Energy & Materials Sector

• Aarti Industries (ARTO IN)  is planning a huge capex of 2500 Cr, which will increase their PPE by more than 50% from current CWIP and new capex.
• Company is targeting 1450 to 1700Cr EBITDA in next year which is almost 1.5x to 2x of the existing EBITDA.
• Introducing new products in the value chain, which has high-value added and high margins.

• Chevron’s Q2 revenue grew 4.7% YoY but its net profit fell by 26.2%. Revenue beat estimates by 1% while EPS missed expectations by 13%.
• Production grew 11% YoY, driven by record output in the Permian, strong growth in the DJ Basin, and successful PDC Energy integration.
• Q2 capex rose 5.2% YoY to USD 4 billion from higher upstream investments and PDC asset spending. Free cash flow dropped 8% YoY to USD 2.3 billion.

• Siemens Energy is a spin-off from Siemens focused on gas, power, and renewables, positioning itself at the forefront of the energy transition.
• The company faces challenges, particularly in its renewables division, dealing with supply chain disruptions and technical issues.
• Mark Heiley, founder of The Analyst, discusses Siemens Energy’s history, impetus for demerger, and potential in addressing renewable energy challenges.

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

• US crude inventories fell for the sixth straight week by 3.7 mb, exceeding the 1.6 mb decline expected by analysts. However, gasoline stocks rise by 1.3 mb.
• For the week ending 02/Aug, US natural gas inventories were up 8.2% YoY and 14.9% above the 5-year seasonal average.
• Occidental shares surged as it beat Q2 EPS estimates by 32.5%. Exxon and Aramco also exceeded EPS forecasts, while Chevron fell short.

• Discussion on the recent market volatility, particularly in metals markets
• Gold being a standout performer, while other commodities struggle
• Challenges in finding solid investment opportunities and concerns about earnings for gold companies

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

• Chesapeake Energy Corporation’s second quarter 2024 earnings underscore a strategic balance between operational efficiency and financial stewardship amidst the dynamic conditions of the natural gas market.
• The company has effectively reduced its operating costs and improved capital efficiency, pivotal in maneuvering through low-price environments.
• Chesapeake has achieved a 50% improvement in Marcellus drilling performance since 2022, attributed to a 50% increase in daily drilling over the past two years and an extension in average lateral well length by nearly 3,000 feet in Q2.

• FMC Corporation reported its second quarter 2024 earnings with what can be described as a mixed but cautiously optimistic outlook amidst a complex market environment.
• CEO Pierre Brondeau, after reassuming his role, provided a comprehensive reassessment of the company’s position and future expectations.
• During the earnings call, FMC Corporation outlined both achievements and challenges, as well as strategic adjustments aimed at long-term ustainability and growth.

• DuPont’s second quarter 2024 earnings reflected a strong recovery trajectory, with CEO Lori Koch and CFO Antonella Franzen outlining improvements across key performance metrics.
• The company reported revenue and earnings that surpassed previous guidance, buoyed by a broad-based electronics recovery and gains in the Water and Protection (W&P) business.
• On the financial front, DuPont registered an increase in net sales by 2% compared to the previous year, totaling $3.2 billion.

• Sales in 1H FY12/24 were JPY538.8bn (+4.6% YoY), with a 1.5% decrease on a local currency basis.
• Operating profit in 1H FY12/24 was JPY21.9bn (+120.3% YoY), with a 116.7% increase on a local currency basis.
• The company revised its FY12/24 forecast to JPY1.10tn in sales and JPY40.0bn in operating profit.

• Consolidated Q1 FY03/25 results: Revenue JPY40.6bn (-1.7% YoY), Operating profit JPY1.3bn (+66.7% YoY), Recurring profit JPY1.2bn (+87.9% YoY), Net loss JPY147mn (+345.5% YoY).
• Segment performance: Revenue JPY20.5bn (-11.4% YoY), Operating profit JPY562mn (-40.6% YoY); Revenue JPY18.1bn (+12.1% YoY), Operating profit JPY580mn (JPY295mn loss in Q1 FY03/24).
• Additional segments: Revenue JPY2.4bn (+8.3% YoY), Operating profit JPY157mn (+582.6% YoY); Revenue JPY1.6bn (-19.3% YoY), Operating loss JPY12mn; Revenue JPY967mn (+14.0% YoY), Operating profit JPY59mn (+145.8% YoY).

