Director, Head of Research, Smartkarma

Pranav Rao

Director, Head of Research

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

Agricultural Bank of China / Event-Driven

<ul>
<li>Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ Insights published over the past two weeks on Smartkarma</li>
<li>In this cut, we explore A-H share trading dynamics, consider copper market dynamics and plays, and China's bottoming/stabilizing real estate market</li>
<li>Want to dig deeper? Comment or message with the themes you’d like to see highlighted next</li>
</ul>


Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ Insights published over the past two weeks on Smartkarma
In this cut, we explore A-H share trading dynamics, consider copper market dynamics and plays, and China's bottoming/stabilizing real estate market
Want to dig deeper? Comment or message with the themes you’d like to see highlighted next


Curator's Cut: Arbs Go A-H, Copper Plays & China's Property Pulse

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

<ul>
<li>COMEX spreads blew out to over 2,500 USD/ton (a ~25% premium) last night as President Trump announced a likelihood of a 50% import tariff on the metal. </li>
<li>We believe this move will deplete inventories further at the LME (to be shipped to the COMEX) and lead to a rally in copper prices on the LME as well.</li>
<li>Follow our prior insight, <a href="https://www.smartkarma.com/insights/copper-breaches-10k-usd-easy-journey-to-11k-usd-ton-on-lower-inventories-in-the-short-term" target="_blank" data-smartkarma-citation="insights:191702" rel="noopener">Copper Breaches 10k USD: Easy Journey to 11k USD/Ton On Lower Inventories In The Short Term</a> </li>
</ul>


COMEX spreads blew out to over 2,500 USD/ton (a ~25% premium) last night as President Trump announced a likelihood of a 50% import tariff on the metal. 
We believe this move will deplete inventories further at the LME (to be shipped to the COMEX) and lead to a rally in copper prices on the LME as well.
Follow our prior insight, Copper Breaches 10k USD: Easy Journey to 11k USD/Ton On Lower Inventories In The Short Term 


Trump 50% Import Tariff Could Send Copper Into Stratosphere Short-Term: LME Can Breach 11k USD/Ton

<ul>
<li>With China's slew of stimulus measures released last month, we are confident that copper prices will break 10,000 USD/ton soon. </li>
<li>The COMEX spread with LME has now started to build up to over 300 USD/ton, signaling that macro funds are getting bullish on copper.</li>
<li>We continue to like the equity route to play copper with pure plays like <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> , <a href="https://www.smartkarma.com/entities/ivanhoe-mines-ltd" target="_blank" data-smartkarma-citation="entities:25338:1" 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" data-smartkarma-citation="entities:33343:1" rel="noopener">Teck Resources (TECK US)</a>.</li>
</ul>


With China's slew of stimulus measures released last month, we are confident that copper prices will break 10,000 USD/ton soon. 
The COMEX spread with LME has now started to build up to over 300 USD/ton, signaling that macro funds are getting bullish on copper.
We continue to like the equity route to play copper with pure plays like Southern Copper (SCCO US) , Ivanhoe Mines (IVN CN), and Teck Resources (TECK US).


Copper Tracker Oct 7th, 2024: Copper Set to Pass 10,000 USD/Ton

<ul>
<li>
<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 equity space is the best way to play bullish copper long-term with its long-term (10-year) ROCE of &gt;22% </li>
<li>With low-cost production assets in Peru and Mexico, the company has managed EBITDA margins of&gt; 39% across the cycle (last 15 years) and averaging 50%.</li>
<li>A 100% payout results in a dividend yield of 3.5%. We believe there is a price for everything, and in the event of a 20% correction, it would be attractive.</li>
</ul>



Southern Copper (SCCO US) in the equity space is the best way to play bullish copper long-term with its long-term (10-year) ROCE of &gt;22% 
With low-cost production assets in Peru and Mexico, the company has managed EBITDA margins of&gt; 39% across the cycle (last 15 years) and averaging 50%.
A 100% payout results in a dividend yield of 3.5%. We believe there is a price for everything, and in the event of a 20% correction, it would be attractive.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The <a href="https://www.smartkarma.com/entities/mmg-ltd" target="_blank" data-smartkarma-citation="entities:13961:1" rel="noopener">MMG (1208 HK)</a> rights, designed to raise US$1.15bn to pay off loans to the parent for the purchase of a large copper asset, start trading 24 June 2024. </li>
<li>There is some risk up for grabs, and it is likely to trade according to standard Hong Kong Rights Trading Dynamics. Shorts are down somewhat, but covering should be expected. </li>
<li>There is path-dependency to the Rights Trading, and while they trade for 7 trading days through Tuesday next, one should expect the volume to trade this week. </li>
</ul>


The MMG (1208 HK) rights, designed to raise US$1.15bn to pay off loans to the parent for the purchase of a large copper asset, start trading 24 June 2024. 
There is some risk up for grabs, and it is likely to trade according to standard Hong Kong Rights Trading Dynamics. Shorts are down somewhat, but covering should be expected. 
There is path-dependency to the Rights Trading, and while they trade for 7 trading days through Tuesday next, one should expect the volume to trade this week. 


United Kingdom

Antofagasta plc is a Chilean multinational conglomerate primarily focused on copper mining, with operations concentrated in Chile. The company operates four copper mines, producing copper cathodes and concentrates, along with gold, silver, and molybdenum as by-products. Additionally, it has a transport division providing rail and road cargo services for mining customers in northern Chile. Antofagasta was incorporated in London in 1888 and is headquartered in London, England.

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Antofagasta (ANTO LN)

Curator's Cut: Arbs Go A-H, Copper Plays & China's Property Pulse

In this cut, we explore A-H share trading dynamics, consider copper market dynamics and plays, and China's bottoming/stabilizing real estate market.

Pranav Rao

Trump 50% Import Tariff Could Send Copper Into Stratosphere Short-Term: LME Can Breach 11k USD/Ton

With the Trump administration now leaning towards a 50% import tariff in the short term, copper prices on the LME have gained upward momentum. How...

Sameer Taneja

Copper Tracker Oct 7th, 2024: Copper Set to Pass 10,000 USD/Ton

With the slew of Chinese stimulus measures, we discuss how to play the copper price increasing beyond 10,000 USD/ton in the near-term.

Sameer Taneja

Southern Copper: In a League of Its Own

We initiate on Southern Copper (SCCO US), a high-quality copper play with assets in Peru and Mexico. Its long term ROCE >22% makes its a very...

Sameer Taneja

MMG (1208 HK) Rights Trading Dynamics

It is now time to buy the dip on MMG vs Peers. The liquidation selling of Rights should be done, and this stock is cheap vs assets and earnings...

Travis Lundy

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