Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/alliance-mineral-assets-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:16331:1">Alliance Mineral Assets (AMS SP)</a> hosted an EGM to ask its shareholders for approval to issue shares to competitor <a href="https://www.smartkarma.com/entities/galaxy-resources-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:13914:1">Galaxy Resources (GXY AU)</a>. See details in my previous insight <a href="https://www.smartkarma.com/insights/alliance-mineral-ams-sp-galaxy-resources-now-largest-shareholder-tick-tock-until-full-takeover" target="_blank" rel="noopener" data-smartkarma-citation="insights:29830">Alliance Mineral (AMS SP): Galaxy Resources Now Largest Shareholder, Tick Tock Until Full Takeover?</a>The capital injection was approved by a majority of AMS' investors and will make GXY the largest investor in AMS. AMS will also change its name to Alita Resources.GXY paid 0.20 AUD/share which gives them an 11.81% stake in the company. Recently, AMS' share price has been under continued selling pressure falling to 0.134 SGD, which equates to a market valuation of only 200M SGD. While sentiment among the lithium names is negative (for the bearish case read <a href="https://www.smartkarma.com/insights/lithium-market-phlegmatic-growth-terrible-investment" target="_blank" rel="noopener" data-smartkarma-citation="insights:30645">Lithium Market - Phlegmatic Growth, Terrible Investment!</a> by <a href="https://www.smartkarma.com/profiles/gaius-king" target="_blank" rel="noopener" data-smartkarma-citation="accounts:3254">Gaius King</a> ) we note that Alliance has guaranteed offtake agreements for 50% of its production, has the highest quality spodumene available in the market and its contractual selling price is significantly higher ($700+) than its costs ($500-550). GXY is now 'half-pregnant' and given the company's low reserve life (less than 5 years) and AMS' ongoing exploration program we predict it is only a matter of time before a full takeover of AMS is considered by GXY management. In this respect, we note that GXY's new CEO, Simon Hay, just started his role on 01/07/19 and will surely need to consider GXY diminished market valuation and short mine life.Should GXY fail to act we shouldn't discount the possibility that larger players such as <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:1104:1">Wesfarmers Ltd (WES AU)</a> could be looking to consolidate the space after its recent purchase of <a href="https://www.smartkarma.com/entities/kidman-resources-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:13917:1">Kidman Resources (KDR AU)</a>. Fair Value is reduced to 0.30 SGD (was 0.35 SGD before dilution effect).

Alliance Mineral Assets (AMS SP) hosted an EGM to ask its shareholders for approval to issue shares to competitor Galaxy Resources (GXY AU). See details in my previous insight Alliance Mineral (AMS SP): Galaxy Resources Now Largest Shareholder, Tick Tock Until Full Takeover?The capital injection was approved by a majority of AMS' investors and will make GXY the largest investor in AMS. AMS will also change its name to Alita Resources.GXY paid 0.20 AUD/share which gives them an 11.81% stake in the company. Recently, AMS' share price has been under continued selling pressure falling to 0.134 SGD, which equates to a market valuation of only 200M SGD. While sentiment among the lithium names is negative (for the bearish case read Lithium Market - Phlegmatic Growth, Terrible Investment! by Gaius King ) we note that Alliance has guaranteed offtake agreements for 50% of its production, has the highest quality spodumene available in the market and its contractual selling price is significantly higher ($700+) than its costs ($500-550). GXY is now 'half-pregnant' and given the company's low reserve life (less than 5 years) and AMS' ongoing exploration program we predict it is only a matter of time before a full takeover of AMS is considered by GXY management. In this respect, we note that GXY's new CEO, Simon Hay, just started his role on 01/07/19 and will surely need to consider GXY diminished market valuation and short mine life.Should GXY fail to act we shouldn't discount the possibility that larger players such as Wesfarmers Ltd (WES AU) could be looking to consolidate the space after its recent purchase of Kidman Resources (KDR AU). Fair Value is reduced to 0.30 SGD (was 0.35 SGD before dilution effect).

EGM Alliance Mineral (AMS SP): Galaxy Investment Approved by Shareholders. Next Stop: Full Takeover?