• Trading opportunities arise when overseas traders’ SSF positions face unwinding by local market makers, who enter SSF positions and take opposing spot positions, unwinding at expiry.
• August-Expiry SSF data shows reverse flow impact by local market makers today, with varying degrees of impact per stock but an observable overall trend.
• With ongoing market volatility in Korea, consider setups targeting price impacts from reverse flows of sector pairs trading on the next SSF expiration date.

• SK Innovation is considering on using its treasury shares to inject capital into its EV battery making subsidiary SK On. 
• The appraisal rights exercise price is 111,943 won per share (15% higher than current price). Many minority shareholders are likely to exercise their appraisal rights in SK Innovation.
• We remain Bearish on SK Innovation. We continue to be negative on the SK Innovation and SK E&S merger. Plus, we are concerned about the continued weakness at SK On. 

• On 7 August, Korea Zinc (010130 KS) announced several impressive capital return plan that should help to increase shareholder value.
• The separation of Korea Zinc between the Choi and Jang families has been in progress in the past several years. The exact timing of when this occurs remains uncertain. 
• Our NAV Analysis of Young Poong is NAV per share of 470,065 won, representing a 52% upside from current levels. 

• Exxon Mobil’s Q2 revenue grew 12.2% YoY and net profit increased by 17.3%. Revenue missed estimates by 0.4% while net profit exceeded expectations by 6.2%. v
• Exxon Mobil’s Q2 oil production hit a record high since the 1999 merger, driven by strong output in Guyana and the Permian basin.
• Exxon Mobil expects full-year expenditures to total USD 28 billion, including USD 25 billion for ExxonMobil and USD 3 billion for Pioneer.

• SDRL reported second quarter results with similar commentary as its peers had previously provided. Current market conditions have resulted in contract awards being delayed even though day rates hold steady
• The shift in the environment has meant SDRL is no longer expecting short-term drilling work in the second half for two of its vessels, Sevan Louisiana and West Phoenix. 
• In 2025, SDRL is set to enhance its operations in Brazil with the addition of two vessels operating at high day rates.

• Revenue increased by JPY13mn (+0.1% YoY), with Specialty Steel and Wire Products up JPY171mn (+1.9%) and Induction Heating down JPY158mn (-3.1%).
• Operating profit rose by JPY124mn (+45.9% YoY), with Specialty Steel and Wire Products up JPY104mn and Induction Heating up JPY21mn (+7.3%).
• Full-year FY03/25 forecast progress rates: 22.5% for revenue, 19.7% for operating profit, 26.1% for recurring profit, 23.4% for net income.

• Sales increased JPY8.1bn (+8.4% YoY) due to higher sales in Films, Environment and Functional Materials, and Functional Textiles.
• Operating profit rose JPY3.2bn, with increased profit in Films, Environment and Functional Materials, Functional Textiles, and Real Estate segments.
• Biotechnology business sales and segment profit details are missing; pharmaceuticals contract manufacturing improved profitability after FDA warning letter close-out.

• • 2Q24 WI production was 25,411 boe/d, in line with our expectations and within the company’s guidance for 2Q24 (23.8-27 mboe/d).
• • WI production of ~3.3 mbb/d in Cote d’Ivoire was particularly high.
• WI production has now stabilized at ~4.5 mbbl/d.

• Consolidated Q1 FY03/25 results: Revenue JPY40.6bn (-1.7% YoY), Operating profit JPY1.3bn (+66.7% YoY), Recurring profit JPY1.2bn (+87.9% YoY), Net loss JPY147mn (+345.5% YoY).
• Segment performance: Revenue JPY20.5bn (-11.4% YoY), Operating profit JPY562mn (-40.6% YoY); Revenue JPY18.1bn (+12.1% YoY), Operating profit JPY580mn (JPY295mn loss in Q1 FY03/24).
• Additional segments: Revenue JPY2.4bn (+8.3% YoY), Operating profit JPY157mn (+582.6% YoY); Revenue JPY1.6bn (-19.3% YoY), Operating loss JPY12mn; Revenue JPY967mn (+14.0% YoY), Operating profit JPY59mn (+145.8% YoY).

