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>Iron ore continued to operate in its band from 95-130 USD/ton over the last few years, with a recent drop from 120 USD/ton to 105 USD/ton on tepid China data.</li>
<li>With incremental news on China's stimulus in the property and infrastructure sectors, we remain confident that iron ore will return to 120 USD/ton in the short term. </li>
<li>We also remain bullish on the 65-62 spread, which has expanded to the teens. <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a> and <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a>  are good plays on the spread.</li>
</ul>


Iron ore continued to operate in its band from 95-130 USD/ton over the last few years, with a recent drop from 120 USD/ton to 105 USD/ton on tepid China data.
With incremental news on China's stimulus in the property and infrastructure sectors, we remain confident that iron ore will return to 120 USD/ton in the short term. 
We also remain bullish on the 65-62 spread, which has expanded to the teens. Rio Tinto Ltd (RIO AU) and Vale (VALE US)  are good plays on the spread.


Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mount-gibson-iron-ltd" target="_blank" data-smartkarma-citation="entities:19043:1" rel="noopener">Mount Gibson Iron (MGX AU)</a> is a pure play on iron ore trading at 0.5x EV-EBITDA, with 77% of the market capitalization in cash in H1 FY24 (likely to grow).</li>
<li>The company is about to announce reinstating its dividend, and a 50% payout could result in a yield of 20% on the current share price. </li>
<li>The company's main catalyst is its earnings release in August, after which a board meeting will decide on future dividends (which it has already committed to shareholders). </li>
</ul>



Mount Gibson Iron (MGX AU) is a pure play on iron ore trading at 0.5x EV-EBITDA, with 77% of the market capitalization in cash in H1 FY24 (likely to grow).
The company is about to announce reinstating its dividend, and a 50% payout could result in a yield of 20% on the current share price. 
The company's main catalyst is its earnings release in August, after which a board meeting will decide on future dividends (which it has already committed to shareholders). 


Mount Gibson (MGX AU): Iron Ore Pure Play, 77% of the Mkt Cap in Cash, 0.5x EV-EBITDA With Catalysts

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

<ul>
<li>Welcome to Curator’s Cut — a fortnightly roundup of standout themes from the 1,500+ insights published on Smartkarma.</li>
<li>In this cut, we review CATL's H-share lock-up expiry, iron ore equity opportunities in the face of Simandou's expected supply, and the accelerating consolidation in Japan's consumer sector.</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 1,500+ insights published on Smartkarma.
In this cut, we review CATL's H-share lock-up expiry, iron ore equity opportunities in the face of Simandou's expected supply, and the accelerating consolidation in Japan's consumer sector.
Want to dig deeper? Comment or message with the themes you’d like to see highlighted next.


Curator's Cut: Powering Down CATL, Iron Ore Plays & Japan Consumer Consolidation

<ul>
<li>We analyse <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> after improvements in its operations in Q2FY26. The company destocked 477k tons and is down to 1.7 million tons to further reduce the stockpile.</li>
<li>The company also saw an improvement in its realized iron ore price (to 128 CAD/ton or 19% YoY) as it reduced its contractual arrangements for material. </li>
<li>Despite the improvement in operational performance, which will drive profitability up 52% YoY, the stock trades at 11.7x FY26 PE and is fairly valued. We prefer <a href="https://www.smartkarma.com/entities/fenix-resources-ltd" target="_blank" data-smartkarma-citation="entities:7405:1" rel="noopener">Fenix Resources (FEX AU)</a> </li>
</ul>


We analyse Champion Iron (CIA AU) after improvements in its operations in Q2FY26. The company destocked 477k tons and is down to 1.7 million tons to further reduce the stockpile.
The company also saw an improvement in its realized iron ore price (to 128 CAD/ton or 19% YoY) as it reduced its contractual arrangements for material. 
Despite the improvement in operational performance, which will drive profitability up 52% YoY, the stock trades at 11.7x FY26 PE and is fairly valued. We prefer Fenix Resources (FEX AU) 


