Energy & Materials Sector

• In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the September 2024 index rebal event.
• We continue to expect one change for ASX 100 and two changes for ASX 200.
• Separately, there could be 14 ADDs and 6 DELs for ASX 300.

• Regis’s McFilamy’s gold project faced setback due to cultural significance of land
• Federal Environment Minister Tanya Plibersek’s declaration halted project activities
• Project had already been approved under state and federal legislation, causing surprise and confusion

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• The Hyosung siblings swapped ₩60B in shares over August 13-14, raising the elder brother’s Hyosung Corp stake to 40.9% and lowering HS Hyosung below 3%.
• The younger brother must sell additionally at least 11.2% of his 14.2% Hyosung Corp stake. The elder brother may buy, but his cash position and 40% stake limit his need.
• This block deal will be the first to apply the new pre-disclosure rule. So, we should use it to test how the rule affects price movements for better entry timing.

• US oil and gas rig count fell by two to 586 for the week ending 16/Aug, indicating a decline for the second time in three weeks.
• US oil rig count fell by two to 483, after rising by three the previous week. Gas rigs increased by one to 98, after declining for three straight weeks.
• For the week ending 09/Aug, US crude oil production fell back to 13.3m bpd, after hitting its record high of 13.4m bpd the week prior.  

West China Cement (WCC) has released softer than expected H1/24 numbers. The company’s revenue and profitability in Mainland China continued to decline amid the real estate slump, while its performance in Africa was mixed. ​FCF remained negative and leverage continued to deteriorate. That said, liquidity appears manageable, as we expect WCC to refinance its short-term loans. The main debt maturity wall is in July 2026, when the USD 600 mn notes will come due.

In our view, the key risk is uncertainty over the extent of WCC’s overseas expansion. The company stated that it has no plans for capacity expansion in FY 2024, other than the ongoing developments in Ethiopia and Uzbekistan. However, this contradicts media reports on WCC’s investments in Rwanda, Uganda and Zimbabwe. Hence, we are unsure about the level of the company’s planned overseas capex. Going forward, cement demand in Mainland China is likely to remain weak, due to the slowdown in infrastructure investment (with lower growth) and continued decline in real estate investment.

• We are seeing a broad-based snap-back rally after the S&P 500 found support at our 5100-5191 target/bounce area which we discussed in our 7/30/24 and 8/6/24 Compass reports
• We are not out of the woods as we still see the $SPX and $QQQ going through a 1- to 4-month pullback/consolidation period, and market dynamics remain far from perfect.
• Apr. 2000, Aug. 2007, Feb. 2022 $SPX top comparisons are why we expected SPX to find support at 5100, AND THEN test YTD highs (8/13/24 Compass report).

• Southern Copper Corporation’s second quarter and 6 months results of 2024 suggest a resilient performance with both positive and negative attributes.
• The company reported a 15% surge in London Metal Exchange copper price in comparison to Q2 2023, which combined with production cuts and market deficit, resulted in positive trends for the corporation.
• Copper made up about 76% of the company’s sales in Q2, and despite a weak demand from China, the corporation confidently expects a 0.6% increase in the copper supply for 2024.

• Gevo produces renewable fuels and develops related technologies that help customers meet carbon abatement goals as cost effectively as possible.
• Gevo is pursuing several complementary businesses, each at a different stage in the business cycle, including sustainable aviation fuel (SAF) (Net- Zero 1 [NZ1]) (near FID), carbon tracking (Verity) (near revenue), renewable natural gas (RNG) (operating), bio- propylene (pilot phase joint development agreement [JDA] with LG Chem), and other businesses.

• In Q1 FY12/24, revenue was JPY36.5bn (-9.5% YoY), operating profit JPY2.2bn (+15.9% YoY), and recurring profit JPY1.2bn (+7.6% YoY).
• The company revised its full-year forecast to revenue JPY79.8bn (+1.8% YoY) and recurring profit JPY5.0bn (+106.6% YoY).
• The dividend payout ratio changed to 40% of underlying profit, with a minimum dividend of JPY10 per share.

• Drilling operations have commenced on the Anchois East well (now named Anchois-3). 
• The well has three objectives. An initial pilot hole will be drilled to evaluate the potential of the Anchois Footwall prospect, located in an undrilled fault block to the east of the main field with a 2U Prospective Resource estimate of 170 bcf in the main O Sand target.
• Our unrisked NAV for this prospect is £0.05/sh. We carry a 61% chance of success. 