• Ovintiv recently announced results for its second quarter of 2024, highlighting continued success in execution, free cash flow generation, and shipment of shareholder returns.
• The North American energy producer has reported a net earnings of $340 million and an impressive cash flow exceeding $1 billion, outdoing consensus estimates.
• This performance is underscored by a production outperformance on both oil and natural gas, as well as cost efficiencies.

• Crude oil prices ended Monday lower but fell less than other commodities and equities. WTI dropped 0.79% and Brent fell 0.66%, while the S&P 500 declined 3%.
• Crude oil prices were supported by rising Middle East tensions, the shutdown of Libya’s largest oil field, and a sharp decline in the DXY.
• Henry Hub futures fell 1.27% due to surplus stockpiles, cooler US weather forecasts, and the impact of Hurricane Debby.

• The acquisition of Filo (FIL CN) by Lundin Mining (LUN CN) and BHP Group Ltd (BHP LN) could be the start of a much larger M&A wave.
• Many juniors trade at 0.1x to 0.2x NAV while transactions typically happen at 0.8x-1x NAV. Filo was acquired at 0.81x NAV so right within this range.
• We continue to like a basket of junior copper mines to get exposure to M&A copper dynamics

• The milder drop in crude oil prices was reflected in energy stocks on Monday, with most major oil and gas companies, outperforming the S&P 500.
• Most of the oil companies’ volume PCR was elevated on Monday and Friday, with Haliburton’s volume PCR exceptionally high at 3.66 on Monday (5/Aug).
• On 5/Aug, all major energy companies saw a rise in implied volatility due to recession fears, except Shell, whose IV dropped slightly to 20.01% from 20.28% on Friday.

• ECVT continues to experience setbacks to its operations this year. The latest from its joint venture, Zeolyst, having renewable fuel customers delay catalyst orders.   
• The headwinds ECVT has dealt with in the past year creates pressure on investor sentiment and the Company now having to reassure investors it can sustain generating free cash flow.
• The investor story that shifted out to 2025 remains unchanged. We believe ECVT’s stock price currently reflects investor unrest as to the possibility of ECVT’ 2025 prospects.  

• Shell’s Q2 revenue dipped 0.2% YoY, but net profit increased by 12.2%. Both revenue and EPS surpassed analyst expectations by 7.4% and 5.1%, respectively.
• Shell cut total debt by 10.5% YoY to USD 74.5 billion, with net debt down 5% YoY to USD 38.3 billion.
• Shell recorded a USD 708 million impairment from selling its Singapore refinery and another USD 783 million from pausing construction on a European biofuel plant.

• Champion Iron (CIA AU) reported an inline Q1 FY25, with revenue/earnings up 57%/308% YoY owing to a 34% YoY volume increase and better pricing. 
• The company reiterated its guidance for 15 million tons of production and equivalent sales. It is working on improving logistics after forest fires and other port/rail issues. 
• The stock trades at 8.5x PE and a 6% dividend yield for FY25e ( assuming iron ore prices of USD 108/ton with a 15 USD/ton premium on 65% Fe). 

• LVG announced the Imwelo Mining License has conditionally been approved for a 10-year renewal, providing runway for LVG to execute.
• On July 18th, the Company announced the receipt of the Tax Clearance Certificate, the final requirement for transferring the Imwelo Mining Licence to LVG.
• Once the Mining License is officially transferred, it will trigger the second tranche of investment from the TAIFA group.

• Revenue increased 3.7% YoY to JPY21.9bn, with operating profit up 71.2% YoY to JPY1.6bn.
• Chemicals segment, accounting for 90.3% of revenue, saw significant growth in electronic materials (+44.7% YoY).
• Operating profit from electronic materials recovered to JPY340mn, approximately 6.3x YoY, aiding overall profit rise.

• BP’s recently disclosed quarterly financial results reflect a robust operational performance characterized by high plant reliability and refining availability.
• During the quarter, upstream plant reliability was reported at 96%, and refining availability matched this figure, fostering a conducive environment for strong production and operational efficiency.
• This operational reliability underpinned the company’s financial performance, with BP generating substantial operating cash flow of $8.1 billion.