Champion Iron Ore (CIA AU): Fairly Valued Despite Operational Improvements

<ul>
<li>We are now set for a <a href="https://www.mining.com/explaining-the-iron-ore-grade-shift/" target="_blank" rel="noopener">decline in the benchmark grade from 62% to 61% effective January 2nd, 2026, for Platts</a>, aligning the benchmark with more commonly traded fines.  </li>
<li>Alot of exchanges have begun to adopt this change, and we will update our FY26 numbers for it as well. Iron ore remains elevated at 105 USD/ton, climbing 2.3% WoW. </li>
<li>We continue to advocate strongly for <a href="https://www.smartkarma.com/entities/fenix-resources-ltd" target="_blank" data-smartkarma-citation="entities:7405:1" rel="noopener">Fenix Resources (FEX AU)</a>. Read <a href="https://www.smartkarma.com/insights/fenix-resources-fex-au-exciting-value-adding-catalyst-can-triple-production-again" target="_blank" data-smartkarma-citation="insights:200341" rel="noopener">Fenix Resources (FEX AU): Exciting Value-Adding Catalyst Can Triple Production Again</a> for a detailed outline of our thesis. </li>
</ul>


We are now set for a decline in the benchmark grade from 62% to 61% effective January 2nd, 2026, for Platts, aligning the benchmark with more commonly traded fines.  
Alot of exchanges have begun to adopt this change, and we will update our FY26 numbers for it as well. Iron ore remains elevated at 105 USD/ton, climbing 2.3% WoW. 
We continue to advocate strongly for Fenix Resources (FEX AU). Read Fenix Resources (FEX AU): Exciting Value-Adding Catalyst Can Triple Production Again for a detailed outline of our thesis. 


Iron Ore At 105 USD/Ton: Sweet Spot for Fenix Resources (FEX AU)

Australia

Fenix Resources Ltd operates as a resource exploration company. The Company explores for iron ore, vanadium, and manganese. Fenix Resources develops its projects in Australia.

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Fenix Resources (FEX AU)

Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China

We provide our take on the China data like TSF, auto sales and property that led to the sell-off in iron ore. We provide our rationale for an iron...

Sameer Taneja

Mount Gibson (MGX AU): Iron Ore Pure Play, 77% of the Mkt Cap in Cash, 0.5x EV-EBITDA With Catalysts

Mount Gibson Iron (MGX AU) is a pure play on iron ore trading at 0.5x EV-EBITDA, with 77% of the market capitalization in cash. We look forward to...

Sameer Taneja

Curator's Cut: Powering Down CATL, Iron Ore Plays & Japan Consumer Consolidation

This Curator's Cut highlights CATL's premium powering down, iron ore opportunities even as Simandou goes live, and Japan's consumer sector...

Pranav Rao

Champion Iron Ore (CIA AU): Fairly Valued Despite Operational Improvements

Champion Iron (CIA CN) has seen a dramatic turnaround in its operations. We discuss its prospects, Q2 results, and its valuation and contrast it...

Sameer Taneja

Iron Ore At 105 USD/Ton: Sweet Spot for Fenix Resources (FEX AU)

With Iron ore prices at 105 USD/ton and a short-term decline of 5-10 USD/ton on the cards, the only positive way to play the sector is Fenix...

Sameer Taneja

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China

We provide our take on the China data like TSF, auto sales and property that led to the sell-off in iron ore. We provide our rationale for an iron...

Sameer Taneja

Mount Gibson (MGX AU): Iron Ore Pure Play, 77% of the Mkt Cap in Cash, 0.5x EV-EBITDA With Catalysts

Mount Gibson Iron (MGX AU) is a pure play on iron ore trading at 0.5x EV-EBITDA, with 77% of the market capitalization in cash. We look forward to...

Sameer Taneja

Curator's Cut: Powering Down CATL, Iron Ore Plays & Japan Consumer Consolidation

This ​Curator's Cut highlights CATL's premium powering down, iron ore opportunities even as Simandou goes live, and Japan's consumer sector...

Pranav Rao

Champion Iron Ore (CIA AU): Fairly Valued Despite Operational Improvements

Champion Iron (CIA CN) has seen a dramatic turnaround in its operations. We discuss its prospects, Q2 results, and its valuation and contrast it...

Sameer Taneja

Iron Ore At 105 USD/Ton: Sweet Spot for Fenix Resources (FEX AU)

With Iron ore prices at 105 USD/ton and a short-term decline of 5-10 USD/ton on the cards, the only positive way to play the sector is Fenix...

Sameer Taneja

This Curator's Cut highlights CATL's premium powering down, iron ore opportunities even as Simandou goes live, and Japan's consumer sector...