• China’s steel industry is facing significant challenges, including price drops, overcapacity, and government intervention
• Steel producers are preparing for potential consolidation and supply side reforms to address the industry crisis
• Iron ore prices have also been impacted by the challenges in the steel market, with expectations for lower Chinese imports and domestic output

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• During last week, the International Energy Association (IEA) as well as OPEC both announced that demand for oil is slowing, revising down previous demand forecasts for the year and beyond.
• The world is seeing a major deceleration in oil demand growth led by China, with inventories set to rise next year even if OPEC+ were to postpone its plans to ease output cuts, the IEA stated.
• Meanwhile, the growth from the US won’t be able to offset the slowdown from China, according to the agency.

• Wheaton Precious Metals has reported its second quarter results for 2024, demonstrating a robust financial and operational performance, reflecting the company’s successful business model and strategic asset management.
• The company generated $234 million in operating cash flows and reached a record of over $450 million for the first half of the year.
• Wheaton Precious Metals produced over 305,000 gold equivalent ounces year-to-date, keeping on track with the 2024 production guidance of 550,000 to 620,000 gold equivalent ounces.

• Nutrien recently reported its financial results for the first half of 2024, highlighted by mixed performances across its various segments.
• The company, a global leader in providing crop inputs and services, recorded an adjusted EBITDA of $3.3 billion, driven by increased crop input margins, strong global demand for potash, and lower operating costs.
• Potash segment performance was robust in terms of volume but faced challenges from lower benchmark prices which were partly offset by reduced production costs due to increased mine automation.

• CF Industries reported notable operational and financial results for the first half and second quarter of 2024, reflecting strong performance despite a mix of ongoing challenges and strategic advancements.
• The company, a major player in the nitrogen fertilizer industry, generated an adjusted EBITDA of $750 million for the quarter, bringing the figure to $1.2 billion for the half-year period.
• Key drivers included robust operational rates at ammonia plants, particularly the Waggaman facility which outperformed expectations, and significant strides in its decarbonization initiatives which include several carbon capture and sequestration projects.

• Marathon Oil Corporation reported its first quarter 2024 earnings with several important takeaways underlining its current and future financial health.
• The company successfully navigated the quarter, showcasing a strong financial and operational performance while continuing to make strategic enhancements to its asset base, aiming for a resilient and sustainable business model.
• In the past earnings results, Marathon Oil strongly emphasized its commitment to executing a capital-efficient strategy, delivering significant free cash flows, and providing meaningful returns to shareholders.

• 2Q24 costs increased Y/Y but declined Q/Q.
• TMC reported 2Q24 operating results that included higher exportation and evaluation expense of $12.4 million versus $8.1 million in 2Q23 due to increased spending on mining, technological and process development costs associated with increased engineering work with its offshore partner Allseas, and a modest increase in G&A expenses ($7.9 million versus $5.1 million in the year-ago period) due to higher share-based compensation and personnel costs.
• As a result, quarterly loss increased to $20.2 million from $14.1 million in 2Q23, with EPS of ($0.06) versus ($0.05) in 2Q23.

• Western Midstream Partners has recently reported a robust quarter, continuing its momentum into the second quarter of 2024.
• The company saw significant throughput growth, largely driven by the robust operability of its systems, setting records in the Delaware Basin for natural gas and crude oil, along with natural gas liquids.
• This marks the fifth consecutive quarter of records for these metrics.

Kolibri Global Energy (KEI) reported Q224 results that saw double-digit increases across all financial and operating metrics on a y-o-y basis, with production and EBITDA up 37% and 40%, respectively. Sequentially, EBITDA fell 7%, while netback was 5% higher at US$40/bbl. KEI has started drilling three new 1.5-mile lateral wells, slated for completion in early Q4. If successful, these wells could potentially see an up to 1.5x increase in production rates and lead to a change in the field development plan. We have updated our valuation to US$6.9/share as we await more details about the performance of the new wells and KEI’s next steps. The potential change in field development strategy is yet to be priced in by the market.