• Greatview Aseptic Packaging (468 HK) disclosed that Mr Bi Hua Jeff (CEO) and Mr Hong Gang (co-founder) are contemplating a possible voluntary conditional offer. The terms and conditions were not disclosed.
• Due to the recent AGM protest votes, management needed to provide a credible alternative to shareholders to ensure that Shandong Xinjufeng Technology Packaging (301296 CH)’s offer failed.   
• Shandong Xinjufeng’s likely game plan is to wait for a binding counteroffer, focus on satisfying the preconditions, and requisition an EGM again to get Board representation.

• Exceeding the ceiling doesn’t cancel the merger; SK Innovation can still proceed. With their decision confirmed, focus should shift to appraisal rights flows rather than cancellation risk.
• We should focus on flow trading given the notable exercise size and potential for unprecedented market activity if institutions, including the NPS, exercise their rights due to the juicy premium.
• The large exercise size and SK Innovation’s KOSPI large-cap status may create unique flow trading opportunities, with potential repurchases after new shares list.

• To say Greatview Aseptic Packaging (468 HK)‘s management and Shandong Xinjufeng (301296 CH) (XJF) don’t get along is an understatement. GAPack has labelled XJF’s pre-conditional Offer hostile and unwelcome.
• Last night (6th August), co-founders Jeff Bi and Gang Hong tabled a non-binding Offer. No price was mentioned. Collectively they hold 14.72% of shares out compared to XJF’s 26.8%.
• A firm Offer (and price) would have been welcome, and this probably reflects on-going funding negotiations. But the announcement will give minorities pause if/when tendering into XJF’s Offer.

• Gold, silver, and copper futures fell by 3%, 6.7%, and 4.6% respectively on Monday amidst recession fears
• Gold and silver options showed bullish sentiment with significant call option buildup, while copper options saw mixed activity with high put interest in the front-month
• Implied volatility surged for gold, silver, and copper, with copper IV increasing by 7 percentage points to 27% post non-farm payroll report

• The transaction is valued at approximately 6.8x 2023 EBITDA, or $396/ton, which we consider a good price given that Cemex currently trades at 5.5x LTM EBITDA, or $208/ ton.
• We view Cemex’s divestments of its Dominican Republic assets as a positive credit event that aligns with its strategic priorities.
• With this divestment, the company should focus on growing its key markets through bolt-on acquisition while maintaining its commitment to a healthy balance sheet.

• Iron ore bounced from the 100 USD/ton level and has maintained a rangebound level between 95 and 130 USD/ton for the last three years.
• Inventories at the ports continued to increase, surpassing 150 million tons, representing about 38 days of inventory (normalized levels around 35 days). 
• After Capital Group’s recent selldown, Fortescue Metals (FMG AU) looks attractive (with a trailing dividend yield of 11% and 6.5x PE) and could be worth exploring. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Greentown China
• Medco Energi
• Vedanta Resources

• 2Q24 production of 7,688 bbl/d had been previously reported.
• 2Q24 production was negatively impacted by flooding and production is expected to return to normal during 3Q24.
• In light of the flooding, FY24 production guidance has been trimmed from 7.8-8.6 mbbl/d to 7.8-8.2 mbbl/d.

• Itochu Corp (8001 JP) today announced another TOB to buy out minorities of a sub other than Descente Ltd (8114 JP). C.I. TAKIRON Corporation (4215 JP) at ¥870. A takeunder.
• The stock was up a lot today I assume on news I didn’t see. Slightly lower than the close. Low EV/EBITDA multiple. Lacking transparency.
• The Board is OK selling at below book, but if one takes out net cash, securities, net receivables, and inventory/materials of one quarter of sales, the rest is 0.54x book.

• C.I. TAKIRON Corporation (4215 JP) has recommended a tender offer from Itochu Corp (8001 JP) at JPY870, a 9.7% premium to the undisturbed price of JPY793 (2 August).
• The lower limit of the tender offer is set at a 10.97% ownership ratio. The tender offer runs from 6 August to 18 September, with payment from 26 September. 
• While attractive vs peer multiples, the offer is light due to a skinny takeover premium, an implied P/B below 1x, and 9% below the mid-point IFA DCF valuation. 

