Energy & Materials Sector

• The proposed Hella Infra Market transaction is an backdoor listing of a ₹25,000 crore private unicorn using its ₹730 crore listed subsidiary, Shalimar Paints, as the public vehicle. The share-swap deal, valued at ₹10,439.9 crore at an issue price of ₹85 per security, bypasses the rigorous price discovery and disclosures of a traditional IPO.
• Section 19 of the Companies Act, 2013 creates a major voting power shift. While Hella’s existing 52.85% stake in Shalimar is legally protected under the pre-existing holding exception of Section 19(1)(c), the second proviso strips these shares of voting rights once Hella becomes a subsidiary. Active voting power shifts entirely to the 185 Hella investors receiving new equity and the public minority.
• The transaction faces significant execution and regulatory risks, chief among them being the SEBI related-party transaction (RPT) approval. Because Hella is the promoter, the deal requires “majority of minority” approval from public shareholders. Furthermore, the planned ₹1,000 crore QIP is highly ambitious given Shalimar’s historical cash burn and its widening Q1 FY27 net loss of ₹21.26 crore.

• A review of recent events/data impacting our investment themes and outlook
• Rate hike expectations in the United States continue to fall
• July is forgotten as speculation returns in the AI space

• Eastman Chemical Company reported second quarter 2026 financial results characterized by solid volume growth in Advanced Materials (AM) and operational improvements across its segments, though the company continues to navigate a challenging macroeconomic environment and volatile input costs.
• Advanced Materials posted approximately 5% volume growth year-over-year, driven primarily by innovation-led wins and increasing contributions from its circular (Renew) product portfolio.
• About half of the segment’s revenue growth in the first half derives from Renew and specialty businesses respectively.

• PBF Energy reported strong second-quarter 2026 results amid a highly disrupted global oil market characterized by significant geopolitical tensions, notably ongoing conflicts in the Middle East and Eastern Europe.
• These events led to a substantial dislocation in crude supply routes and reduced global refining capacity by an estimated five million barrels per day, contributing to tight product inventories and elevated refining margins.
• The company emphasized its strategic advantage stemming from its flexible crude slate and geographic proximity to stable crude supplies in the Americas, which allowed it to maintain uninterrupted operations despite global supply challenges.

• This is our inaugural issue of Korea Corporate Value Up Weekly. There were 12 companies in Korea that provided corporate value up announcements in the past week (ending 14 August).
• Corporate governance improvement is one of the most important factors among companies in Korea. By closely tracking these announcements in more detail, this could potentially result in extra alpha generation. 
• Among these 12 companies, two of them outperformed KOSPI which included GS Holdings (078930 KS) (up 18.3%) and Shinsung Eng (104110 KS) (up 11.6%). 

• H1 FY26 EBITDA rose 27% to $2.84bn on a 36% higher realized copper price, with margin widening five points to 63.4%, among the sector’s highest.
• Group copper guidance cut to 625-655kt on the Los Pelambres weather event, but every asset-level line, gold, molybdenum, and capex guidance is unchanged.
• FY26e EV/EBITDA of 8.6x falling to 7.6x FY27e, P/E 25.7x to 22.5x, on FY27e copper sales of 762.5kt.

• In the context of yesterday’s discussion, we are increasingly confident that our long-standing estimated trading range for the prompt NYMEX crude oil contract will remain intact.         
• Once again, our estimated peak has been around $88.00 per barrel with the trough at roughly $68.00 per barrel.                       
• In terms of the trough, our Base Case still expects the fourth quarter to average $68.25 per barrel, versus a temporary bottom during any period of volatility.                

• Asia and China accounted for 55% of global supply, maintaining a share above 50% for the ninth straight month despite lower regional output.
• Global demand rose by more than 4% in May, but growth slowed to its weakest pace in 11 months as stock-building eased.
• The global surplus held below year-earlier levels for the eighth time in nine months, with the January-May surplus down by about 35% from the same period in 2025.

• Oil futures were drifting lower on Thursday as a sharp increase in US crude inventories and weaker global demand forecasts offset continuing supply concerns linked to restricted traffic through the Strait of Hormuz.
• At 2020 London time Oct26 ICE Brent was down 2.4% at $86.88 / b , while Sep26 NYMEX WTI dropped $2.6% to  $81.09/b .
• The declines had narrowed from earlier in the Asian session after Brent and WTI fell by more than 2%.

• Shell isn’t abandoning the energy transition. It is reallocating capital toward gas, LNG and upstream, betting that stronger returns can finally close its valuation gap with US peers.
• Under Wael Sawan, Shell has been focusing on tighter capital discipline, bigger buybacks and fewer low-return green assets, with growth centred on gas.
• Shell’s green retreat is less about abandoning renewables and more about following returns. The bigger question is whether this sharper strategy can finally unlock a U.S.-style valuation.

• Shalimar’s board approved a share-swap investment in Hella Infra Market, issuing up to 41.70 crore equity shares and 81.12 crore CCPS at 85, together worth ~10,439.9 crore in non-cash consideration.
• Hella/Infra.Market is vastly larger than Shalimar. Hella shareholders are reported to emerge with more than 77% of Shalimar, making the listed paints company the public-market vehicle for the enlarged platform.
• The stock is no longer an earnings-turnaround story alone. Valuation now depends on Hella stake actually acquired, swap ratio, CCPS conversion, cross-holding treatment, QIP dilution and the eventual legal “unification”.

• Hess added roughly 455 MBOED from Guyana and the Bakken, accounting for most of Chevron’s 20% production growth and sharply lifting international upstream earnings.
• Chevron delivered USD 1.5 billion in annual Hess synergies, 50% above its original target, while reaching USD 3 billion in structural cost savings six months early.
• Hess was the biggest driver of Q2, but higher oil prices and one-off gains also helped. The key test is whether Chevron can sustain these gains.