• With increasing market volatility, base metals continue their rocky weekly performance. Copper is up marginally, taking it past 9000 USD/ton.
• Copper inventories continue to pile at the exchanges, with ~500k tons combined at Comex, LME, and Shanghai, up almost 7% in the last two weeks. 
• We believe accumulating names like Southern Copper (SCCO US) and Ivanhoe Mines (IVN CN) with good long-term fundamentals is a great strategy. 

• Iron ore found no support at the 95-100 USD/ton range for the first time in a while and broke through it, gapping down 8.8% WoW to 92 USD/ton.
• This break is a major short-term bearish signal for iron ore prices, as market participants would lose confidence in the theory of cost support at 95-100 USD/ton. 
• TSF data and mill margins ( -575 RMB/ton) from China also do not inspire much confidence in the near-term outlook for iron ore. 

• The Mosaic Company’s second quarter 2024 earnings were a mixed set of results amidst striving for strategic and operational enhancements during a challenging operational backdrop.
• The company reported an adjusted EBITDA of $584 million and revenues of $2.8 billion, which, when compared with the previous year’s $744 million EBITDA and $3.4 billion in revenues, marked a noticeable decrease.
• This decline is reflective of the tougher conditions in the market yet shows resilience given the macroeconomic pressures and fluctuating demand patterns across different geographies.

• Occidental Petroleum Corporation exhibited strong execution and financial health in its Second Quarter 2024 earnings, marking numerous operational and strategic accomplishments that further consolidate its market position.
• The company reported its highest quarterly production in four years, both for the total company and U.S. onshore operations, significantly surpassing production guidance with a generation of $1.3 billion in free cash flow before working capital adjustments.
• This performance was mainly driven by remarkable execution across business segments, particularly in the Permian region, including new well performances and production uptime, as well as a robust showing in the Gulf of Mexico.

• Gross profit margin before D&A in Select’s Water Infrastructure Segment crossed the 50% threshold in 2Q24.
• Segment revenue totaled $68.6 million, a 24% increase from 2Q23 and gross profit before D&A totaled $35.0 million, a 68% Y/Y gain.
• Gross profit margin before D&A was 51%, compared with 46.9% in 1Q24 and 37.8% in 2Q23.

• Summit Materials has consistently demonstrated a focused approach toward operational excellence and strategic acquisitions, contributing to robust financial performance during the second quarter of 2024, despite challenging external conditions.
• The integration of Argos USA and other strategic acquisitions has played a pivotal role, enhancing Summit Materials’ foothold in high-growth markets and fortifying its balance sheet, reinforcing its ability to navigate through economic cycles with increased resilience.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
• In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
• Some of our index change expectations have changed since our last insight.

• There are 38 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
• We expect 33 of the 38 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.
• Since the start of the calendar year, shares held though Southbound Connect have increased in 22 of the 27 HSCI deletions that will also be removed from Stock Connect.

• For the week ending 09/Aug, US crude inventories increased by 1.4 mb for the first time in seven weeks, contrary to analyst expectations of a 1.9 mb drawdown.
• US natural gas inventories fell by 6 Bcf, its first decline since 04/Apr. However, storage levels are up 6.8% YoY and 13% above the 5-year seasonal average.
• Wells Fargo, UBS, and BMO Capital reduced their target prices on Occidental. BMO Capital lowered its targets on Chevron and Halliburton but raised its target on Exxon Mobil.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Medco Energi’s ESG as “Adequate”, in line with its scores for the Environmental, Social and Governance pillars. Controversies are “Immaterial” and Disclosure is “Adequate”.

• The Williams Companies presented a strong narrative of growth and resilience in their latest earnings call for the second quarter of 2024.
• Highlighted by the expansion of their Transmission and Storage business, the company reported record results despite the headwinds from low natural gas prices that impacted their Gathering and Processing business.
• Prominent themes throughout the report included consistent execution of strategic projects, optimization efforts in their portfolio, and sustainability practices.

• EIA maintained its 2024 oil demand forecast but cut its 2025 estimate by 160k bpd. OPEC reduced its 2024 and 2025 forecasts by 135k and 65k bpd, respectively.
• Total production of OPEC members obliged to implement supply cuts averaged 21.45m bpd in July, exceeding the target by 1%.
• EIA lowered its 2024 and 2025 oil price forecasts due to slower demand growth. However, it still expects prices to rise in H22024 led by a decline in inventories.