• We discuss the potential additions and deletions to KOSPI 200 in December 2024 amid big declines in share prices of many stocks in KOSPI in the past week.
• The eight potential additions are up on average 8.5% from end of 2023. The eight potential deletion candidates are down on average 39.1% YTD.
• The average market cap of the seven potential additions is 1.9 trillion won. The average market cap of the seven potential deletion candidates is 0.6 trillion won.

• Polyplex is the integrated packaging player with global manufacturing facilities catering global customers and wide industries with its wide product portfolios
• Polyplex saw a 70% jump in exports while there has been a significant jump in product prices and spreads
• Significant investment by an FMCG veteran into another packaging player at the bottom of the cycle further strengthens the thesis.

• China’s state grid is increasing spending by 13% this year, which could boost sentiment in the copper sector
• Chinese steel rebar standards are changing, leading to concerns about obsolete inventories and potential pressure on steel prices
• India’s rising demand for metals, particularly in steel production, could have a significant impact on the global market by 2030

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

• The US oil and gas rig count declined by three to 586 for the week ending 02/Aug, following two consecutive weeks of increases. 
• The US oil rig count held steady at 482, after rising by 5 last week. Gas rigs decreased by three to 98, marking a second consecutive weekly decline.  
• In May, US crude oil production experienced its first monthly decline since January, while natural gas output dropped to its lowest level since February 2023. 

• Iron ore prices rose 1.8% last week, maintaining levels above $100/MT due to positive sentiment from potential Chinese stimulus measures.
• The volume put/call ratio for FEF options last week increased to 1.23, reflecting renewed put activity despite positive price action.
• Implied volatility (IV) remained largely flat last week. Despite continued interest in put options, IV skew declined suggesting puts became relatively cheaper.

• Eastman Chemical Company’s earnings call for the second quarter of 2024 presented a thorough discussion of the company’s ongoing projects and performance metrics, weighing both the positive advancements and the challenges faced.
• Among the highlighted points, the company’s methanolysis plant has achieved significant milestones in processing hard-to-recycle materials, producing on-spec food-grade Tritan with 75% rDMT, which demonstrates its capability to address substantial sustainability concerns through chemical recycling at scale.
• 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.

• We maintain our Outperform recommendation on Cemex. The company benefits from favorable market trends in key markets, a strong commitment to further strengthening its credit profile, and credit-positive strategic priorities.
• Despite challenging conditions, Cemex’s top line for 2Q24 remained relatively flat yoy, missing analyst estimates, while adjusted EBITDA aligned with expectations, rising by 1.5% yoy.
• Cemex ended the quarter with $10.1 billion of total debt, down $357.0 million sequentially. Gross and net leverage declined by one tick sequentially to 3.0x and 2.8x, respectively. 

• Reliance, Inc. reported its financial results for the second quarter of 2024, demonstrating resilience in a challenging market environment characterized by fluctuating steel prices and economic uncertainties.
• The company’s strategic focus on diversification and customer service has allowed it to increase shipments and expand its market presence, albeit with mixed financial outcomes.
• On a positive note, Reliance, Inc. has seen strong results from its recent acquisitions, including Cooksey Steel, American Alloy, and Mid-West Materials, which collectively added nearly $500 million in annualized net sales.

• Baosteel’s choice to maintain its original Offer may partly reflect its “confidence” in the deal. If investors bet that Huarui Offer will succeed, they need to bear some risks.
• If investors choose to arbitrage at HK$7.21/share, annualized return is 9% assuming privatization would be completed in mid-Jan 2025.Such return may not be attractive considering the uncertainties behind the deal. 
• If investors are optimistic about Baosteel’s final acquisition of CPMC, they can consider buying Baosteel shares, as Baosteel will become the new industry leader, with greater upside potential for valuation.

• Copper declined below the 9,000 USD/ton levels (WoW by -0.5%) due to weakness in financial markets caused by the Federal Reserve’s slowness in cutting rates. 
• Positive signs for copper were the Yangshan Copper Premium inflecting into positive territory and combined inventory on all exchanges being drawn down by almost 5%. 
• Lundin Mining (LUN CN) and BHP Group Ltd (BHP AU) will acquire Filo (FIL CN) for 4.1 bn CAD and develop the Josemaria project in Argentina. 

