Daily Brief Energy/Materials: Korea Zinc, Dragon Energy, SGX Rubber Future TSR20, Crude Oil, Condor Energies and more

• On the 13th September, MBK joined Young Poong (000670 KS) in seeking control of Korea Zinc (010130 KS) via Partial Tender Offers for KZ and Young Poong Precision (036560 KS).
• This situation has been canvassed by analysts here at Smartkarma; with increasing expectation the Choi family makes a counterbid.
• This insight analyses the fair value of YPP. No matter how you slice it, the Offer Price is punchy. Perhaps not punchier enough.

• In this insight, we discuss in detail MBK’s four major concerns on the management of Korea Zinc. 
• We believe that MBK has legitimate concerns on especially the three factors including poor investments, deteriorating profitability, and increase in equity capital/disposal of treasury shares. 
• If and when the 2 trillion won+ is raised, then it could lead to another tender offer and the four concerns highlighted in this insight become much more important.

• Lotus released a scope and study for the Little Cane project in Botswana
• The project hosts a low grade resource with 71% inferred
• The study includes three scenarios for production and focuses on reducing the need for drill and blast operations, potentially using drag lines for waste removal.

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• US ADD measure expected to be in force from Sept 27
• Bombarded by Chinese exports Canada too join ADD league
• Tesla exports from China faces ADD in Canada, EU excuses

• For the week ending 13/Sep, US crude inventories dropped by 1.6m barrels, surpassing the expected 0.2m barrel decline. Gasoline stockpiles grew less than forecasted, while distillate inventories rose more.
• US natural gas inventories rise 58 Bcf for the week ending 13/Sep, more than analyst expectations of a 53 Bcf buildup. Inventories are 8.6% above the 5-year seasonal average.
• Chevron, Occidental Petroleum, and Exxon Mobil see target price cuts. DBS Bank initiated a Buy rating on Schlumberger and Halliburton.

• Condor has received a second natural gas allocation to feed the second modular LNG plant near the Kuryk Port on the Caspian Sea.
• The natural gas allocation will allow the company to produce the energy equivalent of 565,000 litres of diesel per day (~400 t/d of LNG).
• This is line with the company’s targets and is a key milestone in derisking the Kuryk plant.