• Marathon Petroleum Corporation has reported its results for the second quarter of 2024, underlining resilience in its operational and financial performance despite varying market conditions.
• This period marked a continuation of strategic initiatives aimed at enhancing long-term shareholder value and adapting to global market demands.
• Positively, Marathon Petroleum demonstrated constructive operational execution with refinery utilization rates reaching 97%, a notable achievement that underscores its capacity to operate efficiently and effectively.

• International Flavors & Fragrances Inc. (IFF) has communicated noteworthy strides in its strategic and operational framework during its second quarter 2024 earnings call, underscoring a period of transition and adaptive strategies within its operational model.
• Highlighting the positives, IFF reported significant volume growth marked by progress in areas like Scent, Health & Biosciences, and Nourish.
• The company achieved double-digit growth across these business lines, demonstrating robust demand for its product offerings and successful execution of strategic initiatives.

• MPLX’s second quarter 2024 earnings reveal a company navigating its expansions and capital allocations with a steadfast focus on growth, particularly in robust regions such as the Marcellus, Utica, and Permian basins.
• MPLX reported a year-over-year increase in adjusted EBITDA by 8% and a 7% rise in distributable cash flow.
• These results underline the company’s robust operational efficiency and strategic asset utilizations, particularly in zones with rich liquid-natural gas intersections.

• ONEOK’s Second Quarter 2024 Earnings illustrates strong financial and operational performance, underpinned by key strategic moves, acquisitions, and organic growth initiatives.
• The integration and synergy realization post acquisition has been a significant positive driver.
• The financial highlights from the quarter include a net income of $780 million or $1.33 per share, a substantial increase of 28% year over year, complemented with a 22% quarter over quarter rise.

• Permian Resources Corporation demonstrated solid performance in the second quarter of 2024, continuing to enhance operational efficiencies and strategically expand through acquisitions.
• Operational successes have allowed the company to revise its production forecasts upward for the second consecutive quarter.
• The inclusion of the newly acquired Barilla Draw assets poses an opportunity to further enhance Permian Resources Corporation’s asset base and cash flow profiles.

• Vulcan Materials Company, specializing in aggregates, demonstrated resilience in its second quarter earnings despite facing operational challenges, including unfavorable weather conditions.
• The company reported significant advancements in unit profitability and margins despite a year-over-year decline in aggregate shipments due to numerous rain-impact days across its key markets.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Westlake Corporation delivered a commendable performance in the second quarter of 2024, particularly in its Housing and Infrastructure Products (HIP) segment, which achieved record quarterly results.
• The company reported increased net sales of $3.2 billion, an EBITDA of $744 million, and a net income of $313 million or $2.40 per share.
• These figures represent improvements over the results of the second quarter of 2023.

• New CEO Suyog appointed in Q1 FY2025, who held leadership roles at Reliance Industries (RIL IN) and McKinsey & Company.
• Aarti Industries (ARTO IN) reported 28% revenue growth, 52% EBITDA growth and 95% PAT growth on YoY basis.
• Company become cautious about its FY25 EBITDA guidance of Rs. 1,450-1,700 crore, given global headwinds such as the Red Sea crisis and Chinese dumping.

• Aramco’s Q2 operating revenue grew 5.7% YoY but missed estimates by 0.3%. Meanwhile, net profit fell by 3.4% YoY but its EPS edged past estimates by 0.8%.
• Total hydrocarbon production fell 8.9% YoY to 12.3 mboepd while crude oil realisations rose 8.8% YoY.
• In Q2, Aramco declared dividends totalling USD 31.1 billion, despite an 18.1% YoY decline in free cash flow to USD 19 billion.

• ACME Solar Holdings (1700918D IN) is looking to raise US$360m in its upcoming India IPO. 
• ACME Solar (ACME) is a renewable energy firm with a portfolio of solar, wind, hybrid and firm and dispatchable renewable energy (FDRE) projects.
• In this note, we talk about the company’s historical performance.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Huhtamaki’s ESG as “Strong”, in line with its Governance score, while the company’s Environmental and Social pillars are “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”. 