• Asia Cement China (743 HK)’s IFA opines that Asia Cement (1102 TT)’s HK$3.22 privatisation offer is fair and reasonable. The scheme vote is on 26 August. 
• The IFA valiantly justifies that an offer materially below net cash is fair and reasonable. The crux of the justification lies in the fortuitous disclosure of material capex requirements.
• While no shareholder holds the 10% blocking stake, the high AGM minority participation rates, retail opposition and unconvincing IFA report suggest a high chance of a deal break.

• Back on the 5th June, Chinese cement play Asia Cement China (743 HK) announced a rubbish HK$3.22/share Offer from its parent Asia Cement (1102 TT).
• This best & final cash Offer was a ~ 45% premium to undisturbed, and a 37% discount to FY23’s net cash. It’s a 39% discount to 1H24’s net cash.
• The Scheme Doc is now out, with a 26th August independent shareholder vote. And payment (if it were to occur) on 20th September. The IFA (unsurprisingly) says fair and reasonable. 

• At a time when the LSE has dumbed down the checks and balances for listed companies, now may be the right time to consider collapsing Rio Tinto (RIO AU)‘s DLC.
• Re: Sep24 Nikkei 225 Rebal, long Ryohin Keikaku (7453 JP) vs. Fast Retailing (9983 JP), but this may not last. It has worked very well. 
• Unless we see a significant (and sustainable) reversal in WH Group (288 HK)‘s US/Mexican ops in the interim results, now hardly appears the opportune time for a Smithfield IPO.

• BP’s operating revenue declined by 2.55% YoY, falling short of estimates by 9.78%, while underlying net profit increased by 6.45% YoY, exceeding EPS estimates by 8.75%.
• Strong performance from the Oil Production & Operations and Customers & Products segments drove underlying net profit growth.
• BP announced a 10% increase in its interim dividend to 8 cents/share and completed USD 1.75 billion in share buybacks in Q2.

• Newmont Corporation reported strong second quarter results, keeping the company well-aligned with its 2024 guidance and reinforcing its position to improve financial performance as the year progresses.
• In the quarter under review, Newmont achieved a production of 1.6 million ounces of gold, alongside 477,000 gold equivalent ounces from other minerals including copper, leading to a solid cash flow generation of $1.4 billion from operations and $594 million in free cash flow.
• These figures underscore the company’s robust operational achievements despite the usual challenges faced in the mining sector.

• Through advanced underwater inspection, including magnetic particle inspection, Valeura has concluded that the observed anomaly (a crack within a weld) on the Wassana MOPU is superficial, and accordingly does not constitute a risk to the structural integrity of the facility.
• Valeura has begun the process of restarting production operations and anticipates achieving pre-suspension oil production rates of ~5,000 bbl/d within a week.
• Valeura is looking to accelerate the redevelopment of the Wassana field.

• July was the second consecutive negative month for all 17 metals in our coverage except for gold, however, mining equities largely outperformed.
• As anticipated in our last Mining Monthly, the June sell-off marked a great buying opportunity in the metals equities.
• We are excited by the continued outperformance in the mining sector compared to broader markets as we believe this will begin attracting generalist investors to the space.

• Crown Holdings’ recent earnings report highlights a mix of positive and challenging aspects for the company.
• The company reported earnings of $1.45 per diluted share, an increase from $1.31 in the prior year.
• Adjusted earnings were also higher, at $1.81 per diluted share compared to $1.68 in the previous year.

• International Paper recently reported its quarterly earnings, providing a mixed picture of its current financial health and operational performance.
• The company, which operates in the packaging and paper industry, highlighted some areas of strength but also acknowledged several ongoing challenges.
• The earnings call revealed key insights into the company’s strategy, performance, and outlook, offering investors a balanced view of the opportunities and risks associated with the stock.

• Stella Chemifa Corporation (hereafter referred to as “the Company”) specializes in the manufacture and sale of hydrofluoric acid and fluorine- related compounds.
• Hydrofluoric acid is highly functional and used in a wide range of applications, as well as being extremely toxic and corrosive, making it extremely difficult to handle.
• In particular, ultra-high purity hydrofluoric acid is required for semiconductor manufacturing, and the Company, with its strong R&D and technological capabilities, has enjoyed great success in this area. 

