>


As part of our series of initiations on copper stocks, Lundin Mining (LUN CN) is another play with a cheaper multiple than Southern Copper (SCCO US) but an inferior ROCE.
With its most recent acquisition of the Jose Maria copper project in a 50:50 JV with BHP, the mid-size copper-producing company is on its way to growth after 2027.
Trading at 17x FY25e and 5.0x EV-EBITDA, this is another company in our stable worth exploring. 


Lundin Mining (LUN CN): Cheap Play on Copper

<ul>
<li>Disappointing September/October China lending data with TSF down 9%/24% YoY to 3.7/1.4 trillion RMB Vs. (analysts expectations of 4/1.5 trillion RMB) has led to skepticism about China's recovery story.</li>
<li>Copper prices have dropped below 9000 USD/ton and stayed there despite the fall of exchange inventories. </li>
<li>We like the LT copper story and see long-term benefits for stocks like <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" rel="noopener">Southern Copper (SCCO US)</a>, <a href="https://www.smartkarma.com/entities/ivanhoe-mines-ltd" target="_blank" rel="noopener">Ivanhoe Mines (IVN CN)</a>, and <a href="https://www.smartkarma.com/entities/teck-resources-ltd-36dbdad5-1430-4d7a-8578-31bc50086f72" target="_blank" rel="noopener">Teck Resources (TECK US)</a>. </li>
</ul>


Disappointing September/October China lending data with TSF down 9%/24% YoY to 3.7/1.4 trillion RMB Vs. (analysts expectations of 4/1.5 trillion RMB) has led to skepticism about China's recovery story.
Copper prices have dropped below 9000 USD/ton and stayed there despite the fall of exchange inventories. 
We like the LT copper story and see long-term benefits for stocks like Southern Copper (SCCO US), Ivanhoe Mines (IVN CN), and Teck Resources (TECK US). 


Copper Tracker 25th November 2024: TSF Disappoints, What Next?

<ul>
<li>The Ministry of Finance has decided to end the 13% export tax rebate on copper effective December 1st, 2024. Copper semi-producers rely on this rebate to remain profitable. </li>
<li>Copper semi-producers might rush to sell their inventory by 1st December when changes take effect, which may affect prices and distort differentials on the SHFE-LME. </li>
<li>As long-term bulls, we like <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" rel="noopener">Southern Copper (SCCO US)</a>; under 100 USD/share, it is worth exploring. We also believe a long LME short SHFE trade in the short-term could work.  </li>
</ul>


The Ministry of Finance has decided to end the 13% export tax rebate on copper effective December 1st, 2024. Copper semi-producers rely on this rebate to remain profitable. 
Copper semi-producers might rush to sell their inventory by 1st December when changes take effect, which may affect prices and distort differentials on the SHFE-LME. 
As long-term bulls, we like Southern Copper (SCCO US); under 100 USD/share, it is worth exploring. We also believe a long LME short SHFE trade in the short-term could work.  


Copper Tracker Nov 18th, 2024: Export Tax Rebate Cancellation on Copper Throws Market in A Tizzy

United Kingdom

Antofagasta plc owns and operates copper mines in Chile and conducts exploration activities in Chile and Peru.  The Group also operates a rail network servicing the mining region of northern Chile, as well as operates a concession for the distribution of water in this region.

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Antofagasta PLC (ANTO LN)

First Quantum Minerals (FM CN): Call Option on Cobre Panama?

We initiate First Quantum Minerals (FM CN), a Canadian copper miner with assets in Zambia/Panama. We analyze the bull-bear spread and risk to the...

Sameer Taneja

Copper Tracker 9th Dec 2024: All Eyes On the China Economic Work Conference (CEWC)

The copper market remains range-bound in the countdown to the China Economic Work Conference (CEWC), which will be held on December 11th/12th. How...

Sameer Taneja

Lundin Mining (LUN CN): Cheap Play on Copper

We compare Lundin Mining with its peers among the pure copper/base metals miners. Lundin mining has a rich portfolio of long-life copper mines in...

Sameer Taneja

Copper Tracker 25th November 2024: TSF Disappoints, What Next?

We analyze China lending (TSF), a forward indicator for copper demand. There has been no pick up in lending yet in China, which has resulted in the...

Sameer Taneja

Copper Tracker Nov 18th, 2024: Export Tax Rebate Cancellation on Copper Throws Market in A Tizzy

We analyze the impact of China's recent 13% export duty rebate cancellation on copper and the valuations of our favorite copper picks after the...

Sameer Taneja

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