• 2Q24 production of 35,608 boe/d had been already reported.
• Production in Brazil has not been restored yet and is expected to restart only at the end of October.
• In light of (1) the longer than expected shutdown and uncertain restart date in Brazil (FY23 production was ~1 mboe/d) and (2) increased frequency and duration of blockades around the operations in Colombia, there is a downside risk of 1.5-2.5 mboe/d to the FY24 production guidance of 35.5-39 mboe/d (excluding Argentina and the contribution of any exploration success).

• DNG continued to take advantage of the high gold price in Q2, beating revenue and profitability estimates, boosting its cash balance and reducing development risk as it enters its next phase of growth.
• Dynacor posted record cash gross operating margin of $346/oz AuEq sold, compared to $234/oz in Q2/23 and our estimate of $233/oz.
• DNG added to its strong balance sheet with $35M in cash (up from $28M in December 2023), $55M in working capital, and negligible debt.

• Revenue grew 30.5% YoY to JPY9.6bn, operating profit increased 248.3% YoY to JPY2.1bn, and recurring profit rose 176.7% YoY to JPY2.6bn.
• Revenue from optical sheets for laptops/tablets and automobiles drove growth, with Opasuki® and Opalus® products contributing significantly.
• The company revised its full-year forecast, expecting JPY19.8bn revenue, JPY3.1bn operating profit, JPY3.3bn recurring profit, and JPY2.2bn net income.

• The theory is that stocks which are down hard FY-to-date by end-April end up being good sells because Australians will harvest their losses into end-June. 
• The idea is then to buy those oversold names and hold them for 30-40 trading days. That has worked 10 out of the last 12 years hedged vs ASX200.
• This year, the “sold-down” list is very heavily weighted to miners. They have continued to fall since end-June so it’s down. But hedged vs a basket of miners? It’s up.

• The MV J-Gold Miners index represents the performance small-cap gold and silver mining companies listed around the world.
• This index is reviewed semi-annually in March and September. During these reviews, names can be added or deleted from the index.
• In this insight, we take a look at the latest lists of potential ADDs and DELs for the index rebal event in September 2024.

• Vedanta Ltd (VEDL IN) is looking to raise US$760m from selling some stake in Hindustan Zinc (HZ IN).
• Overall, while the deal would represent just 2.6% of the firm’s outstanding shares, the deal is a large one to digest at 41 days of the stock’s three month ADV.
• In this note, we take an early look at the deal, and comment on the deal dynamics.

• According to our NAV analysis, it suggests a base case valuation of 122,473 won per share for HD Hyundai, representing a 50% upside from current levels.
• The combined value of HD Korea Shipbuilding & Offshore Engineering, HD Hyundai Electric & Energy, and HD Hyundai Marine Solution is 11.4 trillion won.
• We estimate HD Hyundai’s 73.85% stake in Hyundai Oilbank to be 7.0 trillion won. We also applied a 5x OP of its core business and a 50% holdco discount.

• Occidental’s Q2 revenue grew 1.7% YoY but missed estimates by 1.7%. Net profit surged by 34.9% YoY and beat estimates by 32.5%.
• Total production rose by 3.3% YoY led by robust growth in the Permian and Gulf of Mexico. Production touched its highest in four years.
• Average crude oil realisations rose 8.6% YoY, and natural gas increased by 11.3%, while domestic gas realisations fell sharply by 60.3% YoY.

• Iron Ore Price Decline: Iron ore prices dropped 1.7% in Week 32, driven by reduced steel output and fading demand. Stimulus-driven rally failed to sustain.
• Options Market Trends: Weekly options volume surged, with put volume increasing 106%, pushing the put/call ratio to 1.33, indicating bearish sentiment.
• Implied Volatility Shifts: Implied volatility (IV) surged midweek, particularly for September contracts, reflecting increased market uncertainty; options skew narrowed to just 0.3% suggesting more expensive calls.

• 2Q24 production in the Williston Basin was 1,226 boe/d.
• This excludes natural gas liquids (historically 150-200 bbl/d).
• This represents an increase of 7% compared to 1Q24 but 2Q24 production from the six wells Slawson wells continues to be partially impacted by gas export infrastructure constraints.