Earlier this month <a href="https://www.smartkarma.com/entities/1104" target="_blank" data-smartkarma-citation="entities:1104:1">Wesfarmers Ltd (WES AU)</a> bid for <a href="https://www.smartkarma.com/entities/13917" target="_blank" data-smartkarma-citation="entities:13917:1">Kidman Resources (KDR AU)</a> in a move that raised some eyebrows in the lithium sector. Wesfarmers had earlier gone after <a href="https://www.smartkarma.com/entities/20374" target="_blank" data-smartkarma-citation="entities:20374:1">Lynas Corp Ltd (LYC AU)</a> but that deal looks increasingly complex given the latter has several pending issues to be resolved in Malaysia. Yesterday Australian newspapers reported that several KDR investors were resisting the Wesfarmers offer as they say it undervalues the company.
This morning investors are informed that <a href="https://www.smartkarma.com/entities/16331" target="_blank" data-smartkarma-citation="entities:16331:1">Alliance Mineral Assets (AMS SP)</a> is placing 32.5M AUD worth of shares at 0.20 AUD/share to both <a href="https://www.smartkarma.com/entities/13914" target="_blank" data-smartkarma-citation="entities:13914:1">Galaxy Resources (GXY AU)</a> and <a href="https://www.smartkarma.com/entities/11366" target="_blank" data-smartkarma-citation="entities:11366:1">Jiangxi Special Electric A (002176 CH).  </a>The entire placement will result in 13% dilution for existing shareholders.
After the placement Galaxy will become Alliance's largest shareholder with an almost 12% stake. Jiangxi Special Electric will own just over 9% of the company.
<div class="content-highlight">
Officially this placement will help speed up the development of the Bald Hill deposit but the real reason for this share issuance is to get Galaxy over 10% so it has a blocking minority in case any other buyers would be circling Alliance Mineral.
</div>
Over time a full takeover of Alliance by Galaxy is the only logical outcome. Tick Tock, how long will this take?

Earlier this month Wesfarmers Ltd (WES AU) bid for Kidman Resources (KDR AU) in a move that raised some eyebrows in the lithium sector. Wesfarmers had earlier gone after Lynas Corp Ltd (LYC AU) but that deal looks increasingly complex given the latter has several pending issues to be resolved in Malaysia. Yesterday Australian newspapers reported that several KDR investors were resisting the Wesfarmers offer as they say it undervalues the company.
This morning investors are informed that Alliance Mineral Assets (AMS SP) is placing 32.5M AUD worth of shares at 0.20 AUD/share to both Galaxy Resources (GXY AU) and Jiangxi Special Electric A (002176 CH).  The entire placement will result in 13% dilution for existing shareholders.
After the placement Galaxy will become Alliance's largest shareholder with an almost 12% stake. Jiangxi Special Electric will own just over 9% of the company.

Officially this placement will help speed up the development of the Bald Hill deposit but the real reason for this share issuance is to get Galaxy over 10% so it has a blocking minority in case any other buyers would be circling Alliance Mineral.

Over time a full takeover of Alliance by Galaxy is the only logical outcome. Tick Tock, how long will this take? 

Alliance Mineral (AMS SP): Galaxy Resources Now Largest Shareholder, Tick Tock Until Full Takeover?

<a href="https://www.smartkarma.com/entities/16331" target="_blank" data-smartkarma-citation="entities:16331:1">Alliance Mineral Assets (AMS SP)</a> is a dual-listed (SGX/ASX) lithium producer in Australia. Last year the company saw its share price fall by 61% from 0.45 SGD (January 2018) to 0.17 SGD recently. Investing in lithium is all about the adoption of Electrical Vehicles (EV) going forward. While <a href="https://www.smartkarma.com/entities/20279" target="_blank" data-smartkarma-citation="entities:20279:1">Tesla Motors (TSLA US)</a> has been the poster child of the EV sector thus far, the next 24 months will see an onslaught of new arrivals by various brands which should expand the EV market substantially.The success of the EV segment largely depends on the improvements in battery technology and consumer choice. We reference from the excellent SmartKarma Originals piece <a href="https://www.smartkarma.com/insights/battery-technology-the-key-to-an-electric-vehicle-future" target="_blank" data-smartkarma-citation="insights:29025">Battery Technology- The Key To An Electric Vehicle Future</a> published earlier in April to conclude that lithium is likely to remain a key source for EV battery makers and Alliance Mineral's premium quality lithium will be in high demand. Should the market continue to ignore the asset value of Alliance Mineral it will likely become an attractive M&amp;A candidate for a larger lithium producer.We estimate the average cost of most of the current shareholder register is 0.30+ SGD hence the pressure on management to create lasting value is intense. With the Bald Hill mine ramping up in FY20 (June Year-End) and FY21, offtake partly secured and more agreements in the offing, shares are only trading at 2x EV/EBITDA. Its closest competitors <a href="https://www.smartkarma.com/entities/13914" target="_blank" data-smartkarma-citation="entities:13914:1">Galaxy Resources (GXY AU) and </a><a href="https://www.smartkarma.com/entities/7460" target="_blank" data-smartkarma-citation="entities:7460:1">Pilbara Minerals (PLS AU)</a><a href="https://www.smartkarma.com/entities/13914" target="_blank" data-smartkarma-citation="entities:13914:1"></a> are both trading at 8x EV/EBITDA.Our estimate of Fair Value is 0.35 SGD or 106% upside from the current share price based on an extremely conservative 4x 2020 EV/EBITDA multiple.