• Tata Steel is moving beyond captive mining at higher cost, weighing ownership against economics and keeping flexibility to source ore wherever returns are better.
• The company is targeting approval-based, high-specification markets such as shipbuilding, oil & gas, and data centres, where specialised products are less commoditised and offer greater value capture.
• UK operations are edging closer to EBITDA breakeven as steel prices rise, while the Netherlands remains weighed down by weak demand, elevated inventories and regulatory hurdles.

• Hangzhou CIEC’s IPO is driven by severe liquidity and working capital pressures, as evidenced by its massive operating cash flow deficit of -RMB 4.82 billion in 2025 and -RMB 2.27 billion in the first five months of 2026. The urgent August 11, 2026 HKEX refiling—just days after the initial February application lapsed—highlights the immediate need to unlock offshore credit lines.
• The reported gross margins of 0.6% in 2025 are highly deceptive because the company’s core business relies on basis trading (基差交易). While physical transactions are recorded at razor-thin margins, the true economic spread is captured in the derivative books, which yielded RMB 2.08 billion in 2025 but swung to a RMB 584 million loss in early 2026 due to extreme commodity price volatility.
• The company’s risk management and hedging framework is under severe strain, as highlighted by the RMB 170.5 million foreign exchange loss in 2025 and a further RMB 151.5 million loss in the first five months of 2026. High leverage (asset-liability ratio of 81.74% as of May 2026) and a massive inventory buildup of RMB 23.20 billion as of June 12, 2026, expose the company to significant market downcycles.

• Cargo loadings from Taiwan slowed, after a surge in shipments in late July and early August, with one cargo moving to China in recent days.
• A cargo loaded from South Korea in second-half June  and reached Brazil in recent days, after a stop in South Africa.
• A large cargo loaded from Singapore in the past week before heading to Fujairah, UAE, set to arrive in second-half August; it is the first such shipment to the UAE since March.

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
• In this insight, we take a look at the potential ADDs and DELs leading the rankings for the semiannual index rebal event in December 2026.
• Currently, we see 30 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

• The Cygnus Metals (CY5 AU) IE considers Central Asia Metals (CAML LN)‘s offer (0.06 CAML Shares per Cygnus share) fair and reasonable.
• The key conditions are Cygnus shareholder (scheme), regulatory (Kazakhstan) and CAML shareholder (ordinary resolution) approvals.
• Despite heated debates on retail forums, the scheme vote is low risk due to low retail ownership and significant irrevocables (28.63% of the outstanding shares). 

• Q1FY27 delivered record earnings, while mining’s share of consolidated revenue fell to 44% as value-added products, MDO services and copper gained scale.
• Iron ore is increasingly becoming the cash engine funding downstream steel expansion and a much larger copper-cobalt platform across Surya Mines and Chemaf.
• Lloyds Metals should increasingly be evaluated as a diversified metals platform, though copper-cobalt remains an execution story until production scales and turns profitable.

• Hangzhou CIEC Group is a leading state-owned commodity trading service provider in China, with significant market shares in ferrous metals, iron ore, and rubber trading. The company operates a diversified business model across more than 290 commodities and has an extensive global network.
• The company filed for a Hong Kong IPO in February 2026, seeking to raise capital for strengthening working capital and enhancing its global presence. However, the prospectus lapsed in August 2026, indicating the listing did not proceed as planned. The company remains unlisted, and as such, detailed recent financial data and a public market valuation are unavailable.
• Key strengths include its strong state-owned background, which provides access to capital and stable relationships, and its established ‘One Body, Two Wings’ strategy focusing on trading synergized with supply chain services. However, it operates in a highly competitive, low-margin industry and is exposed to significant risks from commodity price volatility and the cyclical nature of the Chinese economy.

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• Norsk Hydro cut Alunorte’s alumina output to 50% on a gas shortage, sending LME aluminium to a seven-week high and NALCO, Hindalco surging
• Alunorte supplies roughly 3% of world alumina; even a temporary cut tightens a market that was otherwise projected to stay in surplus through 2026 and 2027.
• The move rewards NALCO’s alumina leverage more than Hindalco’s integrated model, but the trade’s shelf life depends on Brazil’s gas resupply timeline.

• Crude oil futures were trading sideways on Wednesday as a huge build in US inventories balanced out a market still watching for signs of a change to restricted traffic through the Strait of Hormuz.
• Oct26 ICE Brent was down 0.2% on the day in a choppy session at  $88.71/b at 2045 BST, while September NYMEX WTI was off 0.4% at  $82.91/b .
• The benchmarks have gained sharply since the start of the week, including an advance of about 5% on Monday, and recorded their highest settlements since 31 July earlier in the session as the nearby Brent contract peaked at $90.09/b before retreating.

• The latest weekly EIA report was extremely bearish for crude oil, but we will reserve final judgment on the overall fundamentals pending another week or two of data.         
• If it marks the beginning of a trend, however, almost irrespective of how long the Strait is “closed,” we may not see materially higher prices from here through end-2026.                      
• The odds are tending to favor, therefore, that we have been correct in stating that the peak in the prompt NYMEX crude oil contract occurred on February 28.  

• Back on the 2nd June, critical metals play Cygnus Metals (CY5 AU) entered into a Scheme with AIM-listed Central Asia Metals (CAML LN).
• CAML is offering 0.06 new CAML shares for each Cygnus share, backing out a A$0.176/share indicative Offer price, or a 60% premium to last close. Clean Scheme.
• The Scheme Booklet is now out, with a Scheme Meeting on the 4th September, and expected implementation on the5th October. The IE (Grant Thornton) says “fair & reasonable“.

• Hangzhou CIEC Group is a commodity trading service provider and trader in China, distributing over 294 physical commodities. The company aims to strengthen working capital, raise business profile, and enhance.
• Hangzhou CIEC Group was the fifth largest commodity trading service provider in China by trading volume and sales revenue in 2025, with a 21.3% trading volume CAGR.
• Revenue was 270,479,007 RMB’000 in 2025, and gross profit decreased by 9.4% to RMB1,721.5 million in 2025.

