Daily Brief Energy/Materials: Gridwiz, ChampionX , Ecovyst, Eni SpA, Vale and more

• Gridwiz is getting ready to complete its IPO on KOSDAQ in June. Gridwiz focuses on the power demand resource management (DR) business, involving utilities, energy storage system, and solar power.
• The IPO price range is from 34,000 won to 40,000 won. The IPO offering amount ranges from 47.6 billion won to 56 billion won. 
• According to the bankers’ valuation, the market capitalization post listing is expected to reach 285 billion won to 335 billion won. 

• ChampionX (CHX) is an underappreciated business in the oilfield services sector, offering a 10% 2025 FCF yield and potential for annual FCFPS growth of over 10%
• CHX was formed from the merger of two industrial companies’ O&G businesses, making it a higher quality, lower volatile oilfield services company with strong management
• With over 75% of EBITDA tied to production, CHX operates more like a specialty chemicals company and has consistently outperformed peers on key metrics such as ROIC, margins, and FCF conversion

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• ECVT reported first quarter results exhibiting the ability to generate free cash flow during a seasonally slow period of the year. ECVT grew its cash balance by approximately $14.7 million.
• ECVT’s management has yet to change its tune regarding the outlook for the year with expectations there would be pockets of softness
• ECVT reported adjusted EBITDA of $45.5 million compared to our forecast of $46 million. ECVT is expected to show sequential improvement from first quarter levels

• Eni’s first-quarter 2024 earnings showed impressive results with the company reporting pro forma EBIT of EUR 4.1 billion and cash flow from operation of EUR 3.9 billion.
• With a production growth in upstream of 5%, and substantial contributions from Enilive and Plenitude, the company has demonstrated substantial resilience against the broader market downturn.
• The strong cash conversion and disciplined capex have kept capital gearing within Eni’s target range even after the completion of Neptune deal and the share buyback program of 2023.

• Vale S.A. posted solid results for the first quarter of 2024, echoing a promising start with a range of laudable accomplishments amid some challenges.
• The Brazilian multinational showed serious commitment to safety and delivered encouraging results with a 77% reduction in accidents for some critical activities through technological advancements and innovative strategies.
• The de risking strategy furthered with the key Peneirinha dam receiving safety certification.