Daily Brief Energy/Materials: Greatview Aseptic Packaging, Indo Tambangraya Megah, Freeport Mcmoran and more

In today’s briefing:

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.

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.

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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