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• Drilling has begun on the Terrible Creek 21‑2 #2 Cotton Valley test well at Williamsburg, the first of a two‑well programme.
• Southern holds a c.
• 50% WI in both wells, with a net drilling and completion cost of US$3.9 mm, slightly below prior guidance of US$4 mm.

• I provide an update of the potential KOSPI200 rebalance candidates in December 2026.
• The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in December 2026. These 10 stocks are down on average 24.5% YTD vs KOSPI (up 56.1%).
• I also provide five potential inclusion candidates which are up on average 57.6% YTD. 

• Revenue reached INR 2,254 crore and EBITDA INR 296 crore; PAT attributable to Polyplex shareholders turned to INR 91 crore from a INR 19 crore loss.
• The recovery is operational: EBIT swung by nearly INR 288 crore YoY even as other income declined, indicating a genuine improvement in core profitability.
• Turnaround is now visible, but 13% EBITDA margin should not yet be treated as normalized; spreads, utilization and cash conversion need another quarter of confirmation.

• Crude oil futures pared earlier gains Tuesday on reports a US-Iran peace deal was close, after fresh attacks on shipping in the Red Sea and Gulf of Oman pushed benchmarks higher.
• Oct26 ICE  Brent futures were up 1.3% from Monday’s close at $88.89/b at 2022 BST, having earlier topped $90/b, while Sep26 NYMEX  WTI was 1.4% higher at higher at  $83.24/b .
• Benchmarks softened after Pakistan signalled progress on an Iran-US deal that could see commercial shipping return to the Strait of Hormuz.

• Oil market participants are now trying to decide if the prompt NYMEX crude oil contract can challenge the upper end of our previously delineated trading range.          
• We will see over the next few days whether traders are anticipating “duration,” i.e. a further tightening of the market, or renewed strikes if President Trump’s patience runs out again.                     
• We will be so bold to suggest that the “duration” scenario would imply a slow and progressive rise in oil prices, whereas the military scenario would imply increased volatility.              

• In 1H FY12/26, the company achieved revenue of JPY19.5bn, operating profit of JPY3.5bn, and net income of JPY2.4bn.
• Agrichemicals field revenue was JPY8.1bn, with strong domestic and overseas sales of plant protection materials and green products.
• Fertilizers and biostimulants field revenue reached JPY11.4bn, with solid performance in domestic and overseas markets like Spain and Indonesia.

• Earnings momentum intact: Consolidated net income rose 50% YoY to PHP2.57bn in 2Q26 on revenue of PHP6.52bn, up 30%, as realized gold at USD4,424/oz offset a 12% volume decline.
• Grade headwind, throughput offset: Maco gold grade fell 26% YoY to 2.49 gpt in lean zones, while tonnes milled rose 20% to 277,284t; Tagbaros drain tunnel targets flooded higher-grade blocks.
• Valuation at PHP14.96; FY26e P/E of 7.8x and EV/EBITDA of 5.5x on estimated EPS of PHP1.85; 1H26 net income of PHP5.39bn is 51% of the full-year estimate.

• Revenue increased by 34.1% YoY to JPY45.8bn, with operating profit up 79.7% YoY to JPY9.4bn.
• Chemicals business revenue rose across core areas, driven by inorganic and fine chemicals, boosting operating profit margin.
• Full-year forecast revised upward, with expected revenue of JPY94.0bn and operating profit of JPY18.0bn.

• International Paper’s second quarter 2026 results indicate a business navigating a complex operating environment with a clear focus on execution, cost optimization, and strategic investment.
• The company reported a 1.7% year-over-year increase in box volumes in North America, with expectations to outpace the industry by approximately 2% for the full year.
• Operationally, mill performance improved by about 500 basis points, and key projects such as the Riverdale machine conversion and the NORPAC acquisition advanced on schedule, reflecting progress on the company’s 80/20 portfolio rationalization strategy.

• HELLENiQ ENERGY is strategically pivoting from a traditional refining and marketing company to an integrated energy group, with significant investments in renewable energy under its ‘Vision 2025’ plan, aiming to de-risk its business model from the volatility of the oil and gas sector.
• The company maintains a dominant position in the Greek and Southeast European downstream sector, operating three of the region’s key refineries. This provides a stable, albeit mature, cash flow base to fund its energy transition initiatives.
• Financial performance is intrinsically linked to volatile refining margins and oil prices, leading to fluctuating profitability. However, the company has demonstrated a commitment to shareholder returns through consistent dividend payments, supported by a recent period of strong operational performance.

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• Avery Dennison reported solid financial results for the second quarter of 2026, demonstrating continued growth across key metrics despite a complex inflationary and geopolitical environment.
• The company posted 8% organic sales growth, with adjusted earnings per share (EPS) rising 19% year-over-year to $2.89.
• This performance was partly supported by customer inventory prebuy activity, especially in the Materials Group, which contributed approximately half of the organic growth in the quarter and added an estimated $0.25 per share to earnings.

• Since the last reshuffle (July 9), our Model Portfolio has appreciated 1.46%. MSCI Asia ex Japan index (MXASJ) has dropped 1.77%. AI infrastructure stocks primarily contributed to the portfolio drawdown.
• Focus on AI “picks and shovels” providers, industrials, defense, industrial metals and banks remain. We also like Indian automobiles. We replace Hyundai Engineering and Construction with HD Hyundai Heavy Industries.
• We are overweight on HK/China, Korea and India. We are underweight Taiwan but overweight Taiwan technology. We are Neutral ASEAN.

• APC has traded above its $18 IPO price for most of its first six months, reaching $21.72 before settling back toward $19. 
• Q2 revenue beat expectations, though EPS missed; management reaffirmed 2026 Adjusted EBITDA and cash-flow guidance. 
• The planned U.S. Petroleum Partners acquisition adds 400+ wholesale locations and reinforces APC’s growth-oriented strategy.