Alliance Mineral Assets (AMS SP) is a dual-listed (SGX/ASX) lithium producer in Australia. Last year the company saw its share price fall by 61% from 0.45 SGD (January 2018) to 0.17 SGD recently. Investing in lithium is all about the adoption of Electrical Vehicles (EV) going forward. While Tesla Motors (TSLA US) has been the poster child of the EV sector thus far, the next 24 months will see an onslaught of new arrivals by various brands which should expand the EV market substantially.The success of the EV segment largely depends on the improvements in battery technology and consumer choice. We reference from the excellent SmartKarma Originals piece Battery Technology- The Key To An Electric Vehicle Future published earlier in April to conclude that lithium is likely to remain a key source for EV battery makers and Alliance Mineral's premium quality lithium will be in high demand. Should the market continue to ignore the asset value of Alliance Mineral it will likely become an attractive M&amp;A candidate for a larger lithium producer.We estimate the average cost of most of the current shareholder register is 0.30+ SGD hence the pressure on management to create lasting value is intense. With the Bald Hill mine ramping up in FY20 (June Year-End) and FY21, offtake partly secured and more agreements in the offing, shares are only trading at 2x EV/EBITDA. Its closest competitors Galaxy Resources (GXY AU) and Pilbara Minerals (PLS AU) are both trading at 8x EV/EBITDA.Our estimate of Fair Value is 0.35 SGD or 106% upside from the current share price based on an extremely conservative 4x 2020 EV/EBITDA multiple.

Discover Singapore: Alliance Mineral; Supplies High Quality Lithium to EV; Buy at 2x 2020 EV/EBITDA

Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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<ul>
<li>Cover 314 companies, soon to be expanded</li>
<li>Recommend Speculative Buy on PEX</li>
<li>Thick VMS intersections e.g. 40m @ 10.2% Zn, 2.83 % Pb</li>
<li>Economic mineralisation at Southern Nights starts at 120m depth</li>
<li>Wagga Tank prospect recorded 9.3m @ 7.32% Zn, 3.38% Pb</li>
<li>
<a href="https://www.smartkarma.com/entities/4111" target="_blank" data-smartkarma-citation="entities:4111:1">Peel Mining Ltd (PEX AU)</a> ; <a href="https://www.smartkarma.com/entities/9713" target="_blank" data-smartkarma-citation="entities:9713:1">Metals X Ltd (MLX AU)</a>; <a href="https://www.smartkarma.com/entities/5968" target="_blank" data-smartkarma-citation="entities:5968:1">Ramelius Resources (RMS AU)</a>; <a href="https://www.smartkarma.com/entities/9553" target="_blank" data-smartkarma-citation="entities:9553:1">Atrum Coal Nl (ATU AU)</a>; <a href="https://www.smartkarma.com/entities/12867" target="_blank" data-smartkarma-citation="entities:12867:1">First Graphite (FGR AU)</a> ; <a href="https://www.smartkarma.com/entities/13914" target="_blank" data-smartkarma-citation="entities:13914:1">Galaxy Resources (GXY AU)</a>; <a href="https://www.smartkarma.com/entities/8189" target="_blank" data-smartkarma-citation="entities:8189:1">Sovereign Metals (SVM AU)</a>; <a href="https://www.smartkarma.com/entities/17908" target="_blank" data-smartkarma-citation="entities:17908:1">Globe Specialty Metals (GSM US)</a>; <a href="https://www.smartkarma.com/entities/15733" target="_blank" data-smartkarma-citation="entities:15733:1">White Cliff Minerals (WCN AU)</a>; <a href="https://www.smartkarma.com/entities/7971" target="_blank" data-smartkarma-citation="entities:7971:1">Carnegie Clean Energy (CCE AU)</a>; <a href="https://www.smartkarma.com/entities/8807" target="_blank" data-smartkarma-citation="entities:8807:1">Theta Gold Mines (TGM AU)</a>  </li>
</ul>


