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

Commodities

<ul>
<li>Iron ore prices experienced a modest WoW increase of 0.2%, reflecting easing trade tensions as the US considers reducing some of the stringent tariffs previously imposed.</li>
<li>China's Total Social Financing (TSF) increased by 22% YoY, reaching 5.89 trillion yuan, surpassing the expected 4.8 trillion yuan and boosting optimism for preemptive stimulus measures.</li>
<li>China's March steel production rose 5% YoY to 92.8 million tons, underscoring its vital role in the market, contributing 56% to total global production.</li>
</ul>


Iron ore prices experienced a modest WoW increase of 0.2%, reflecting easing trade tensions as the US considers reducing some of the stringent tariffs previously imposed.
China's Total Social Financing (TSF) increased by 22% YoY, reaching 5.89 trillion yuan, surpassing the expected 4.8 trillion yuan and boosting optimism for preemptive stimulus measures.
China's March steel production rose 5% YoY to 92.8 million tons, underscoring its vital role in the market, contributing 56% to total global production.


Iron Ore Tracker (28-Apr-2025): Iron Ore Within The Band, China Lending Data To The Rescue

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> announced disappointing results, with revenues/profits down 16%/53% YoY, disappointing consensus slightly by 4-5%. </li>
<li>Capex accelerated to 3.5-3.8 bn USD annually, vs the initial 3.2-3.5 USD. The company reduced its decarbonization capex to 400-500 mn USD from the initial &gt;700 mn USD. </li>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a>  dividend payout ratio has reverted to its base level of 65%, yielding a modest 5.3% based on H1FY25's 50-cent distribution.</li>
</ul>



Fortescue Metals (FMG AU) announced disappointing results, with revenues/profits down 16%/53% YoY, disappointing consensus slightly by 4-5%. 
Capex accelerated to 3.5-3.8 bn USD annually, vs the initial 3.2-3.5 USD. The company reduced its decarbonization capex to 400-500 mn USD from the initial &gt;700 mn USD. 

Fortescue Metals (FMG AU)  dividend payout ratio has reverted to its base level of 65%, yielding a modest 5.3% based on H1FY25's 50-cent distribution.


Fortescue Metals Group (FMG AU): The Thrill Is Gone, And So Has The Dividend

<ul>
<li>Fenix Resources (FEX AU) delivered impressive results for Q2 2025. Sales increased by 71% QoQ and 68% YoY, driven by the ramp-up of the Shine iron ore mine.</li>
<li>The Beebyn-W11 mine, projected to ramp up production to 4 million tonnes from the current 2.5 million tonnes, is anticipated to receive final mining approval in the current quarter.</li>
<li>Trading at 5.9x FY25e PE with 57 mn AUD in net cash, which accounts for 27% of its market capitalization, the stock is worth a look. </li>
</ul>


Fenix Resources (FEX AU) delivered impressive results for Q2 2025. Sales increased by 71% QoQ and 68% YoY, driven by the ramp-up of the Shine iron ore mine.
The Beebyn-W11 mine, projected to ramp up production to 4 million tonnes from the current 2.5 million tonnes, is anticipated to receive final mining approval in the current quarter.
Trading at 5.9x FY25e PE with 57 mn AUD in net cash, which accounts for 27% of its market capitalization, the stock is worth a look. 


Fenix Resources (FEX AU) Q2 FY25 Update: Close to Tripling Production

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fenix-resources-ltd" target="_blank" rel="noopener">Fenix Resources (FEX AU)</a> will increase production from 1.4 to 4.1 million tons annually in early CY25, placing it at 2.5x PE/0.3x EV-EBITDA FY26e (~100 USD/ton iron ore px assumption). </li>
<li>On our estimates, if the company pays no dividend and capex is 60 mn AUD in both FY25 and FY26, net cash&gt;market capitalization. <strong>(Conclusion: Board Pays Dividend)</strong>
</li>
<li>We will look for the next quarterly production update for more color this month. Read our last update <a href="https://www.smartkarma.com/insights/fenix-resources-fex-au-positive-developments-at-iron-ridge-and-other-catalysts" target="_blank" data-smartkarma-citation="insights:169207" rel="noopener">Fenix Resources (FEX AU): Positive Developments At Iron Ridge And Other Catalysts</a> </li>
</ul>



Fenix Resources (FEX AU) will increase production from 1.4 to 4.1 million tons annually in early CY25, placing it at 2.5x PE/0.3x EV-EBITDA FY26e (~100 USD/ton iron ore px assumption). 
On our estimates, if the company pays no dividend and capex is 60 mn AUD in both FY25 and FY26, net cash&gt;market capitalization. (Conclusion: Board Pays Dividend)

We will look for the next quarterly production update for more color this month. Read our last update Fenix Resources (FEX AU): Positive Developments At Iron Ridge And Other Catalysts 


Fenix Resources (FEX AU): Deep Value, >35% of Mkt Cap in Cash, 2.5x PE/0.3 EV-EBITDA on Ramp Up

Equity Bottom-Up

<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> reported a disappointing Q4 FY24 production report. Volumes were inline, but provisional pricing impacts of ~20% brought a quarterly cash outflow of one mn AUD.</li>
<li>Volume guidance for FY25 was light at 2.7-3 mn tons (vs. 4.1 mn in FY24). Net Cash rose to 436 mn AUD (excluding Fenix Investment), almost equaling the market cap. </li>
<li>FY24 results are due on 21st August 2024, when the board will recommend a dividend. Net cash and future cash flows should support the share price in the long run.  </li>
</ul>



Mount Gibson Iron (MGX AU) reported a disappointing Q4 FY24 production report. Volumes were inline, but provisional pricing impacts of ~20% brought a quarterly cash outflow of one mn AUD.
Volume guidance for FY25 was light at 2.7-3 mn tons (vs. 4.1 mn in FY24). Net Cash rose to 436 mn AUD (excluding Fenix Investment), almost equaling the market cap. 
FY24 results are due on 21st August 2024, when the board will recommend a dividend. Net cash and future cash flows should support the share price in the long run.  


Mount Gibson (MGX AU): Q4 Production Report And Guidance Disappointing, But Mkt Cap = Net Cash

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 Tracker (28-Apr-2025): Iron Ore Within The Band, China Lending Data To The Rescue

Encouraging lending in China, a rebound in steel production, and reduced trade tensions provide a basis for iron ore prices to increase from 98 USD...

Sameer Taneja

Fortescue Metals Group (FMG AU): The Thrill Is Gone, And So Has The Dividend

We summarize the results of FMG AU for H1 FY25 and our gleanings from the conference call on the 20th of Feb. Based on the current payout of 65%,...

Sameer Taneja