• AGC released initial Phase 1 drill results from two holes totalling ~764m of drilling, which are part of 2026’s broader 42,000m program.
• Results confirm mineralization extends below the current Inferred pit shell and remains open at depth.
• The Company expects a further two drill rigs to arrive on site in August allowing for the commencement of Phase 2 drilling.

• Pembina Pipeline Corporation reported second quarter 2026 results with adjusted EBITDA of $1.064 billion, marking a 5% increase over the same quarter in 2025.
• This growth was supported by a strong operational performance across its Pipelines and Facilities divisions, and higher marketing business results.
• However, these gains were partially offset by the impacts of a new toll structure and revenue sharing mechanism implemented for the Alliance Pipeline.

• Copper output held at 17,315 tonnes with Tucumã throughput up 27%; Xavantina gold recovered 170% QoQ, lifting operating cash flow 49% to $137.9 million.
• Deleveraging remains the story: net debt fell to $452.7 million (0.8x EBITDA), while copper production and cost guidance were reaffirmed for the full year.
• Shares are up >35% since our initiation in May (Ero Copper (ERO US): A 4.5x EV-EBITDA Pure Copper Play With Growth Is Rare), but still 6x EV-EBITDA.

• LME and SHFE inventories have plunged 42% and 84% from their peaks, respectively, while COMEX stocks hit 653 kt as traders front-load shipments ahead of potential US tariffs.
• COPX attracted USD 62 Mn of inflows across two trading sessions following a USD 20.2 Mn outflow, as the Fed’s decision to hold interest rates revived investor confidence.
• Glencore’s adjusted copper EBITDA is expected to accelerate by 62% in FY26, while a potential ASX listing could strengthen capital access and unlock fresh M&A opportunities.

• Given yesterday’s rally, oil market participants may believe, correctly in our view, that the Strait of Hormuz will be “closed” indefinitely
• In addition, however, some funds also believe, also possibly correctly, that President Trump will lose patience with “waiting it out” and launch major military strikes down the road.                    
• We have pulled our recommendation to buy NYMEX CL calendar spreads because the market now believes that the stalemate will last longer than anticipated.             

• Huaxin Cement is aggressively pursuing an overseas expansion strategy to counteract the slowing domestic Chinese market, with significant recent acquisitions in Africa and Southeast Asia.
• The company is diversifying its business beyond traditional cement and concrete into higher-growth areas like aggregates, environmental services (waste co-processing), and new building materials.
• While facing headwinds from China’s property downturn and intense domestic competition, Huaxin’s focus on international growth, operational efficiency, and sustainable practices positions it as a key consolidator in the global cement industry.

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• Carpenter Technology Corporation reported a fourth quarter and full fiscal year 2026 marked by record financial performance, driven by strong operational execution and growing demand in key end-use markets.
• The company achieved a quarterly operating income of $206.9 million, an 11% increase sequentially and 37% higher year-over-year, setting a new quarterly record.
• This was primarily supported by the Specialty Alloys Operations (SAO) segment, which delivered a notable adjusted operating margin of 37.8%, up from 35.6% in the prior quarter and 30.5% one year ago.

• CRH plc reported a robust second quarter for 2026, exhibiting growth across key financial metrics amid ongoing macroeconomic and geopolitical uncertainties.
• The company recorded total revenues of $10.8 billion, marking a 6% increase from the previous year, alongside adjusted EBITDA rising 7% to over $2.6 billion.
• Diluted earnings per share grew by 14%, benefiting partly from a $0.16 per share net gain on divestitures.

• Canaf is a $14.9M market cap business with $9.8M in net cash that earned $2.3M in 2025.
• The CEO is redeploying capital derived from a South African commodity business into higher-return opportunities.
• I believe margin expansion and continued growth are inevitable, which should lead to an aggressive rerating.

• SOLV priced at the high end, opened 20% higher and subsequently completed a heavily demanded upsized follow-on at $36.00.
• Revenue, margins, EBITDA and backlog all accelerated sharply following the IPO, reinforcing the company’s infrastructure growth story.
• The stock’s pullback reflects a broader rotation from AI infrastructure, but renewed enthusiasm could quickly put MWH back in favor.

• Valero Energy Corporation reported a robust second quarter in 2026, driven by strong operational and commercial performance across its refining, renewable diesel, and ethanol business segments.
• The company’s refining operations delivered an operating income of $4.5 billion, a substantial increase over the prior year’s $1.3 billion, with throughput volumes averaging 3 million barrels per day.
• This performance was supported by resilient demand for transportation fuels amid volatile geopolitical and macroeconomic factors.

• Hubei Dinglong (HDLNG HK) , aims to raise at least US$750m in its H-share listing.
• It provides upstream integrated materials and solutions for the semiconductor and other high-tech industries in response to the broad and growing demand for supply chain localization and technology roadmaps.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Royal Dutch Shell plc reported a strong second-quarter performance driven by operational excellence, strategic portfolio management, and active cost discipline amid volatile market conditions.
• The company’s Pennsylvania Petrochemicals Complex delivered its best results to date, and its refineries operated at a record 102% utilization during a high-margin period.
• Shell’s ability to adapt production toward middle distillates such as jet fuel reflects the strength of its integrated model, optimizing value across its assets and markets.

• The company is laser-focused on turning around, and the team managed to do that. 
• Valuations have normalized, and earnings guidance has improved thanks to the Sims Lifecycle services’ growing activities. 
• The trend for hyperscalers like Alphabet (GOOG US) , Amazon (AMZN US) and Microsoft Corp (MSFT US) replacing their older server racks for new ones is not ending anytime soon. 