• Exxon Mobil Corporation reported its second-quarter earnings for the year 2024, showcasing robust financial performance with earnings totaling $9.2 billion, marking the second-best second-quarter results in the past decade.
• The earnings were bolstered by record production levels in key regions such as Guyana and the Permian Basin, reflecting ExxonMobil’s sharp focus on its advantaged assets.
• The recent acquisition of Pioneer has further scaled up Permian production to 1.2 million barrels per day, contributing significantly to the overall production boost.

• LyondellBasell faced a challenging yet ultimately positive quarter, reflecting a complex global economic environment marked by energy and feedstock cost variations and varying regional demand dynamics.
• The company reported a substantial 30% improvement in underlying business results compared to the previous quarter, primarily driven by increased production volumes.
• The company’s financial health appears robust, with a second-quarter EBITDA of $1.4 billion and notable earnings per share of $2.24.

Pan American Silver (PAAS) delivered a robust set of Q224 results, with lower silver production offset by the stronger sales and commodity prices. This was coupled with good cost control in the gold segment and resulted in a 65% increase in mine operating earnings and 31% growth in EBITDA. Strong cash flow generation was the main highlight of the results, with free cash flow exceeding that of the whole of FY23. PAAS expects production to be more heavily weighted to Q4 and silver output to be towards the lower end of guidance. We have reduced our FY24e EBITDA by 3.6% but our valuation remains virtually unchanged at US$23.5 per share due to a slightly lower weighted average cost of capital (WACC).

• The CPMC Holdings (906 HK) Board recommends that shareholders accept Changping Industrial’s HK$6.87 offer, which the IFA opines is fair and reasonable.
• The Board’s carefully crafted and suitably caveated recommendation acknowledges that shares continue to trade through terms and ORG Technology Co., Ltd. A (002701 CH)’s HK$7.21 offer is higher but preconditional. 
• Based on ORG’s shareholding/irrevocable and volume traded above terms, Changping Industrial’s offer has little chance of success. It remains a question of when, not if, Changping Industrial will bump.

• The connection between Newjf and Greatview is deep. Newjf expressed an interest in acquiring Greatview early on, but the two parties didn’t reach an agreement. Greatview is not entirely “innocent”.
• Newjf’s decision to forcibly acquire Greatview at this moment should be made after careful consideration. Mengniu may not necessarily oppose this merger. Mengniu is likely to take a neutral stance. 
• Newjf’s Offer is attractive. In the absence of a more realistic action by Greatview to make a higher Offer, we advise investors not to walk away from Newjf’s Offer easily.

• Sustainable packaging play Orora Ltd (ORA AU) has “received and has rejected an opportunistic, conditional and non-binding indicative proposal from Lone Star Fund“. 
• The A$2.55/share Offer (less any dividends declared or payable), by way of a Scheme, was a  33.9% premium to last close. Orora was down 25% YTD, prior to the proposal.
• Orora’s FY24 results will be released tomorrow. Expect more commentary on the rejection of Lone Star’s approach in the Q&A. 

• In response to media speculation, Orora Ltd (ORA AU) disclosed that it had rejected Lone Star’s indicative non-binding proposal at A$2.55 per share, a 33.5% premium to the undisturbed price.
• The offer is opportunistically timed to take advantage of the share price collapse precipitating from the profit warning on 2 April. 
• The Lone Star offer is unattractive and could also draw other suitors. If Lone Star walks, the downside is low, as Orora’s valuation is undemanding compared to peer multiples.

• Ball Corporation reported its second quarter 2024 earnings, depicting a strategic navigation through a mixed market landscape, facing both headwinds and tailwinds across its various regional operations.
• The company’s global beverage can shipments and aerosol shipments experienced growth rates of 2.8% and 5.6% respectively, indicating strong demand for sustainable aluminum packaging solutions—an area in which Ball continues to cement its leadership.
• This growth, however, came amidst varying regional dynamics, from exceeding expectations in North America and EMEA to confronting challenges in South America, particularly due to economic volatility in Argentina.

• Take aways: Norwegian maintenance season and no flows from Russia is a spicy mix. Temperature is the main factor for worries about stock levels 2022 mayhem may be closer than you think. Refiners’ capacity utilization weak causing fear of crude gluts
• Fears in natural gas markets have returned as Ukrainian troops are giving Putin his own “Operation Citadel” moment.
• While many European countries have sought alternatives to Russian gas, nations like Austria and Slovakia still depend on it.