• Murakami’s entity, City Index Eleventh, and daughter reported a 5.40% stake in Pacific Metals (5541 JP). The shares were purchased from 27 May to 25 July.
• Murakami’s average buy-in price is JPY1,259 per share, an 11.1% discount to the last close price. Murakami has been a substantial shareholder twice before.
• Murakami’s previous dealings in Pacific Metals were a pump-and-dump where he built up around 8% stake, only to sell into the share price pop subsequently. Expect more of the same.  

• US crude inventories fell for the fifth consecutive week by 3.4 mb, exceeding the 1.6 mb decline expected by analysts. Gasoline stocks also decreased by 3.7 mb.
• As of the week ending 26/Jul, US natural gas inventories were up 8.4% YoY and 15.7% above the 5-year seasonal average.
• European oil majors beat Q2 profit estimates. BP’s Q2 underlying net profit beat estimates by 7.7%. Shell’s Q2 EPS beat estimates by 5.1%. 

• ExxonMobil anticipates a USD 1.1 billion to USD 1.5 billion dent on its Q2 earnings due to the industry-wide contraction in refining margins.
• Exxon Mobil anticipates the USD 300 million to USD 700 million negative impact on earnings from lower gas prices to be offset by gains from higher oil prices.
• Since acquiring Pioneer, Exxon more than doubled production to 1.3 mboepd from 2023. Full merger effects are expected in Q3.

• Champion Iron Ore, also known as Champ, is a premium producer in the iron ore sector with potential for increased attention over time.
• Adriatic Metals is ramping up production at their Vares silver-zinc polymetallic deposit in Bosnia, but facing challenges with cash flow and development rates.
• Cash flow issues, teething problems with mining services, and logistical challenges are hindering Adriatic’s ramp up, but they are on track to reach their nameplate by Q4.

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

• HWKN reported fiscal first quarter (June) where the water treatment business surpassed the industrial segment in sales and helped HWKN exceed our earnings estimate. 
• The water treatment business has grown through acquisition to a point where the segment has become a dominant portion of HWKN’s sales. 
• A higher earnings profile for HWKN and earnings continuing to grow in fiscals 2025 and 2026 leads us to raise our price target to $122 from $96.

• FY03/25 sales increased 29.3% YoY, with Electronics segment sales at JPY21.5bn (+36.6% YoY) and Medical and Pharmaceuticals at JPY8.3bn (+12.6% YoY).
• Operating profit grew 83.2% YoY, driven by yen depreciation and increased sales of high value-added white dry films.
• Full-year FY03/25 earnings forecasts revised: Sales JPY116.1bn (+10.8% YoY), Operating profit JPY20.6bn (+13.2% YoY), Net income JPY13.8bn (+59.5% YoY).

• Low natural gas prices benefit AM and AR due to their low-cost structure and hedging program
• AR has improved its financial position by reducing debt and improving liquidity
• AM’s partnership with AR provides stability and growth potential, making it an attractive investment option for investors looking for dividend yield and capital appreciation.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• CMP’s Q1 FY03/25 sales were JPY29.1bn (+9.8% YoY), with notable increases in marine, industrial, and container paints.
• Operating profit was JPY3.4bn (+62.3% YoY), recurring profit JPY3.9bn (+61.9% YoY), and net income JPY4.9bn (+186.2% YoY).
• Profits increased in all regions, with sales up YoY in Japan, South Korea, and Southeast Asia, but down in Europe and the US.

• As expected, the rate of the Energy Profits Levy (EPL) will increase from 35% to 38% and the 29% investment allowance introduced with the EPL will be removed.
• The changes will be effective from 01 November 2024 and run until 31 March 2030.
• The government has also signalled that capital allowances (including first year allowances) in relation to the EPL will be reduced, but has said that the extent of this will be established after consultation with stakeholders and published in the 30 October fiscal event.

• Independent consultants have calculated that each of the three reservoirs encountered at Welchau (Reifling – 128 metres, Steinalm -118 metres and the Guttenstein – 111 metres) are hydrocarbon bearing with uncertainty on the hydrocarbon type.
• Laboratory work on the Steinalm reservoir has confirmed the full properties ofthe 43° API light sweet oil that was recovered in an MDT sample run in the Steinalm Formation.
• The vertical extent of this light oil in the Steinalm or in the shallower Reifling and deeper Guttenstein is uncertain and there is no clear evidence of a hydrocarbon-water contact in any of the reservoir formations based on the open hole wireline log data.