• Sales increased by 13.3% YoY to JPY593.0bn, with operating profit rising 92.2% YoY to JPY51.9bn.
• Recurring profit rose 157.7% YoY to JPY52.3bn, and net income attributable to owners increased 184.1% YoY to JPY37.2bn.
• DIC revised its full-year forecast, expecting sales of JPY1.14tn and operating profit of JPY78.0bn.

• In last Friday’s report we suggested that we were back to “square one,” i.e. the MOU, in terms of Iran’s demands before the Strait of Hormuz is “opened.”
• President Trump stated that he is willing to let economic pressure on Iran be the deciding factor, and therefore we would assume no resumption of military strikes against Iran.  
• Based on what we believe Tehran can tolerate, therefore, the odds appear high that the stalemate could continue through at least the end of 2026.         

• Cotton has rallied hard over the past couple of weeks.
• The primary driver has -not yet – been a dramatic supply shock.
• Hedge funds had been net short for nearly two years; that positioning began reversing in April, and short-covering into fresh long-buying has done most of the work since.

• IAMGOLD is successfully transitioning into a significant mid-tier gold producer, driven by the ramp-up of its new, large-scale Côté Gold mine in Ontario, Canada, which is set to become a cornerstone asset.
• The company is experiencing a dramatic improvement in its financial position, with record cash flow generation fueled by strong production and historically high gold prices, enabling debt reduction and shareholder returns via buybacks.
• Significant geopolitical risk associated with its Essakane mine in Burkina Faso and operational execution risk at the ramping-up Côté project remain key concerns for investors, counterbalancing the positive production outlook.

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• Leading Independent Producer in a Consolidating Market: AirPower Technologies is the largest independent industrial gas supplier in China, formed through the 2021 merger of Yingde Gases and Baosteel Gases. This scale provides a significant competitive advantage in a market dominated by a few global players, allowing it to serve blue-chip customers across key industrial corridors.
• Strategic Expansion into High-Growth Sectors and Geographies: The company is strategically targeting high-growth end-markets like electronics, healthcare, and clean energy, particularly the hydrogen sector. Furthermore, its expansion into Southeast Asia and affiliation with India-based NovaAir positions it to capitalize on broader regional industrialization.
• Resilient Business Model with Utility-Like Cash Flows: The industrial gases business is characterized by long-term contracts, high switching costs, and recurring demand from a diverse industrial base, which provides a foundation for stable, utility-like cash flow generation. The provided financials from 2018-2020 demonstrate strong growth in revenue, net income, and free cash flow.

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• Australia’s ASIC releases the aggregated short position data four business days after the reporting day. Data in this insight is up to 3rd August, published on the 7th August.
• The largest industry net increase in the past week was A$0.1bn into “Metals“; the largest industry net decrease was A$0.1bn out of “Food Retail“. Net shorts increased A$0.6bn week-on-week.
• Companies mentioned in this regular weekly report include: Rio Tinto Ltd (RIO AU), Wisetech Global (WTC AU), Ampol (ALD AU), DroneShield Ltd (DRO AU), and Develop Global (DVP AU).

• Tanfac Industries is strategically positioned to capitalize on the growing demand for fluorine-based chemicals, driven by high-growth sectors such as renewable energy (solar cells), electric vehicles (lithium-ion batteries), and refrigerants.
• The company is undergoing a significant transformation, shifting its focus from commodity chemicals to higher-value specialty fluorides, supported by its co-promoter Anupam Rasayan India Ltd., which is expected to enhance profitability and market position.
• Recent and planned capacity expansions in Hydrofluoric Acid and downstream fluorinated products underscore the company’s commitment to growth and its ambition to become a more significant player in the specialty chemicals market, with substantial investments aimed at expanding its product portfolio and securing long-term supply agreements with global customers.

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• Dominant Market Leader in a Cyclical Industry: Dongyue Group is Asia’s largest fluorosilicon materials producer, benefiting from a vertically integrated industrial chain. However, the company’s financial performance is subject to significant volatility due to fluctuating product prices and demand cycles in the chemical industry.
• Strategic Focus on High-Growth, High-Value Products: The company is strategically shifting towards high-end applications in new energy, new materials, and environmental protection. This includes expanding production of PVDF for lithium batteries and investing in hydrogen energy materials like proton exchange membranes, which offer higher margins and align with long-term secular growth trends.
• Favorable Regulatory Tailwinds vs. Environmental Risks: Dongyue benefits from policies promoting green technologies and the phase-out of older refrigerants in China. Conversely, it faces stringent environmental protection regulations, which necessitate continuous investment in compliance and could pose operational risks.

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• Styrenix is a leading Indian producer of ABS and SAN resins, key inputs for the automotive and consumer durables sectors, positioning it to capitalize on domestic manufacturing growth.
• The company is undertaking significant brownfield capacity expansions in both ABS and Polystyrene, aiming to more than double its production capabilities by FY28 to capture market share from imports.
• Profitability is subject to volatility in raw material prices, which are largely imported and linked to crude oil. However, the company utilizes formula-based pricing with key customers to mitigate some of this risk.

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• Ellenbarrie Industrial Gases is the largest 100% Indian-owned industrial gas company by manufacturing capacity, strategically expanding its footprint across India to capitalize on the growing demand from the steel, pharmaceutical, and chemical sectors.
• The company is in a significant capital expenditure phase, aiming to increase its total capacity to 4,630 tons per day (TPD) by FY27, a substantial increase from its FY23 levels, with a strong focus on expanding its higher-margin onsite and bulk supply segments.
• While revenue and profit growth have been robust, key risks include the volatility of industrial gas prices, high energy costs which impact margins, and the successful commissioning and ramp-up of new large-scale projects.

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• Revenue increased by 28.6% YoY to JPY21.9bn, driven by strong demand in semiconductor production equipment and aerospace industries.
• Operating profit rose 257.7% YoY to JPY1.4bn, with improvements in order rates, product lineup, and manufacturing capabilities.
• The company revised its full-year forecasts, citing higher-than-expected Q1 results and strong semiconductor-related capital investment.