• In H1 2024 Profits and cash flow grew year over year
• Overall, operations tracking in line with previous guidance with some cost savings
• The key is the copper price which is closer to bottoming

• Red Five sold 412 million shares acquired through the process of merging with Silver Lake, making a tidy profit of 30 million
• The move gives Red Five nearly $500 million in cash and bullion with no debt, providing significant flexibility for the company
• Len’s discussion in the Diggers presentation indicated that this was a medium-term strategy with potential action by June 2025 for evaluating and dealing with the shares

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The EA 248A bond meeting on 9-August produced a consent from bondholders to extend the maturity as per the company’s request.
• EA’s CFO announced that the company has secured 3-year credit facilities from 9 financial institutions and Asset Plus Securities Fund Management.
• Barring any further negative news , we believe the maturity extension and the long-term bank credit facilities could lead TRIS to at least reverse EA’s credit rating outlook.

• • EDG announced it has completed its first five diamond drill holes totalling 1,854m, as part of its 10,000m 2024 diamond drill program.
• • Assays are expected to start rolling in late August or early September.
• • Additional work is ongoing throughout the property to set up drill targets at the undrilled Olympic area and new targets at Upper Eagle.

• S&P DJI have started a market consultation to change the index weighting methodology for the Select Sector Indices to reduce concentration and avoid reverse turnover.
• There is US$281bn tracking the Select Sector Indices from the SPDR ETFs. The market consultation will have a larger impact on indices where there is a high degree of concentration.
• The largest inflows are expected in Apple, Conocophillips, Amazon.com and Netflix while the largest outflows will be from Microsoft, NVIDIA, Chevron, Procter & Gamble, Exxon Mobil, Costco Wholesale and Meta Platforms.

• On the 30th July 2024, packaging play CPMC Holdings (906 HK) dispatched the Composite Document for the HK$6.87/share, in cash, Offer from SASAC/NCSSF-backed Champion.
• The Response Document, including the IFA opinion (with a fair & reasonable conclusion) has now been dispatched. 
• However, the focus remains on ORG Technology Co., Ltd. A (002701 CH)‘s superior HK$7.21/share Offer, which is currently negotiating the necessary regulatory approvals. 

• Discounts to NAV of covered holdcos generally tightened during July and first week of August. Discounts to NAV: C.F.Alba, 45.3% (vs. 44.5% as of end of June); 
• GBL, 42.2% (vs. 43.6%); Heineken Holding, 16% (vs. 18.4%); Industrivärden C, 2.2% (vs. 2.4%); Investor B, 7.5% (vs. 9.9%); Porsche Automobile Holding, 34.6% (vs. 35.8%), Porsche SE reports 13 August. 
• Rio DLC spread tightened to 22.1% (vs. 20.7%). What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

• Nippon Paint Holdings (4612 JP)‘s 2Q24 was largely uneventful, with sales up 5.4% yoy and net profit up 7.3% yoy.
• Management maintained its full-year guidance of Y184bn operating profit target in 2024 (10% growth vs. 2023).
• China was a bright spot with operating profit up 30% yoy and made up 35% of total operating profit of the company. 

• US oil and gas rig count increased by two to 588 for the week ending 09/Aug, following a decline the week prior.
• US oil rig count rose by three to 485, after remaining flat the previous week. Gas rigs decreased by one to 97, marking a third consecutive weekly decline.
• For the week ending 02/Aug, US crude oil production hit a record 13.4 mbpd, following four weeks of steady output at 13.3 mbpd.

• Hurricane Debby caused 300,000 electricity customers to lose power in Florida and Georgia, reducing electricity demand, which led to natural gas prices declining.
• Since the 2006 shale boom, the share of US natural gas production from the offshore Gulf of Mexico has dropped from 15% to 1.8% by 2023.
• The Gulf of Mexico area accounted for 14.4% of US crude oil production in 2023. Although still a significant share, it has declined from 25.4% in 2006. 

• TPL continues to use water as means to diversify from oil and gas. The low price of natural gas has put pressure on the BOE price TPL generates royalties from.   
• TPL missed our total revenue estimate for the second quarter due to a decline in oil and gas royalties. However, TPL’s water business remains the bright spot of the business
• We continue to believe TPL’s revenue sourced outside of oil and gas royalties could draw greater investor attention and result in a higher valuation for TPL’s stock. 

