In today’s briefing:
- Greatview Aseptic (468 HK): Rival Purchases And Grandstanding
- ITMG – Div Yield >28%, Net Cash 40% of Mkt Cap, Deep Value with High Coal Price
- Freeport-McMoRan: Major Drivers
Greatview Aseptic (468 HK): Rival Purchases And Grandstanding
- After Greatview Aseptic (468 HK) was suspended on the 30 January, it emerged that Shandong Xinjufeng (301296 CH) had entered a SPA to acquire Jardine Matheson (JM SP)‘s 28.22% stake
- Greatview has now confirmed the transaction. Shares were supposed to resume trading this afternoon but were immediately suspended again.
- Importantly, Inner Mongolia Yili Industrial Group (A) (600887 CH), Xinjufeng’s largest customer is a main competitor of Greatview’s largest customer. That may be an untenable situation, according to the announcement.
ITMG – Div Yield >28%, Net Cash 40% of Mkt Cap, Deep Value with High Coal Price
- We expect a 10,000-12,000 Rph dividend for FY22 (div yield 28%-33%) from Indo Tambangraya Megah (ITMG IJ) as earnings are set to improve >70% HoH (H1 dividend – 4128 Rph/share).
- With coal prices remaining elevated, if volumes remain flat YoY, we could see >50% of the stock price returned in dividends throughout FY22e/23e.
- There is an excellent margin of safety, with almost 40% of the market capitalization in net cash. With a >65% payout ratio, we will see cash levels build further.
Freeport-McMoRan: Major Drivers
- This was a strong quarter for Freeport with the company managing an all-around beat.
- Indonesia’s operations by PT Freeport Indonesia are characterized by very low costs due to the gold content and the grades, large volumes, and the world’s largest goldmine is a byproduct.
- In the quarter, gold and copper sales exceeded the guidance of the company and the company generated strong margins.
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