• Soken Chemical is a high-growth specialty chemicals manufacturer with a strong focus on high-performance acrylic adhesives and functional materials, primarily serving the dynamic electronics and automotive industries.
• The company exhibits a robust financial profile, characterized by impressive net income and dividend growth, alongside expanding profit margins. Future growth is strategically aimed at expanding into ASEAN and Indian markets and developing new applications beyond its core display-related products.
• Key risks include a significant concentration in the cyclical liquid crystal display (LCD) market, particularly in China, and susceptibility to raw material price fluctuations and intense competition within the specialty chemicals sector.

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• Revenue increased to JPY14.0bn, driven by Logistics Solutions and Business Innovation, but profits declined due to lower margins.
• Q1 FY03/27 results showed operating loss of JPY377mn, recurring loss of JPY180mn, and net loss of JPY109mn.
• Revenue from warehouse automation projects was JPY8.3bn, with an operating loss due to low-margin projects.

• Gujarat Fluorochemicals (GFL) is a leading, vertically integrated producer of fluoropolymers and specialty chemicals, positioning it as a key global supplier outside of China.
• The company is strategically expanding into high-growth sectors, including battery chemicals for electric vehicles (EVs), solar, and green hydrogen, with significant capital expenditure planned to capture future demand.
• While near-term performance is influenced by global chemical price cycles and regulatory changes, GFL’s long-term outlook is supported by its diversified product portfolio, backward integration, and exposure to new-age industries.

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• Alamos Gold reported second quarter 2026 production of 130,600 ounces of gold, consistent with revised guidance and reflecting a 5% increase over the first quarter.
• The Island Gold District demonstrated strong performance, offsetting production challenges at Young-Davidson and Mulatos.
• However, a seismic event in June at Young-Davidson caused localized damage to underground infrastructure, restricting access to higher-grade stopes and resulting in lowered mining rates and grades for the remainder of the year.

• Liontown Resources is transitioning from a developer to a significant new producer in the global lithium market, with its flagship Kathleen Valley project now in production and ramping up.
• The company is underpinned by a world-class, long-life asset in a Tier-1 jurisdiction (Western Australia) and has secured foundational offtake agreements with major global players like Ford, Tesla, and LG Energy Solution, de-risking a significant portion of its initial output.
• Key challenges ahead include managing the operational risks of a major project ramp-up, navigating the inherent volatility of lithium prices, and securing funding for future expansions, which creates a high-risk, high-reward investment profile.

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• AIC Mines is strategically positioned as a growth-oriented Australian copper producer with a clear pathway to significantly increase production through the development of its Jericho deposit and the expansion of the Eloise processing plant.
• The company is led by a highly experienced management team with a proven track record of value creation in the mining sector, a key factor in de-risking the execution of its growth strategy.
• While the long-term outlook for copper is robust, driven by global decarbonization trends, AIC Mines’ single-asset concentration at the Eloise mine, coupled with the inherent risks of mine development and commodity price volatility, presents notable risks for investors.

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• Albemarle is a premier global producer of lithium and bromine, uniquely positioned to capitalize on the long-term secular growth trends of vehicle electrification and energy storage.
• The company’s competitive advantage is rooted in its access to world-class, low-cost lithium and bromine resources, particularly its brine operations in Chile and Australia, which provide a significant cost advantage over peers.
• While highly exposed to the volatile nature of lithium pricing, which impacts short-term profitability, Albemarle is implementing cost-cutting measures and disciplined capital expenditure to navigate market cycles and maintain financial health.

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• Alliance Nickel is a development-stage company focused on its 100%-owned NiWest Nickel-Cobalt Project in Western Australia, one of the highest-grade undeveloped nickel laterite resources in Australia.
• The company’s strategy is to become a key supplier of high-purity nickel and cobalt sulphate to the electric vehicle (EV) battery market, leveraging a low-cost heap leach processing method.
• Success is contingent on securing significant project financing (A$1.65 billion CAPEX) and successfully executing the project, with key risks including commodity price volatility and potential construction delays.

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• Integrated Low-Cost Producer with Strong Shareholder Returns: Alamtri Resources Indonesia (ADRO) stands as a leading, low-cost Indonesian coal producer with a vertically integrated business model, ensuring operational efficiency from mine to port. The company has a strong track record of returning value to shareholders through high dividend payouts, making it an attractive proposition for income-focused investors.
• Strategic Diversification into Green Energy and Minerals: Management is actively pursuing a long-term transformation by diversifying into non-coal businesses, including aluminum smelting and renewable energy projects (hydro, solar, wind). This strategy aims to mitigate risks associated with the global energy transition and capture growth in sectors supporting a green economy.
• Navigating Headwinds from ESG and Coal Price Volatility: The company’s earnings are highly sensitive to cyclical coal prices, which have been normalizing from recent peaks. Furthermore, ADRO faces significant long-term headwinds from the global shift away from fossil fuels, increasing pressure from ESG-focused investors, and potential regulatory changes in Indonesia.

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• Aggressive Expansion and Market Position: Now part of the Adani Group, Ambuja Cements is pursuing an aggressive capacity expansion strategy through both organic and inorganic routes, aiming to reach 140 MTPA by FY28. This positions it as the second-largest cement producer in India, well-placed to capitalize on the country’s robust demand from housing and infrastructure sectors.
• Focus on Cost Leadership: Management is intensely focused on driving down operating costs. Key initiatives include optimizing the fuel mix, increasing the use of alternative fuels and renewable energy, improving operational efficiencies through digitalization, and leveraging group synergies in logistics and procurement. The company is targeting significant cost savings per ton over the next two fiscal years.
• Near-Term Headwinds vs. Long-Term Growth: While the long-term demand outlook for Indian cement remains strong, the company faces near-term challenges from rising input costs (fuel, raw materials), intense competition, and a potential moderation in demand growth. The successful integration of recent acquisitions and execution of its cost-saving strategies will be critical to navigating these pressures and improving profitability.