Cover 314 companies, soon to be expanded
Recommend Speculative Buy on PEX
Thick VMS intersections e.g. 40m @ 10.2% Zn, 2.83 % Pb
Economic mineralisation at Southern Nights starts at 120m depth
Wagga Tank prospect recorded 9.3m @ 7.32% Zn, 3.38% Pb

Peel Mining Ltd (PEX AU) ; Metals X Ltd (MLX AU); Ramelius Resources (RMS AU); Atrum Coal Nl (ATU AU); First Graphite (FGR AU) ; Galaxy Resources (GXY AU); Sovereign Metals (SVM AU); Globe Specialty Metals (GSM US); White Cliff Minerals (WCN AU); Carnegie Clean Energy (CCE AU); Theta Gold Mines (TGM AU)  


New J. Hutton Exploration Report (Week Ending 25/01/19)

Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

<ul>
<li>Sega Sammy stock has dipped considerably off it 52 week high.</li>
<li>Its legacy pachinko and pachslot businesses are declining, shifting long-term management goals toward expansion in integrated resorts.</li>
<li>Corporate officials have dispatched 64 top managers from Japan to its South Korea gaming property to train as an advance team for a  possible IR win in Japan.</li>
</ul>As leading IR developers frustration levels rise over the persistent delays of the Japanese Diet in passing a problem gambling bill, I asked our…


Sega Sammy stock has dipped considerably off it 52 week high.
Its legacy pachinko and pachslot businesses are declining, shifting long-term management goals toward expansion in integrated resorts.
Corporate officials have dispatched 64 top managers from Japan to its South Korea gaming property to train as an advance team for a  possible IR win in Japan.
As leading IR developers frustration levels rise over the persistent delays of the Japanese Diet in passing a problem gambling bill, I asked our…

Could Sega Sammy Holdings Be a Smart Wild Card Bet on a Japanese Casino License?

Australia

Galaxy Resources Limited provides mining services. The Company produces lithium, potash, hard rock and brine assets. Galaxy Resources serves customers in Australia, Argentina, and Canada.

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Galaxy Resources (GXY AU)

EGM Alliance Mineral (AMS SP): Galaxy Investment Approved by Shareholders. Next Stop: Full Takeover?

Alliance Mineral Assets (AMS SP) hosted an EGM to ask its shareholders for approval to issue shares to competitor Galaxy Resources (GXY AU). See...

Nicolas Van Broekhoven

Alliance Mineral (AMS SP): Galaxy Resources Now Largest Shareholder, Tick Tock Until Full Takeover?

Earlier this month Wesfarmers Ltd (WES AU) bid for Kidman Resources (KDR AU) in a move that raised some eyebrows in the lithium sector. Wesfarmers...

Nicolas Van Broekhoven

Discover Singapore: Alliance Mineral; Supplies High Quality Lithium to EV; Buy at 2x 2020 EV/EBITDA

Alliance Mineral Assets (AMS SP) is a dual-listed (SGX/ASX) lithium producer in Australia. Last year the company saw its share price fall by 61%...

Nicolas Van Broekhoven

New J. Hutton Exploration Report (Week Ending 25/01/19)

Cover 314 companies, soon to be expanded Recommend Speculative Buy on PEX Thick VMS intersections e.g. 40m @ 10.2% Zn, 2.83 % Pb Economic...

Boost Research

Could Sega Sammy Holdings Be a Smart Wild Card Bet on a Japanese Casino License?

Sega Sammy stock has dipped considerably off it 52 week high. Its legacy pachinko and pachslot businesses are declining, shifting long-term...

Howard J Klein

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