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>We like <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a> for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. </li>
<li>The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. </li>
<li>The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). </li>
</ul>


We like Vale (VALE US) for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. 
The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. 
The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). 


VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

<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>Investics Research will initiate coverage of the materials sector in April 2024, starting with iron ore and then gold, coal, and steel in subsequent months (in that order).</li>
<li>The areas of coverage on asset classes will encompass the underlying commodity and the associated equities. </li>
<li>Areas of differentiation would include in-depth coverage of all equities (small/mid and large cap) and actionable tactical ideas on the commodity.</li>
</ul>


Investics Research will initiate coverage of the materials sector in April 2024, starting with iron ore and then gold, coal, and steel in subsequent months (in that order).
The areas of coverage on asset classes will encompass the underlying commodity and the associated equities. 
Areas of differentiation would include in-depth coverage of all equities (small/mid and large cap) and actionable tactical ideas on the commodity.


Introduction: Initiation of Coverage in the Materials Sector

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

<ul>
<li>
<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> has one of its most prized assets in Mongolia. The Oyu Tolgoi mine has an 80-year mine-life and will ramp up significantly in coming years.</li>
<li>
<a href="https://www.smartkarma.com/entities/entree-resources-ltd-3aeeb68c-80d0-4ada-822e-898883fbb28e" target="_blank" data-smartkarma-citation="entities:26727:1" rel="noopener">Entree Resources (ETG CN)</a> is the last remaining hurdle to acquire after the successful integration of Turquoise Hill in late 2022.</li>
<li>Entree just released a batch of 2022 (!) drilling results, one month before an arbitration deadline. Why was it released now? Will Rio finally move on Entree before the deadline?</li>
</ul>



Rio Tinto Ltd (RIO AU) has one of its most prized assets in Mongolia. The Oyu Tolgoi mine has an 80-year mine-life and will ramp up significantly in coming years.

Entree Resources (ETG CN) is the last remaining hurdle to acquire after the successful integration of Turquoise Hill in late 2022.
Entree just released a batch of 2022 (!) drilling results, one month before an arbitration deadline. Why was it released now? Will Rio finally move on Entree before the deadline?


Rio: JV Partner in Mongolia Releases Incredible Copper Grades One Month Before Arbitration Deadline

Iron Ore, Copper, Equities, Mint Finance

Umang Agrawal

Iron Ore, Copper, Equities

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Commodities

<ul>
<li>Elevated portside inventories and a fresh WoW increase suggest Golden Week restocking has yet to translate into meaningful inventory drawdowns.</li>
<li>Options positioning is turning increasingly constructive, with call OI building at strikes 105 and 110. OI PCR of 0.61 reinforces the bullish bias.</li>
<li>Managed money extended its bearish positioning for a 12th straight week, trimming long exposure by ~4% while increasing short positions by ~3%. </li>
</ul>


Elevated portside inventories and a fresh WoW increase suggest Golden Week restocking has yet to translate into meaningful inventory drawdowns.
Options positioning is turning increasingly constructive, with call OI building at strikes 105 and 110. OI PCR of 0.61 reinforces the bullish bias.
Managed money extended its bearish positioning for a 12th straight week, trimming long exposure by ~4% while increasing short positions by ~3%. 


Iron Ore’s GWH Restocking Is Back in Play, But Mill Margins Lag

Australia

Rio Tinto Limited is an international mining company.  The Company has interests in mining for aluminum, borax, coal, copper, gold, iron ore, lead, silver, tin, uranium, zinc, titanium dioxide feedstock, diamonds, talc and zircon. Dually-listed company with RIO LN.

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Rio Tinto Ltd (RIO AU)

VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

We initiate coverage on VALE US, one of the world's biggest iron ore producers, with high-grade iron ore and low-cost production. The stock trades...

Sameer Taneja

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

Introduction: Initiation of Coverage in the Materials Sector

We provide readers with an introduction to our initiation on commodities. We also provide a rationale as to how our coverage will be comprehensive...

Sameer Taneja

Rio: JV Partner in Mongolia Releases Incredible Copper Grades One Month Before Arbitration Deadline

Rio Tinto still has an "annoying" third partner in its world-class Oyu Tolgoi mining project in Mongolia. Entree Resources is a prime takeover target.

Nicolas Van Broekhoven

Iron Ore’s GWH Restocking Is Back in Play, But Mill Margins Lag

Iron ore’s near-term direction remains sentiment-led, as restocking and bullish options positioning compete with weak steel margins.

Mint Finance

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