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• Andean Precious Metals is demonstrating a strong growth trajectory, evidenced by a 106.4% 3-year market cap CAGR and a 144.2% 3-year net income CAGR, supported by robust production from its San Bartolomé asset and the recent acquisition of the Golden Queen mine.
• The company maintains a solid financial position, with over $200 million in liquidity reported in Q1, providing significant flexibility for organic growth initiatives, exploration programs, and potential M&A activities.
• Key risks include operational challenges, such as the recent weaker production at the Golden Queen mine due to mine sequencing, and the inherent volatility of gold and silver prices, which directly impacts revenue and profitability.

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• Alliance Resources is an unlisted, pre-revenue mineral explorer whose securities were delisted from the Australian Securities Exchange (ASX) on 19 July 2022 following a compulsory acquisition by Gandel Metals Pty Ltd.
• The company’s principal asset is the 100% owned Wilcherry Project in the Gawler Craton, South Australia, which hosts the Weednanna Gold Deposit.
• The Weednanna deposit has a JORC-compliant Mineral Resource Estimate of 1.106 million tonnes at 4.3 g/t gold for 152,000 ounces, with associated iron ore potential. As an unlisted entity, there is no public market for its shares, and information regarding its ongoing activities and financial status is limited.

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• On the 22 June, AGPH, a wholly-owned subsidiary of AGP Holdco, launched a Tender Offer for 100% of Polyplex (Thailand) (PTL TB) at THB15/share, a 43% premium to last close.
• AGP Holdco also holds ~24.28% in Polyplex Corporation (PPC IN), which holds ~51% in PTL AGPH’s Offer closed on the 6th August with a 18.09% holding in PTL.
• Despite their apparent non-arms length nature, AGPH and PPC are not seen to be acting in concert. Collectively, they hold 69.09%. I’d expect AGP Holdco to return to the well. 

Highlights

• Cambodia’s NR production increases by 90% MoM to 11,200 tons in April

• NR exports rise 106.49% MoM to 15,900 metric tonnes in April

• Prime Minister lays emphasis on contract farming to boost rubber sector

• Rio Tinto delivered a strong financial performance in the first half of 2026, underpinned by robust operational results, ongoing growth projects, and a continued focus on productivity improvements.
• The company reported a 28% increase in underlying EBITDA to $14.8 billion, driven primarily by higher commodity prices—especially copper and aluminum—and a 75% rise in free cash flow.
• These enhancements supported a 43% increase in the interim dividend to $3.4 billion, reflecting a commitment to shareholder returns amid rising earnings.

• Cenovus Energy reported record financial and operational results for the second quarter of 2026, driven by strong upstream production, a supportive market environment, and efficient project execution.
• The company’s upstream production averaged over 970,000 barrels of oil equivalent (BOE) per day during the quarter, surpassing previous records, with oil sands production exceeding 786,000 barrels per day.
• Production momentum continued into July, with monthly output expected to surpass one million BOE per day for the first time, primarily boosted by exceptional performance at the Christina Lake asset, including contributions from the Narrows Lake expansion, which has exceeded expectations with production surpassing 80,000 barrels per day significantly ahead of schedule.

• • 2Q26 production of 22.3 mbbl/d and the end‑June cash balance of US$317 mm were previously disclosed.
• • FY26 production guidance has been narrowed to 20–22 mbbl/d (from 19.5–22.5 mbbl/d), with capex and opex unchanged.
• • Wassana redevelopment is ahead of schedule, and Valeura is evaluating options to accelerate installation and first oil.

• Kinross Gold Corporation reported solid operational and financial performance for the second quarter of 2026, continuing the strong momentum established in the first quarter.
• The company produced 492,000 gold equivalent ounces in Q2, with key contributions from Tasiast and Paracatu mines, together accounting for over half of the production.
• The continued disciplined cost management strategy led to a cost of sales per ounce of $1,336 and all-in sustaining costs (AISC) of $1,821 per ounce, consistent with internal guidance and reflecting efficiency initiatives across the portfolio.

• Chennai Petroleum Corp (CPCL) is a key South Indian refiner poised to benefit from India’s rising fuel demand, though its earnings are subject to high volatility from global crude prices and refining margins.
• Strategic growth is centered on a significant expansion and modernization of its Manali refinery and the development of a new, petrochemical-focused complex at Nagapattinam, aiming to improve margins and de-risk from traditional fuel markets.
• Financial performance is characterized by strong long-term growth but significant short-term cyclicality, as evidenced by fluctuating revenues and net income over the past three years. The company has recently shown robust profitability and has a strong dividend profile, albeit with inconsistent payouts.

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• HPQ Silicon is a pre-revenue technology company developing proprietary, low-cost, and environmentally friendly processes for producing high-purity silicon, nano silicon materials, and fumed silica.
• The company’s primary technology, the PUREVAP™ Quartz Reduction Reactor (QRR), aims to produce high-purity silicon in a single step, potentially disrupting a market reliant on a century-old, energy-intensive process.
• While holding significant disruptive potential in high-growth markets like EV batteries and semiconductors, the company faces considerable execution risk, has a history of net losses, and its commercial-scale viability remains unproven.

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• Advanced Echem Materials (AEM) is a key supplier of specialty chemicals, primarily photoresists, strategically positioned within Taiwan’s dominant semiconductor ecosystem, capitalizing on the industry’s growth driven by AI, 5G, and high-performance computing.
• The company has demonstrated exceptional financial performance, with a 3-year revenue CAGR of 23.3% and a net income CAGR of 37.3%, driven by robust demand and expanding margins. Future revenue growth is forecast to be around 31% p.a. for the next two years.
• Valuation appears stretched, with an EV/EBITDA multiple of 48.2 and a P/E ratio of 62.7, reflecting high growth expectations but also posing significant risk. Key risks include the cyclical nature of the semiconductor industry, intense competition from larger global players, and significant geopolitical risks associated with Taiwan.