• EOG Resources, in its Second Quarter 2024 Earnings Results Conference Call, highlighted several key aspects of its performance and strategic direction.
• The company reported a substantial adjusted net income of $1.8 billion and generated $1.4 billion in free cash flow, indicating a robust financial position.
• Total liquids production forecast for the year was increased by 11,800 barrels per day, and operational efficiencies were projected to reduce per unit cash operating costs by $0.15, enhancing the forecasted free cash flow to an impressive $5.7 billion for the full year.

• Mushroom Material, a startup that converts agricultural waste into eco-friendly packaging, has secured over US$5 million in seed funding led by Wavemaker Partners and SEEDS Capital.
• Icehouse Ventures, K1W1, and Black Kite Capital participated.
• The investment is being used to establish a 1,300-sqm pilot plant in Auckland’s Mount Roskill in New Zealand.

• Celanese Corporation, a global chemical and specialty materials company, reported its financial outcomes for the second quarter of 2024, revealing a mix of predictable challenges and strategic adjustments aimed at maintaining stable performance amidst varied market conditions.
• Positively, Celanese showcased resilience via strategic management of its engineered materials segment and its acetyls mix.
• The company noted a steady demand in automotive applications, benefiting partly from synergy realizations following its integration of DuPont’s mobility and materials unit.

• Kiswire Ltd (002240 KS) is the number one player for steel wire and rope products in Korea. More than 85% of its sales are generated overseas. 
• The company has a consistent record of generating positive net profit. It is trading at low valuations (P/B of 0.3x and EV/EBITDA of 4.5x).
• Its average net profit from 2021 to 2023 are much higher than previous three years from 2018 to 2020, which is a testament of increasing demand for its products globally. 

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: BrainBees Solutions (0172540D IN) and WeRide (WRD US) IPOs.
• Event-Driven developments: Greatview Aseptic Packaging (468 HK), C.I. TAKIRON Corporation (4215 JP), Descente Ltd (8114 JP), Fancl Corp (4921 JP), Fuji Soft Inc (9749 JP), Trend Micro Inc (4704 JP). 

• The second quarter earnings report for ConocoPhillips presented a mixed scenario, affirming the company’s continued operational strength along with areas that may trigger concern for prospective investors.
• On a positive note, ConocoPhillips announced a 34% increase in its ordinary dividend, signaling confidence in sustainable financial health and a strong commitment to returning value to shareholders.
• Furthermore, the acquisition of Marathon Oil was a highlight, poised to enhance ConocoPhillips’ operational scale and resource base, which could lead to improved efficiencies and broader market reach.

• Alamos Gold Inc. delivered strong financial and operational performance in the second quarter of 2024, marked by numerous records including production, revenue, and cash flow.
• The company, bolstered by its recent acquisition of Argonaut which included the Magino and Island Gold Mines, now forecasts a significant production increase, projecting an annual rate of approximately 600,000 ounces of gold, potentially expanding to 700,000 ounces by 2026.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Air Products’ Third Quarter 2024 Earnings Results presented a mix of strong financial performances juxtaposed with challenges in certain geographical segments.
• The company reported third-quarter adjusted earnings per share of $3.20, surpassing the upper range of their guidance.
• This marked a 7% improvement over the previous year, primarily attributed to robust performances in the Americas and Europe, alongside effective price and productivity initiatives.

• Revenue in 1H FY12/24 decreased 4.2% YoY to JPY15.7bn, driven by weak performance in the agrichemicals field.
• Operating profit in 1H FY12/24 decreased 38.5% YoY to JPY2.0bn, impacted by lower revenue and increased expenses.
• Recurring profit and net income attributable to owners of the parent fell over 30% YoY but exceeded forecasts.

• Shell’s second-quarter 2024 results reflect significant progress towards the company’s strategic goals laid out during the Capital Markets Day, underscoring a commitment to enhancing shareholder value while transitioning towards more sustainable energy practices.
• Despite challenging market conditions, Shell has effectively managed to progress in its operations and financial performance.
• Financially, Shell reported robust results for the quarter, with adjusted earnings of $6.3 billion and impressive cash flow generation, amounting to $13.5 billion from operations.