Daily Brief Energy/Materials: Asia Cement China, Boss Energy, Southern Energy Corp and more

• Chinese cement play Asia Cement China (743 HK) (ACC) is currently suspended pursuant to the Takeovers Code.
• Asia Cement (1102 TT) has been ACC’s majority shareholder since its 2008 IPO. Asia Cement currently holds 73.07%. 
• Shares gained ~50% this week. On serious volume. With net cash of US$1.03bn vs. a market cap of US$66mn, a privatisation should command a punchy premium to the last close.

• Asia Cement China (743 HK) entered a trading halt based on the Hong Kong Code on Takeovers and Mergers. Bloomberg reports that Asia Cement (1102 TT) is considering a buyout. 
• Privatisation interest is unsurprising, as ACC’s EV has been negative since 6 July 2022 due to headwinds from the weak Chinese property sector and uncertainty about cash use.
• An offer price of HK$5.18 would imply a zero EV. However, due to the difficult trading conditions, we think an offer would be around HK$4.00 per share.

• Boss Energy, an Australian uranium producer, saw a significant drop in stock price following the sale of shares by three directors.
• The directors sold a substantial amount of their stock, representing 83%, 63%, and 63% of their ordinary shareholdings respectively.
• The high volume of trading on the stock on the day of the sale has raised concerns about the timing and implications of the director’s actions during a critical phase of the company’s life cycle.

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

• 1Q24 production of 3,009 boe/d was in line with our forecasts.
• The net debt at the end of March was ~US$1 mm below our expectations.
• We continue to assume that the 2nd DUC will not be completed before 4Q24 with the further DUCs being completed in 1Q25 and 2Q25.