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• Active Energy Group (AEG) is a pre-revenue company pivoting from a pure-play biomass technology firm to a diversified energy and digital infrastructure developer.
• The company’s core intellectual property is CoalSwitch®, a patented second-generation biomass fuel designed as a drop-in replacement for coal, though commercial production has not been achieved.
• AEG has launched a new, parallel strategy focused on developing a digital infrastructure platform in the UAE, targeting high-growth sectors like AI computing and Bitcoin mining, which now appears to be the primary focus.

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• Juniper Green Energy Ltd (1831458D IN) raised about US$187m in its India IPO.
• Juniper Green Energy Limited (JGEL) is an independent power producer (IPP) engaged in the development, construction, operation, and maintenance of utility-scale renewable energy projects.
• We have looked at the past performance and valuations in our previous note. In this note, we talk about the trading dynamics.

• Equinox Gold is at a key inflection point, transitioning from a period of heavy investment to significant cash flow generation, driven by its new cornerstone Greenstone mine in Ontario, Canada.
• The company offers substantial production growth from a diversified portfolio of assets across the Americas, positioning it as a significant mid-tier gold producer.
• Key risks include exposure to geopolitical instability in Mexico and Brazil, operational execution at its various mines, and inherent volatility in the price of gold.

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• Entrée Resources offers a unique, carried joint venture interest in the world-class Oyu Tolgoi copper-gold mine in Mongolia, providing direct exposure to a tier-1 asset without direct capital or development requirements.
• The company’s value is intrinsically linked to the successful ramp-up of the Oyu Tolgoi underground mine, managed by Rio Tinto, which is expected to be the world’s fourth-largest copper mine by 2030.
• As a pre-revenue company entirely dependent on a single asset in a high-risk jurisdiction, ETG represents a high-uncertainty investment, with its future cash flows contingent on operational execution by its partners, stable commodity prices, and a consistent Mongolian regulatory environment.

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• While it appears part of our “implausible plausible” scenario may unfold as expected, the critical part, i.e. President Trump accepting it, has yet to unfold.       
• Iran indicated that a deal to “manage” the Strait with Oman is close to consummation, while Tehran has indicated that effectively the U.S. “has nothing to do with it.”                  
• Otherwise, on the trading front, we closed out our short Sep NYMEX RBOB position, booking a near $572,000 gross profit for our model energy portfolio.           

• Deep Yellow is an advanced-stage uranium developer with two key assets, the flagship Tumas Project in Namibia and the Mulga Rock Project in Western Australia, positioning it to become a significant global producer.
• The company is led by a highly experienced management team, and is strategically timed to capitalize on the strengthening uranium market, driven by a global shift towards nuclear energy for decarbonization.
• While the Tumas project is significantly de-risked with a completed Definitive Feasibility Study (DFS) and mining license, key risks remain, including securing project financing, potential for share dilution, and exposure to volatile uranium prices.

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• Earnings still carried by price. Q2 FY26 revenue of $126.9M rose 32% YoY, and net income rose 124% to $32.7M, on realized gold of $4,319/oz.
• Costs broke higher. AISC of $1,589/oz is a two-year peak; free cash flow turned negative at $17.8M on working capital deterioration, and cash fell to $62.3M.
• Valuation is still cheap. At PHP 34.80, OGP trades on 9.9x FY26e P/E, 4.9x EV/EBITDA, and a 10.1% yield, assuming $4,000/oz gold.

• Q1 FY03/27 revenue increased by 14.2% YoY to JPY66.2bn, driven by higher flavor and fragrance sales.
• Operating profit declined by JPY80mn YoY due to higher raw material costs and increased SG&A expenses.
• The Fragrance business saw a 22.2% YoY revenue increase to JPY21.9bn, with operating profit up 138.3% YoY.

• Reliance Industries is a diversified conglomerate with dominant market positions across its core businesses: Oil-to-Chemicals (O2C), Digital Services (Jio), and Retail, making it a proxy for India’s economic growth.
• The company is undertaking a significant strategic pivot towards New Energy, with ambitious plans to become a global leader in solar, battery, and green hydrogen technologies, which represents a major future growth driver but also carries execution risk.
• While the legacy O2C business provides strong cash flows, near-term profitability is challenged by moderating margins and global commodity price volatility, alongside margin pressure in the rapidly expanding retail segment.

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• Alconix operates a hybrid business model, combining the global trading of non-ferrous and rare metals with a growing portfolio of manufacturing subsidiaries acquired through a consistent M&A strategy. This provides a degree of vertical integration and specialization.
• The company is capitalizing on strong demand from high-growth technology sectors, with its Electronic and Advanced Materials and Metal Processing segments driving recent robust performance, particularly from semiconductor and aerospace-related demand.
• Despite a strong recent quarter and an upward revision to its full-year forecast, Alconix faces significant headwinds from potential demand normalization, volatility in commodity metal prices, and persistent weakness in certain end-markets like automotive, which creates a balanced but uncertain outlook.

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• Alcidion has demonstrated a significant financial turnaround, achieving profitability and positive operating cash flow in FY25 after several years of losses. This was driven by record new contract wins, including its largest-ever deal with a UK NHS Trust, highlighting strong commercial momentum.
• The company is strategically positioned in the growing healthcare technology sector with its flagship Miya Precision platform, a modular solution designed to improve clinical workflows, patient flow, and decision support. Recent acquisitions, like the Kyra flow products from Telstra Health, have expanded its customer base and solidified its market leadership in patient flow management in the ANZ region.
• While the company’s growth trajectory and recent performance are strong, it faces risks from intense competition from larger, more established players in the healthcare IT market. Future success will depend on continued innovation, successful integration of acquisitions, and maintaining its high rate of contract renewals and expansions.

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