• Just shy of three years ago, BHP (BHP AU) announced the unification of its dual-headed corporate structure to make BHP “simpler and more agile”.
• Collapsing DLCs/share-classes was all the rage back then. The prior year, Unilever (UNA NA) collapsed its DLC; and Royal Dutch Shell  unified its A and B lines in 2021. 
• Rio (RIO AU/LN) is one of only a handful of remaining DLCs. Renewed investor calls to unwind the DLC and the recent UK’s listing regime reform necessitate a rethink.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Vedanta Resources

• Shell forecasts a decline in upstream production, gas price realisations, and refining margins. Its QoQ Revenue & EPS are expected to drop 4.3% and 21.7%, respectively.
• Shell anticipates Q2 post-tax impairments of USD 1.5 to USD 2 billion due to halting a biofuels plant in Rotterdam and divesting its Singapore refinery.
• On a brighter note, Shell anticipates higher chemical margins, increased marketing sales volume, and improved refinery utilisation rates in Q2.

• Weakness Persists: Iron ore prices hovered at critical support level of $100/ton on consistent ample supply & weak demand driven by China’s slowing manufacturing sector.
• Options Market Shift: Despite overall bearish sentiment, the options market showed increased call activity, particularly for front-month expiries, indicating potential short-term bullish speculation.
• Production & Supply Outlook: Major producers like Vale & Rio Tinto are expected to increase iron ore output, contributing to a bearish outlook due to ample supply in global markets.

• What you need to know: • The Company provided an exploration update on the Omai Gold Project with development goals laid out in this release.
• • Since our last note, Omai raised $13M in a private placement which closed on June 20th and sets the Company up for the next two years of project development.
• • On July 2nd, Omai commenced a 10,000m drill program with the goal of expanding the overall mine plan (by way of resource growth) and began many of the baseline studies required for permitting and engineering.

Nabaltec is a leading global producer of functional fillers and specialty alumina, serving a wide range of growing end-uses including halogen-free flame retardants and electric vehicle (EV) battery separators. The company’s strong product focus, technical product support and customer relationships are key differentiators. It has a healthy balance sheet and is able to exploit potential growth in the high-growth boehmite and data centre markets. Nabaltec trades at a 47% discount to peers on FY24e EV/EBITDA and a 32% discount on FY24e P/E. We initiate our coverage with a valuation of €29.9 per share, 93% above the current share price.

• • The first CN Horizontal well (CNB HZ-1) is currently flowing at a rate of 2.22 mbbl/d (oil) with an IP30 rate of 2.65 mbbl/d (1.32 mbbl/d net).
• • The well is performing better than expected.
• We forecast IP90 rate of only 1.5 mbbl/d.

• Revenue for Q2 2024 was JPY81.6bn (+6.0% YoY), with operating profit at JPY7.3bn (+54.3% YoY).
• Full-year FY12/24 forecast revised upward: revenue JPY170.0bn (+6.7% YoY), operating profit JPY15.5bn (+24.0% YoY).
• Interim and year-end dividends increased, projecting a full-year dividend of JPY60.0 per share, up JPY7.0 YoY.

• Revenue for Q1 FY03/25 increased by 3.2% YoY to JPY26.8bn, with a gross profit of JPY5.2bn.
• Operating profit for Q1 FY03/25 decreased by 3.2% YoY to JPY956mn, and recurring profit fell by 2.9% YoY to JPY1.0bn.
• SG&A expenses for Q1 FY03/25 rose by JPY182mn YoY to JPY4.3bn, driven by increases in salaries, freight, and bonuses.

On 29 July, Pan African Resources (PAF) announced it had produced 186,039oz gold in FY24 at an all-in sustaining cost (AISC) of US$1,350/oz. This was within the previously guided range of 186–190koz at an AISC of US$1,325–1,350/oz and was 212oz (0.1%) above our expectation of 185,827oz. Production guidance for FY25 was reiterated at 215–225koz (cf Edison’s unchanged and relatively conservative forecast of 216.6koz). Our financial forecasts for FY24 remain little changed as a result of PAF’s announcement. However, we have increased our forecasts for FY25 to reflect the gold price remaining high into H2 CY24.