Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>
Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.</li>
<li>
Highlights: In Australia, currently nine pair trade opportunities persist across six sectors.</li>
<li>
Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.</li>
</ul>



Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.

Highlights: In Australia, currently nine pair trade opportunities persist across six sectors.

Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.


Relative Value Opportunities in Australia (15 June 2026)

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

<ul>
<li>FY26 revenue rose 10% YoY to C$1.77bn; net income +19% to C$169M, driven by record 15.0Mt sales volume and partial DRPF commissioning uplift.</li>
<li>FY26 EBITDA margin contracted 90bp to 28.2%; C1 cash-cost of C$78.5/dmt reflects higher fuel costs. 90% percentile of the cost curve has seen costs surge 28% YoY to 83 USD/ton.</li>
<li>At current prices, CIA trades at an FY27e P/E of 10.8x/EV/EBITDA of 5.2x. The change in dividend policy to reflect a more conservative stance has led to a sharp derating.</li>
</ul>


FY26 revenue rose 10% YoY to C$1.77bn; net income +19% to C$169M, driven by record 15.0Mt sales volume and partial DRPF commissioning uplift.
FY26 EBITDA margin contracted 90bp to 28.2%; C1 cash-cost of C$78.5/dmt reflects higher fuel costs. 90% percentile of the cost curve has seen costs surge 28% YoY to 83 USD/ton.
At current prices, CIA trades at an FY27e P/E of 10.8x/EV/EBITDA of 5.2x. The change in dividend policy to reflect a more conservative stance has led to a sharp derating.


Champion Iron (CIA AU) Q4FY26: Gone Into Cash Preservation Mode

<ul>
<li>
<a href="https://www.smartkarma.com/entities/champion-iron-ltd" target="_blank" data-smartkarma-citation="entities:19734:1" rel="noopener">Champion Iron (CIA AU)</a>'s acquisition of Rana Gruber at 5.3x EV-EBITDA (vs. the company trading at 5.9x EV-EBITDA) is expected to be accretive and open up sales opportunities in Europe.</li>
<li>Champion Iron's Direct Reduction Pellet Feed (DRPF) project at Bloom Lake has commenced initial commissioning on Jan 28th 2026. We expect it to boost earnings in FY27.</li>
<li>The stock trades at 13.3x FY26e and 5.9x EV-EBITDA, but we will monitor the uplift in earnings post these two catalysts for this iron ore stock. </li>
</ul>



Champion Iron (CIA AU)'s acquisition of Rana Gruber at 5.3x EV-EBITDA (vs. the company trading at 5.9x EV-EBITDA) is expected to be accretive and open up sales opportunities in Europe.
Champion Iron's Direct Reduction Pellet Feed (DRPF) project at Bloom Lake has commenced initial commissioning on Jan 28th 2026. We expect it to boost earnings in FY27.
The stock trades at 13.3x FY26e and 5.9x EV-EBITDA, but we will monitor the uplift in earnings post these two catalysts for this iron ore stock. 


Champion Iron (CIA CN): Rana Gruber Acquisition and DRPF To Drive Earnings Uplift

<ul>
<li>It is hard to get constructive on iron ore due to poor lending data in China, with August TSF down 38% YoY, negative mill margins, and expectations of increased supply.</li>
<li>We believe, though, that we are now bumping up against the higher end of the cost curve as iron ore prices have drifted down to 90-91 USD/ton. </li>
<li>While we see a small bounce in prices, we find it hard to be positive on equities, as elevated diesel and shipping costs are causing a margin squeeze.</li>
</ul>


It is hard to get constructive on iron ore due to poor lending data in China, with August TSF down 38% YoY, negative mill margins, and expectations of increased supply.
We believe, though, that we are now bumping up against the higher end of the cost curve as iron ore prices have drifted down to 90-91 USD/ton. 
While we see a small bounce in prices, we find it hard to be positive on equities, as elevated diesel and shipping costs are causing a margin squeeze.


Iron Ore Prices: Small Bounce From 90 USD/Ton, Cost Pressures Still Negative For Equities

<ul>
<li>
Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.</li>
<li>
Highlights: Currently eleven pair trade opportunities persist across five markets and five sectors.</li>
<li>
Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.</li>
</ul>



Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.

Highlights: Currently eleven pair trade opportunities persist across five markets and five sectors.

Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.


Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (23 Mar 2026)

Australia

champion Iron Limited is a exploration company. The Company acquires, explores and develops properties for iron ore deposits.

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Champion Iron (CIA AU)

Relative Value Opportunities in Australia (15 June 2026)

Discover nine pair trade opportunities across six sectors using statistical mean-reversion methodology for actionable insights.

Gaudenz Schneider