Daily Brief Energy/Materials: JSR Corp, Lynas Corp Ltd, Lock&Lock, Sherwin Williams Co, Rpm International, State Gas Ltd, Arcadium Lithium , TotalEnergies , Kinder Morgan, MPLX LP and more

• Today after the close, the results of the JSR Corp (4185 JP) Tender Offer were announced. Bidco JICC-02 obtained 84.36% of the shares out in the Tender Offer. 
• That means imminent index downweights, delayed index downweights, and theoretically another selldown on the last day of listed existence. 
• News which came up since the start of the Tender Offer make this a little more difficult than it might have otherwise been. 

• Lynas Corp Ltd (LYC AU) is the proverbial Aussie battler. Post the 2018 general elections, the new Malaysian government put Lynas on notice it may halt it rare-earth operations. 
• Since then, Lynas’ Malaysian facility, which cuts into China’s near-monopoly on processing elements for defense/aerospace/EV/electronics industries, has (mostly) operated without substantial disruptions. Profit peaked in FY22; but has since rolled-over.
• Gina Rhinehart’s Hancock has now disclosed a 5.82% stake in Lynas; having disclosed a 5.3% stake in MP Materials (MP US) earlier this month. Lynas confirmed discussions with MPM in February.

• The tendering price is ₩8,750, roughly 7% higher than the last close. However, Affinity’s commitment makes this event noteworthy.
• Lock&Lock requires Affinity to target 30%. To reach 95%, securing 25% is needed, much higher than SsangYong C&E, indicating potential price volatility.
• A second public offering is likely due to the widening gap between the ownership threshold and actual acquisition percentage in Lock&Lock. This could impact prices significantly during the tendering period.

• Sherwin-Williams Company, a global leader in the paint and coatings industry, reported a promising review of their fourth quarter 2023 results and outlook for the first quarter and full year of 2024.
• The company has experienced positive growth, with sales growing 4.1% to $23.1 billion and adjusted earnings per share growing 18.6% to $10.35 a share.
• Sherwin-Williams demonstrated robust financial performance during the fourth quarter that has resulted in a record year for the company.

• RPM International’s third-quarter fiscal 2024 results marked their ninth consecutive quarter of record sales and earnings before interest and taxes (EBIT) results, driven by the company’s operational improvement initiatives – the MAP 2025.
• This positive momentum was achieved, notwithstanding lower sales volumes in the Consumer and Specialty Products segments.
• Performance Coatings Group and Construction Products Group led sales growth, benefiting from strong demand from infrastructure and building projects.

• With completion, commissioning and a contract secured, first gas is just around the bend.
• Critically, with the company on the cusp of first gas, it holds first mover advantage over peer group projects where first gas may well be 2026 or later.
• We assign a NAV of $198m or $0.72/share (down from $0.74/share due to spot gas price adjustment) to GAS against a reference share price of $0.15/share.

Alongside Albemarle and SQM, Arcadium Lithium is the third largest producer of downstream lithium chemicals outside China, capturing the full value chain from lithium resource to battery-grade lithium chemicals. The company has strong exposure to high value-add lithium products and boasts a pipeline of advanced development projects that could potentially more than triple its lithium capacity by 2030. Thanks to its established low-cost asset base and cash flow-generative business, Arcadium should be one of the main beneficiaries of the current cyclical lithium market downturn. Coupled with its strong growth profile, the company is well-positioned to capitalise on the inevitable recovery in lithium demand, driven by the secular decarbonisation trends.

• TotalEnergies’s latest earnings indicates a strong balance.
• By executing their two-pillar strategy consistently, the firm has demonstrated a significant increase in cash flows compared to the previous year, offering a capacity for growth in energy production.
• TotalEnergies recorded an adjusted net income shareholder share of $23 billion and an IFRS net income above $21 billion in 2023.

• Kinder Morgan’s fourth-quarter earnings conference call highlighted the company’s robust financial outlook for 2024.
• Richard Kinder, Executive Chairman of Kinder Morgan, projected substantial growth in EBITDA, EPS, and DCF per share for the year ahead, supported by exceptional growth expected in natural gas production and demand, primarily driven by LNG exports and exports to Mexico.
• The company’s strategic expansion of its Natural Gas segment through CapEx and acquisitions reportedly contributed significantly to its bottom-line performance.

• MPLX revealed their fourth quarter results for fiscal 2023, accompanied by an updated outlook for 2024.
• Moreover, the commentary also discussed recent growth executed in strategic priorities as well as minor potential acquisitions.
• In terms of 2023 results, MPLX had a strong year throughout, successfully executing its strategic priorities.