In today’s briefing:
- JX Advance Metals IPO: Priced Reasonably but The Timing Isn’t Great
- Gensol Engineering: Forensic Analysis
- German Rubber Industry In The Throes Of Crisis As Relocations Loom
- Vale Indonesia: Q4/24 Earnings Drop on Volume, Nickel Price Decline
- Alamos Gold Inc.: Island Gold District Advancements Signaling Strategic Growth Trajectory!
- Nanshan Aluminium Pre-IPO: Largest SEA Producer but Most of Revenue Comes from Two Customers
- NIM: Draft Permit Received for Dominion Creek Project Bulk Sample
- Nutrien’s Gas Price Advantage: How North America’s Edge Boosts Profits!
- Reliance Steel & Aluminum Co.: Diversified Market Exposure to Solidify As A Robust Player In Industrial Distribution Landscape!
- MEC Co., Ltd (4971 JP): Research Update
JX Advance Metals IPO: Priced Reasonably but The Timing Isn’t Great
- JX Advance has announced the terms for its IPO and set the pricing at ¥810-820 per share, at a much lower pricing range than previously expected ¥862 per share.
- ENEOS is planning to offer 465.2m shares at the IPO raising around ¥377-381bn (US$2.5bn) at a market capitalisation and EV of ¥760bn and ¥857bn respectively.
- Our SOTP valuation suggests that JX Advanced Metals (5016 JP)’s shares are priced reasonably, however, given the negative sentiment over AI and tech stocks, we remain cautious.
Gensol Engineering: Forensic Analysis
- Gensol Engineering (GENSOL IN)’s credit rating was downgraded to default, triggering a 34% stock decline in just five days. ICRA flagged misleading financial disclosures, high promoter pledges raised serious concerns.
- The company is grappling with delayed debt repayments, aggressive accounting policies, and uncertainty in equity infusion, impacting its ambitious EV manufacturing and solar EPC expansion plans.
- Gensol’s governance issues, cross-default risks, and financial opacity create a high-risk scenario for investors. Management must provide clarity on debt servicing, pledged shares, and capital infusion to restore confidence.
German Rubber Industry In The Throes Of Crisis As Relocations Loom
- One in five companies in rubber industry mulling shifting in 2025
- Regulatory burdens and high energy costs among major concerns
- Place ‘first-touch principle’ in EUDR, erase reverse burden of proof
Vale Indonesia: Q4/24 Earnings Drop on Volume, Nickel Price Decline
- Vale Indonesia’s Q4/24 results came in -28% below expectations driven mainly by a revenue decline, as core costs fell, and other expenses and net financing income rose
- The revenue drop was from by a -7.1% decline in volume and -11.5% drop in the nickel matte price, while fuel efficiency improved and fuel costs dropped overall
- The P/B continued to slide in Q4/24 to 0.82, along with an ROE down to 1.0%, but even given the inexpensive multiple, weak nickel could weigh on the stock
Alamos Gold Inc.: Island Gold District Advancements Signaling Strategic Growth Trajectory!
- Alamos Gold’s latest financial performance and potential future trajectory present a mixed picture of strength and challenges.
- The company recently completed a successful year, marked by the acquisition of the Magino mine and the expansion into the Quebec region, establishing a strong foundation for future operations.
- The acquisition of the Magino mine, adjacent to a high-grade Island Gold operation, stands out as an important strategic move that aims to create one of Canada’s largest and most cost-effective gold mining operations.
Nanshan Aluminium Pre-IPO: Largest SEA Producer but Most of Revenue Comes from Two Customers
- Nanshan Aluminium International Holdings (NAI HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO.
- It is a leading high-quality alumina manufacturer in Southeast Asia.
- In this note, we look at the firm’s past performance.
NIM: Draft Permit Received for Dominion Creek Project Bulk Sample
- Nicola announced that it received a draft permit for the 10,000t bulk sample at the Dominion Creek Mineral Project.
- As a reminder, NIM owns a 75% economic interest in the high-grade gold and silver project with its partner High Range Exploration owning the remaining.
- The bulk sample will be processed at Nicola’s Merritt Milling Facility providing a potential third source of ore to the mill by Q3/25.
Nutrien’s Gas Price Advantage: How North America’s Edge Boosts Profits!
- Nutrien’s recent financial results and strategic outlook provide a complex picture of the company’s current standing and future prospects.
- In 2024, Nutrien achieved an adjusted EBITDA of $5.4 billion, reflecting the challenges and opportunities presented by varying market conditions.
- The year saw a decrease in fertilizer prices, which negatively impacted overall earnings despite higher volumes and improved downstream retail performance.
Reliance Steel & Aluminum Co.: Diversified Market Exposure to Solidify As A Robust Player In Industrial Distribution Landscape!
- Reliance Steel & Aluminum Co.’s recent earnings report provides a complex picture of its financial performance and strategic initiatives during 2024.
- Positively, the company reported resilience in a tough market, achieving strong financial results through strategic decisions and acquisitions.
- The company’s non-GAAP earnings per share for 2024 were $15.92, demonstrating benefits from targeted growth strategies, diverse market penetration, and strict pricing discipline.
MEC Co., Ltd (4971 JP): Research Update
- MEC’s (4971 JP) reported FY24 (Dec year-end) results, producing OP of ¥4,562mil (+83.0% YoY) on sales of ¥18,234mil (+30.1% YoY).
- FY24 Chemical segment sales rose +27.0% YoY to ¥17,478mil, thanks to 1) a steady increase in demand for chemicals used in high-end packages, and 2) a gradual recovery in demand associated with PCs, smartphones, and general servers.
- MEC is guiding for FY25 1H OP of ¥2,250mil (-4.8% YoY) on sales of ¥9,600mil (+8.1% YoY), and full-year OP of ¥5,000mil (+9.6% YoY) on sales of ¥20,000mil (+9.7% YoY).
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